Research On Vitical Relationship Of Coal And Electicity Industrial Chain Of China

As coal industry and electric utility industry are the basic energy industry of ournational economy,the greatly fluctuation of both the price and supply of their productwill exert an influence on the relevant downstream industry and people’s living,alsohave a negative impact on the healthy development of the national economy.With theunsynchronized process of market reform of coal industry and electricity industryimplemented by the government,and the demand promoted by the high-increasedeconomy because of the entry to WTO,the contradictions between the two closelylinked industries has become more and more sharply.Since from2002,there are coalshortage and electricity shortage in some areas even in the whole country for severalyears.In other words,the vertical relationship between coal industry and electricityindustry is in tension.Because of the energy consumption structure and limit ofelectricity generation technology of our country,our power generation will relies onthe coal in a long run of the future.Beside,as the highly demand of electricity createdby Modern society,the serious coal-electric confliction will be unable to meet thehigh-level consumption of power,and do damage to the healthy development of oureconomy and the normal living of Chinese.As a result,the government has to take several variety measures to solve thisproblem,such as the negotiation meeting of the supply and transportation of coal,theprice co-adjust mechanism of coal and electricity, and encourage the coal and electricpower enterprises to cooperate to alleviate this contradiction.Meanwhile,in recentyears the Integration of coal and electricity industry has become the mainstream intheir vertical cooperation at the same industrial chain. So,it became a hot topic ofthe academic community who focus on that to research the deep-rooted reasons ofcoal and electricity confliction and the best vertical relationship of coal and electricityindustrial chain.Inorder to further seek the reason of confliction between coal and electricity anda proper way to solve it,this paper on the basic of previous studies,firstly use thevertical relationship based on trade theory,government regulation theory,game theoryand Case analysis,to specific and thoroughly research the operating of coal andelectricity markets which are under-controlled by the industry policy and the changeof the confliction between coal and electricity industry,made an conclusion that coal and electricity enterprises in vertical should cooperate with each other. Secondly thispaper build a model on the background of government regulation of the coal andelectricity,compared vertical integration with vertical specialization of coal andelectricity industry and analysis their respective economic utility,thus putting anemphasis on the vertical integration of coal and electricity enterprises as regard as themost efficient or proper way to ease the tension or alleviate the confliction betweencoal and electricity industry.In the end, it gives some possible sugesstions and lookforward to the future of the coal and electricity industrial chain,and hope this papercan provides some values to other similar industrial chains.