China’s power supply chain sustainability: an analysis of performance and technology gap

Abstract

The power industry is a major source of carbon emissions in China and it is vital, therefore, to address the industry to promote carbon emission reduction. This study takes the power supply chain (PSC) in China, composed of coal-fired thermal power plants and downstream power grid enterprises as its primary research object. From the perspective of sustainable development, the study explores and analyzes the sustainable performance and technology heterogeneity of China’s provinces’ PSCs, proposing the two-system model to evaluate the sustainable performance, generation performance and sale performance of PSCs. In addition, to understand the technology level of PSC, this study applies the meta-frontier technique to analyze the technology heterogeneity of all PSCs across different regions. The proposed models are then applied to analyze the sustainable performance of China’s provincial PSCs. The empirical results demonstrate the market-oriented reform of the power industry in China played a role in promoting the development of power generation enterprises in China’s PSCs but had a limited effect on the power grid enterprises in the PSC. The study also shows that there are significant regional differences in the sustainable performance and technology of China’s PSC. Generally, PSCs in Eastern China have a high level of sustainable performance and technology, while the sustainable performance and technology of the PSCs in Central and Northeast China are relatively poor. Based on these empirical results, specific policy recommendations are presented to improve PSC’s sustainable performance and technology levels at government and enterprise levels.