Abstract
This paper reviews the introduction, implementation, and adjustment of benchmark on-grid power tariffs in China as well as discusses the impact from the on-going power market reforms. The analysis was made with the price data and policy documents from the NDRC and regional regulators. This paper concludes with a summary of features and drivers of historical changes in benchmark on-grid power tariffs and the values and contributions of this dominant price-setting mechanism of electric power in the last 15 years.
Highlights
Electricity power is a specialized industry product, but the difference with all other products is that electricity cannot be freely stored, which means electricity is produced in real-time, consumed in real-time, and dynamically balanced
The main task of electricity prices is to cover the cost of building, finance, maintaining, and operating power plants and the electricity grid
The regulated prices were calculated based mainly on fuel price, finance cost, and operation-period of power plants or the levelized life cycle cost of energy. These regulated price mechanisms promoted the investment in power infrastructure so that the generation capacity could meet the rapidly increasing electricity demand that came with China’s fast economic growth
Summary
Electricity power is a specialized industry product, but the difference with all other products is that electricity cannot be freely stored, which means electricity is produced in real-time, consumed in real-time, and dynamically balanced. The regulated prices were calculated based mainly on fuel price, finance cost, and operation-period of power plants or the levelized life cycle cost of energy These regulated price mechanisms promoted the investment in power infrastructure so that the generation capacity could meet the rapidly increasing electricity demand that came with China’s fast economic growth. From the on-grid power prices, a new tariff-setting policy was implemented in 2004, which introduced the benchmark on-grid power tariffs This tariff was born of operation-period tariff and based on regional or provincial average generation costs. It is the fundamental of the current electricity price system and the core financing indicator of power portfolio investment [5]. This paper aims to review the price development and the policy change of benchmark on-grid power tariffs from 2005 to 2020 of different generation technologies based on onehand data from the National Energy Administration
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
