A Research On Markerization Of Electric Industry In China

Form an electric market and introduce competition mechanism, price mechanism, supply and demand mechanism, and risk avoid mechanism into it are indispensable for the development of electric market in China. Break the monopoly, provide better service for society and lower the price become a driving force for marketizing the power industry. The focus on electric reform has been shifted from depending on policy support to seeking resources in market and digging up potential inside the industry.According to traditional economic theories, electric power, energy and various public utilities are all considered to be governed by public policies, not by market economy. The long monopolized operation and public ownership render the electric power industry of China to have become low in operating efficiency and little in social benefit.The marketization reform of Chinese electric power industry resulted from four changes: the change of economy system, power supply and demand trend, structure of power industry, and of the ownership structure. Years of probing also pushed the marketization already into the copying stage.Based on investigation about the present situation of Chinese electric power industry, the Paper made an analysis about three potential risks lay behind the marketization reform: the risk of power shortness, the risk of power price, and the risk of big accident. Counter measures are given for each risk .The essence of power marketization is to promote the economic benefits of the whole industry by developing a competing market and create a selective operating environment. Two factors must be carefully considered when selecting the operating models: one is the scale economy after restructuring, the other is the choice of operating models for transmission and distribution net works. Different areas and different periods should be given different consideration. The operating models of the electric power market can be divided into four models: the monopoly model, the selling model, the wholesale competing model, and the retail competing model. The Paper mainly analyzed the selling model and the wholesale competing model.An important step of the marketization is the separating of power generation plants from networks. Power generation plants compete each other for their products to be bought by networks. As a result, cost will be lowered, and profit will be increased. Presently the electric market of China is still in an initial stage. Therefore the reform should be starting from establishing on-net price system and selling price system.The relative legal system is also needed for a healthy power market. The marketization not only is loosening of government control, but also involves restructuring of the controlling system. The controlling methods should be legalized and scientific.The marketization of power industry also requires the government to regulate policy decision procedures. Approval system should be replaced by bid system for power projects. The reform of investment system and fund raise system in power industry should be fastened.The building of electric power industry is a complicate systematic work. Theoretic and technical research should be strengthened in the light of characteristics of Chinese market economy and specific conditions in the electric power industry.