Research on Transformation of Integrated Energy Service in Electric Power Enterprises

Abstract

In March 2015, China launched a new round of reforms of the country’s electric power systems. An important part of these reforms was the construction of a power market with multiple customers as well as sellers, allowing customers (power consumption companies) to trade directly, proactively and selectively with power generation companies rather than involving the grid. The introduction of documents supporting these electrical reforms affected the interests of power grid companies on the sales side of the power market. As a result, the task of transforming China’s power grid companies has become both urgent and necessary. In order to adapt to the new environment of the power market, the State Grid Corporation of China and the China Southern Power Grid have separately proposed that power companies transform into integrated energy service companies. However, during this process of transformation, power grid companies have faced not only challenges resulting from the transformation of the original profit model, but also the need to compete with new power sales companies in the power market. This article addresses the challenges faced by power companies (such as the State Grid Corporation of China) in China’s environment of power system reform, analyzing critical aspects of the transformation of power companies in terms of partner behavior and customer behavior, based on value net theory. A profit model of power companies under integrated energy services is established using long tail theory, based on customer consumption. Economic analysis and sample-based research reveal that power enterprises’ competitiveness and economic benefits can improve by utilizing long tail theory to transform their integrated energy services.