A Study On Core Variables For Sustainable And Balanced Development Of Power Generation Enterprises In China

Studied in this thesis are the two variables influencing sustainable and balanceddevelopment of power generation enterprises in China, namely scale of enterprisesand price control of the government i.e. since 2003 when electric power systemreform was carried out in China, whether or not the enterprises have achieved scaleeffectiveness in the process of market-oriented operation with rapid expansion of thescale of power generation enterprises, whether or not the expected goals have beenachieved in respect of relaxation of electricity price control and experiment of pricecompetition, and the effect of scale of enterprises and control of electricity price onsustainable and balanced development of power generation enterprises.In terms of study on scale efficiency, analyses of overall efficiency, technicalefficiency, scale efficiency and input/output situation of 34 thermal power generationcompanies in Shanghai and Shenzhen from 2003 to 2010 by means of the DEAmodel show the following: In the sample period, technical efficiency of powergeneration enterprises increase while scale efficiency of them decreases, whichindicates that operating capability and technological capacity of the enterprises havebeen enhanced and the system reform has promoted to a certain extent technologicaladvances and management innovation of them. From the view point of measurementresult, however, the overall efficiency of enterprises as a whole is on the low side,which indicates that the overall scale efficiency is quite low and serious diseconomyof scale exists. The immanent cause of such diseconomy of scale is mainlyoverexpansion of the industry scale.In terms of analysis of input and output, all the 34 sampled companies have theirinput of fixed assets and operating cost under a great redundancy and the problem ofoverscale is relatively obvious. Overscale of input leads to low operational efficiencyof power generation enterprises in China, with ever increasing loss and excessivelyhigh rate of debts. This has to a great extent affected sustainable and balanced development of power generation industry. It is a practical question for powergeneration enterprises in China to have to face with to control reasonably the industryscale.In terms of analysis of price control, the law of transmission of electricity pricefluctuation in the economic sphere is analyzed by means of the product pricing theory,the electric power product price control model and the information asymmetry theoryand the dynamical correlativity between electricity price index and PPI as well as CPIis examined in depth. In respect of practice, two cases of practice of electricity pricecontrol are analyzed based on the author's experience, namely the experiment of pricecompetition in the Northeast China's electric power market in 2005 and centralizedcontrol of electricity price of the Central Tibet Electric Grid in 2009. The resultshows that since the beginning of electricity price reform, the goals of"Establishmentof mechanism of moderate electricity price competition and achievement ofinterlocking between the selling electricity price and on-grid price"and reduction ofterminal selling price have not been achieved by relaxation of electricity price controldue to the restriction of the institutional environment and market environment. In thecurrent electric power market environment, there are too few competition subjectsand the power generation market is basically in the state of oligopoly without anycondition for sufficient competition. No effective competition is possible in such amarket condition. In addition, the defect in design of the competition pattern leads tounfair competition. Therefore, it is inadvisable to let go electricity price control and astrict control policy must be implemented as the conditions for market competitionare not fully available, the supervision mechanism is unsound and information isasymmetric。In respect of the price formation mechanism, the generating cost has beenincreasing with the coal price since 2004. The pressure of increasing cost cannot bereleased through interlocking between coal and electricity because the mechanism ofinterlocking between the on-grid price and the selling price has not be fullyestablished. As a result, imperfection of the price formation mechanism is the policycause for power generation enterprises to suffer general reduction of operatingefficiency and loss.