Integrated Coal Feasibility Study Based On Stackelgerg Game Model

The coal industry and electric power industry are two vital industries of China. Because China's energy resources is characterized by more coal and less oil and gas. Nearly 80% of China's power enterprises are relying on coal. And about 60% of China's coal production is used to generate electricity. So the relationship of coal companies and power companies is close. But in recent years, the contradiction between China's coal companies and power companies have become increasingly prominent. The dispute focused on the price of coal,which has seriously affected the development of national economy, social stability and people's daily lives.The contradictions between coal companies and power enterprises is due to the management system of basic industry has abuse. That is the price of electricity is govern ment-controlled, but the price of coal is market-decided. Since 2002, coal prices have achieved a market-oriented. Since then,the price of coal have rised rapid,but the price of electricity have rosed slowly. That because the price of electricity is controlled by the state. So many power plants were forced to stop production because the cost of growing too fast.In order to ease the contradictions between the coal companies and the powers, the government have increased the price of electricity slightly. However, as China's economic and institutional reasons, the slight increase in price of electricity does not help the powers. Almost all of the coal-fired power companies are facing a loss in 2008.Integration of coal and electricity refers to coal enterprises and powers have collaborated with joint operation. For the coal companies and electric power enterprises, integration helping the enterprises to extend the industrial chain, reducing business risk and cost, improving the overall efficiency of energy systems. Meanwhile integration of coal and electricity is conducive to manage ecological environment comprehensively, thereby contributing the sustainable development of economic.This paper analyzes conflict between the coal and power sectors of China's,and propose solution,that is integration of coal and electricity. In this paper,author introduces the Stackelberg game model to compare integrated companies with non-integrated companies. The author concludes the earnings advantage in integrated companies through the theoretical analysis. And the introduction of a comprehensive example shows comprehensive advantageadvantages of an integrated enterprise,which verify the feasibility and rationality of integration of coal and electricity.Figure [14] table [12] reference [65]...