Abstract
China is making a green refurbishment of its economy. Keystones in China’s greening process include: a structural shift to high-end manufacturing, services and research and development, a transition to renewable energy technologies, and a large-scale retrofitting of its conventional energy sector. Perhaps nowhere is this conservation and transition effort greater than in the electricity sector. China has introduced a number of command and control, as well as market-based policy instruments, to clean up its conventional energy supply. This chapter reviews and analyses the effectiveness of some of the policies introduced in recent years, drawing on recent empirical literature using plant-level data. It also identifies a number of challenges and opportunities in the sector for the foreseeable future.
Dr. Chunbo Ma, Assistant Professor, School of Agricultural and Resource Economics, Centre for Environmental Economics and Policy, University of Western Australia; Email: chunbo.ma@uwa.edu.au.
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Notes
- 1.
According to the new program, the following categories of thermal units are targeted for closure: (1) units below 50 MW; (2) units below 100 MW that have been operating for over 20 years; (3) units below 200 MW that have reached the end of their design lives; and (4) units with coal consumption 10 % higher than the provincial average or 15 % higher than the national average.
- 2.
These small units are generally inefficient and also highly polluting. The average total cost per kilowatt hour for small plants is almost three times the cost for large plants. Most of these units were state-owned and built to serve localities that had in the past experienced severe electricity shortages (Cao et al. 2009).
- 3.
There are several reasons why a plant may have a capacity utilisation factor lower than 100 %: (1) a unit may be out of service or operating at reduced output for part of the time due to equipment failures or regular maintenance; (2) output is curtailed because the electricity is not needed (e.g. lower demand); and (3) generators choose to reduce output or even shut down because the price of electricity is too low to make generation economical.
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Acknowledgments
This project received financial support from the Australian Research Council (ARC Discovery Grant) and the Research Collaboration Award at the University of Western Australia. I thank session attendants of the 23rd Annual Conference of the Association of Chinese Economics Studies Australia (2011), the 35th Annual Conference of the International Association for Energy Economics (2012), the Theo Murphy Frontier of Sciences Conference at the Australian Academy of Sciences (2012), and the Energy Studies Institute Conference at the National University of Singapore (2013) for many valuable comments. All remaining errors are mine.
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Appendix: Data Sources
Appendix: Data Sources
The main dataset in this chapter—in addition to Ma (2012), Zhao/Ma (2013), and Ma/Zhao (2015)—is from the Chinese regulatory authority that collects the most authoritative statistical data on China’s electricity generation. The dataset has information on generation, consumption of various fuels, load factors, captive use, transmission losses, ownership, vintage, etc. for all existing hydro, thermal and renewable power plants that has a combined capacity over 6,000 kW.
There are thousands of power plants in the original dataset; however, for the purpose of this study, we focused on thermal power plants which include coal-, oil- and gas-fired plants, and left out hydro plants. In addition, we restricted the analysis to thermal power plants with a minimum combined capacity of over 100,000 kW in any year of the study period since matching unit information from other sources for smaller plants is much more difficult. Figure 3.9 presents the total number of power plants and the proportion of combined sample capacity to China’s overall thermal capacity in each year. As is shown in Fig. 3.9, even this restricted final sample still includes the majority thermal generation capacity in China’s electricity sector. As such, the results of the analyses using this data can be viewed as representative of the whole sector.
Sample coverage. The smaller number of power plants and lower capacity coverage in 1998 and 1999 are due to missing information on a number of key variables for a large number of power plants. Source Ma/Zhao (2015)
Although the dataset does provide information for each generation unit in some years, in most cases it only reports aggregated plant-level data. Information on the nameplate capacity, commissioning date, and decommissioning date of each individual unit, commissioning date of each piece of FGD equipment and the total number of generation units are collected from a number of other government documents released by the Ministry of Environmental Protection and National Development and Reform Commission—in particular, A List of Running Desulfurization Facilities on Coal-fired Units (MEP 2011, 2012) and A List of Closed Small Thermal Units (NDRC 1999–2010, various issues). The dataset is further supplemented with information collected from the websites of individual power plants especially in cases where a unit is not equipped with an FGD facility.
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Ma, C. (2016). Efficiency in China’s Power Sector: Evidence from a Large Dataset of Power Plants. In: Su, B., Thomson, E. (eds) China's Energy Efficiency and Conservation. SpringerBriefs in Environment, Security, Development and Peace, vol 30. Springer, Singapore. https://doi.org/10.1007/978-981-10-0737-8_3
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