Research On Price Deregulation Of China Power Industry: Example Of Direct Power Purchase

With the global economic integration, It is so important to speed up electricity market-oriented reform because more and more developed and developing countries have experience of the reform. Electricity price reform is the core of electricity market-oriented reform and before the reform government has adopted price regulation policies for many years which has been played an important role is economy development. However, the power industry development needs a competitive market to help pricing the electricity price. Western developed countries have undergone a vertically integrated operation to segmentation operation and a total regulatory system to a deregulation system with part of regulation and part of introduction of competition. in recent years widespread deregulation of power industry method used to analyze and discuss the Government's electricity price cap regulation and deregulation and it is becoming a theory basic of electricity reform. The starting time of reform of China is relatively late and the State Power Corporation was established until 1998.Then in 2002, power industry split to five large power generation groups and two major power companies which is the beginning of electricity market-oriented reforms.Based on the price regulation and deregulation theory, the article compared the process of electricity reform between China and foreign countries. Moreover, the latest reform which we called direct power purchase for large users has been also analyzed by the ways of theory and practice. In the process of writing, I used many Theoretical tools such as the industrial organization theory, economics of regulation, microeconomics, the profit function model and other theory and mathematical research tools. With these tools, I have researched the price regulation and deregulation of electricity reform and gave some promotion suggestion of direct power purchase for large users.