China's Electric Power System Reform, Tariff Economics Analysis

With the development of power industry, power supply and demand condition has transferred from last shortage to current basic balance, even surplus. For so many abuses in power industry, power system reform has been an inexorable trend. This paper briefly introduces the current condition of power system reform, and points out that reasonable electricity price is core in the reform, and expounds the current condition, up-raising problems, reform principle of sales price to network. Combined with economic theory, analysis and discussion are conducted for sales price to network from the following different aspects. The factors effecting electricity price are analyzed in the aspects of power market structure, cost, competition, market demand and government control; The relationship among price bidding principle, power procurement cost and market fairness is proposed through static & dynamic game-theory analysis of competitive generation sets bidding; The rationality of two-part pricing method is analyzed, and two-part pricing method of sales price to network is introduced; It is suggested to restrict and control project cost after the discussion on relation between project cost & sales price to network; This paper also analyzes the rationality, feasibility and benefit of implementing long-term agreement electric rate for large electricity consumers; Preceded with the reason why Ertan Hydropower Station landing in predicament, the utilization of power industry environment resources is described in the light of resources allocation optimization; It is suggested to optimize reasonably environment resources and realize sustained development by adopting price lever. The possible risks, such as power shortage, electricity price risk, large power disasters are indicated in this paper, and corresponding prevention measures are put forward as well. The reform of sales price to network shall be based on inter-regional interconnection, and conducted at the same time with that of transmission & distribution charge, sales price to consumers. Sound and reasonable pricing principle shall be established to promote the sustained, healthy and fast power industry development by further perfecting price system of sales price to network, gradually forming reasonable sales price to network in power generation market.