Study on electric policy modeling based on CGE

Abstract

PurposeThe purpose of this paper is to establish a model to analyze the impacts of economic policy on the demand for electricity in China, including the impacts of fiscal and monetary policies.Design/methodology/approachWith the development of electric reform, the impacts of economic policy on demand for electricity will be more and more obvious. It is difficult to analyze the impacts by a conventional model. CGE model is based on the theory of general equilibrium which is put forward by Walras, it describes the supplying and demanding relationship between the sectors of the economic system, a CGE model can recognize that an exogenous change (in policy or from other source) that affects any one part of the economy can produce repercussions throughout the system, it can also analyze the impacts of economic policy on electric power sector.FindingsA CGE model and a social accounting matrix are established.Research limitations/implicationsAccessibility and availability of data are the main limitations which model will be applied.Practical implicationsA very useful model to study the impacts of economic policy on electric power sector.Originality/valueThe new method to analyze the impacts of economic policy on electric power sector in China. The paper aims at policy makers and the researchers who deal with electric power demand and supply.