Research On Re-evaluation Of POWER ENTERPRISES In Power System Reform Based On FCFF By Guangdong Electric Power

On 15 th March 2015,the Chinese state council has issued a document titled as "The Suggestions on further deepening the reform of electric power system"(CPC2015 No.9), in this document the deployment and requirements of the future power system reform are put forward and This indicates a new round of reform towards the electric power system is about to begin.the most noticeable part about this document is the reform concerning to the electricity selling mechanism, which suggests that the previously monopoly controlled electricity-selling business by the State Grid and China Southern Power should open their business to other qualified electricity-selling business entities, including the private capital.In 2015,China’s overall power consumption in 2015 to 5.55 trillion kilowatt hours(kWh),this means that even if the cost is 1 fen(RMB) per kilowatt-hour, the electricity sale market could still be the enormous scale of 55.5 billion. Moreover,Energy and power generation enterprises in the business of selling electricity has natural advantages about cost and technical support.Therefore, for power generation enterprises, especially those fully integrated energy enterprise with sales net work branches, its enterprise value will inevitably changes as the new business development. Hence,it is necessary to re-evaluate the value of power generation enterprises.This article will utilize multiple research methods including literature synthesis,the qualitative, quantitative analysis, and case analysis, etc., more specifically, the free cash flow discount method is chosen to re-valuate enterprises’ value under the circumstances of policy changes. In order to provides evaluation framework and practical reference for evaluation of the sell electricity industry, this article also presents details about the selection of evaluation parameters and the analysis process.