Assessing the impact of regulatory reforms on China's electricity generation industry

In the past two decades, China has experienced a series of regulatory reforms in its electricity industry, aimed at improving power production efficiency. The central planning system was broken up and the market-oriented modern enterprise system was established. Furthermore, the former vertically in...

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Bibliographic Details
Published in:Energy policy 2009-02, Vol.37 (2), p.712-720
Main Authors: Du, Limin, Mao, Jie, Shi, Jinchuan
Format: Article
Language:English
Subjects:
Applied sciences
China
China (People's Republic)
Differences-in-Differences
Econometrics
Economic data
Efficiency
Efficiency, Administrative
Electric energy
Electric power
Electricity
Electricity generation
Electricity restructuring
Electricity restructuring Production efficiency Differences-in-Differences
Energy
Energy economics
Energy industry
Energy policy
Exact sciences and technology
Fuel
General, economic and professional studies
Government regulation of business
Impact analysis
Power generation
Production efficiency
Productivity
Reform
Regulatory policy
Regulatory reform
Studies
Vertical integration
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Summary:In the past two decades, China has experienced a series of regulatory reforms in its electricity industry, aimed at improving power production efficiency. The central planning system was broken up and the market-oriented modern enterprise system was established. Furthermore, the former vertically integrated electricity utilities were divested and the generation sector was separated from the transmission and distribution networks. In this paper, we intend to estimate the impact of regulatory reforms on production efficiency of fossil-fired generation plants using the plant-level national survey data collected in 1995 and 2004. Applying the econometric method of Differences-in-Differences, we estimate the effects of these reforms on the demand for inputs of employees, fuel and nonfuel materials. The results show that the net efficiency improvement in labor input associated with the regulatory reforms is roughly 29% and the gains in nonfuel materials are about 35%, while there is no evidence of efficiency gains in fuel input associated with the electricity reforms.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2008.09.083