The Empirical Research On Regulation Effect Of China's Generation Price

Electricity is the most widely used and most consumption secondary energy sources and is indispensable in social production and life. The basic characteristics of China electricity production is the coal-fierd power plant always occupy dominating position. Both installed capacity and power generation is stable over 75%, which is difficult to change in the short time. In 2002, Major adjustment in Chinese power system was made, five power groups and two power grid companies formed and practised "power plants separated from electric network, competing electric price" policy. Since 2003, market-oriented of coal price have prompted China's thermal coal rise sharply, which made the conflict between "Marketing coal" and "Planning electricity" seriously and the cost of power increased dramatically. In spite of carrying out "Mechanism of Coal-Electricity Price Linkage" and increasing generation price continuously, but the generation price is unable to keep with the cost of price and the dilemma of thermal power loose industry enterprises is not change. At last, thermal power have to limit the generating capacity and lead to power shortage across the country. On the back ground of macroeconomic promptly, the current inflation pressure is great. How to regulate generation price so as to alleviate the power shortage and avoid PPI or CPI a substantial increase is a question that each side concerned. It ia urgent to proceed empirical analyses for the regulation effection of generation price.This paper gathers and organizes a nationwide generation price, relevant data of thermal power industry and PPI, CPI which can represent general price level, with the econometrical method, analyzing the conduction mechanism that the generation price fluctuation influence CPI, PPI, production and profit of thermal power industry. Because the data material is limiting, there are some errors in the empirical results. However, these errors could not change the basic conclusion of this paper.The composition and main content of this paper follow as: Chapter 1 is introduction. It introduces the background of selecting this title, present condition of domestic and international research, innovation and inadequacy of the thesis briefly.Chapter 2 reviews the reform of electricity regulation system in China, including general situation of electricity industry, the reform history of electricity system and regulation history of generation price.Chapter 3 forecasts the trend of thermal power demand in the 12th Five Year Plan which bases on ARIMA modle. The results of the study show that the thermal power demand and industry is still in rapid growth and on the rising stage that would aggravate the conflict between "Marketing coal" and "Planning electricity".Chapter 4 researches the influences that generation price fluctuation affects on CPI, PPI by the methods of impulse response and variance decomposition bases on VAR model. The results of the study show that the influence which generation price affects on PPI and CPI is small and not aggravating inflation. The function duration of generation price on PPI and CPI are 6 months and 3 months. The influence on PPI is bigger than the influences on CPI. The price conduction mechanism mainly from genertion price to PPI and to CPI, both reverse conduction and the conduction from PPI to CPI are unblocked, but the conduction from CPI to PPI can not be ignored.Chapter 5 researches the influences that generation price affects on production and profit of thermal power industry bases on co-integration and error correction model. The researches in production of thermal power industry show that generation price causes the greatest influence in a lot of influencing factors. Every 1%increase in quarterly generation price translates into 13.42 point increase in thermal power industry production. Another way of saying it is, every 1 cent/kwh increase in quarterly generation price translates into 241,600 million kilowatt-hours increase in production. Every 1% decrease in coal consumption of power supply which represents technical advance translates into 0.767 point increase in thermal power industry production. Every 1% decrease in main business cost translates into 0.53 point fall in production. The total asset has tiny negative influence on production. The researches in profit of thermal power industry show that generation price is the most important influencing factors. Every 1 cent/kwh increase in quarterly generation price translates into 1,820 million increases in profit of thermal power industry in long term. Every 100 million kilowatt-hours increase in quarterly production of thermal power industry translates into 15.5 million profits. Every 100 million increase in quarterly main business cost translates into 30.22 million falls in profit. The total asset has tiny negative influence on profit. The fluctuation of thermal power industry profit is great in thre short term, but the deviation of sustainability and extent from the long-term equilibrium is very tiny.At last, Chapter 6 suggests policy advices by analyzing the empirical results from earlier chapters.For example, adjusting in generation price appropriatly, optimizing the price mechanism between coal and electricity and speeding up the establishment of coal-electricity energy group.