Abstract
The transition to a low-carbon power system is among the measures to forge green energy transition and carbon neutrality, where grid firms have a crucial role. In this context, this paper uses the provincial data from 2004 to 2017 to evaluate the impact of market power of grid companies on service quality in China. Panel dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) models are employed. The findings indicate that higher market power has indeed reduced reliability measured by average outage duration. Renewable energy integration also has negative effects and reduces electricity reliability. Finally, the effects are also heterogeneous across the different regions. The results may also provide useful lessons for other developing countries aiming to improve the electricity supply chain.
Highlights
China’s electricity sector, the largest in the world, accounts for about 45% of energy-related CO2 emissions and the transition to a low-carbon power system is becoming common sense (Abhyankar et al, 2020)
This paper aims to investigate whether market power of grid companies has an effect on service quality
The findings indicate that the results from fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) are robust
Summary
China’s electricity sector, the largest in the world, accounts for about 45% of energy-related CO2 emissions and the transition to a low-carbon power system is becoming common sense (Abhyankar et al, 2020). China promised to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060, which put forward higher requirements for greening electricity supply chain and especially for grid firms. The grid system is an important link that transmits carbon prices from the production side to the consumption side. In this regard, deepening electricity reform and regulations on grid firms are among the measures to forge green energy transition and carbon neutrality. In the unbundling reform implemented in 2002, the State Power Corporation was broken down into many companies, including two grid firms to break the monopoly. The most important request for transmission and distribution sector includes that the business operation and revenue income mode will be changed and they are supposed to shoulder the responsibility of demand side management in the future (Zeng et al, 2016)
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