Dynamic Energy Pricing Mechanism Based On System Dynamics

Energy is the necessary material basis for the existence and development of human beings. China is currently in the accelerated industrialization and urbanization period and is one of the world’s fastest growing economies. In 2011, China clearly stated the request of "reasonable control of total energy consumption". National Energy Board is currently proposed the country’s total energy consumption control target of 4.1 billion tee in 2015, and they have formed total control target decomposition programs and evaluation programs. Therefore, the need for in-depth research on energy policy, energy pricing mechanism and the organic connection between energy and economic growth is very necessary.This paper’s research on China’s energy system is mainly concentrated in four major energy sectors which are coal, oil, gas and electric power. As for China’s actual conditions, oil and coal in China have basically realized marketization pricing mechanism, while the pricing mechanisms of electric power and natural gas are still in the stage of government regulation. Therefore, this paper is mainly based on system dynamics model to research the future pricing mechanism of China’s electricity and natural gas. For coal and oil, this paper made a brief analysis of the factors affecting the prices of coal and oil, made in-depth analysis of the problems between the existing market pricing mechanisms, and then designed the dynamic mechanism of coal, oil in the future. For natural gas, this paper analyzed the domestic and overseas natural gas pricing situation, and carried out four kinds of natural gas pricing models based on system dynamics. This paper analyzed their applicability and finally designed the development paths of natural gas pricing mechanism in the upstream section, the midstream section and the downstream section, which has certain reference for the reform of China’s natural gas pricing mechanisms. Based on system dynamics, this paper designed four sub-systems and presented six possible price mechanisms. Based on the situation in A city under six kinds of scenarios, the price level, total social surplus and energy saving situation simulation are simulated. Finally, this paper forecasts the development path of electricity pricing mechanism in China. Moreover, it provides references for developing countries to improve their electricity pricing systems.In short, in the paper China’s energy price dynamics system in the future are researched and optimized, strategic objectives and reforms are proposed for the future optimization of energy price development, which has some practical value.