Market Power and Electricity Market Reform in Northeast China

MIT Center for Energy and Environmental Policy Research Working Paper No. 08-001

27 Pages Posted: 13 Jun 2008 Last revised: 14 Nov 2008

See all articles by Xiaochun Zhang

Xiaochun Zhang

North China Electric Power University

John E. Parsons

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: June 1, 2008

Abstract

The Northeast region of China has been used as a testing ground for the creation of a functioning wholesale electric power market. We describe the profile of generation assets throughout the region and the ownership of plants. We calculate the 4-firm Concentration Ratio (CR4) and the Hirschman-Herfindahl Index (HHI). The current ownership structure exhibits modest concentration. We also describe the ownership structure of those plants participating in the trial operation of the Northeast China Regional Electricity Market. Ownership of this subset of plants is much more concentrated. Arguably, this is a troublesome obstacle to instituting some form of competitive bidding in the wholesale power market, and this may be one factor in the poor outcome of the trial operation.

Keywords: Electricity, China, competition, reform

JEL Classification: L94, L13

Suggested Citation

Zhang, Xiaochun and Parsons, John E., Market Power and Electricity Market Reform in Northeast China (June 1, 2008). MIT Center for Energy and Environmental Policy Research Working Paper No. 08-001 , Available at SSRN: https://ssrn.com/abstract=1144111 or http://dx.doi.org/10.2139/ssrn.1144111

Xiaochun Zhang (Contact Author)

North China Electric Power University ( email )

School of Business Administration,NCEPU
No. 2 Beinong Road, Changqing District
Beijing, Beijing 102206
China

John E. Parsons

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

HOME PAGE: http://www.mit.edu/~jparsons/

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