Market reform of Yunnan electricity in southwestern China: Practice, challenges and implications. (October 2019)

• Record Type: Journal Article
• Authors: Liu, Shuangquan; Yang, Qiang; Cai, Huaxiang; Yan, Minghui; Zhang, Maolin; Wu, Dianning; Xie, Mengfei
• Is Part Of: Renewable & sustainable energy reviews. Volume 113(2019)
• Publication Date: 2019-10
• Subjects: Electricity market -- Reform -- Renewable energy -- Hydropower -- Yunnan; CSG China Southern Power Grid -- WEET West-East Electricity Transfer -- YNPG Yunnan Power Grid -- RES renewable energy source -- km kilometer -- km2 square kilometers -- TWh terawatt hours -- GWh gigawatt hours -- MWh megawatt hours -- GW gigawatt -- MW megawatt -- kV kilovolt -- SOE state-owned enterprise -- MEP Ministry of Electricity Power -- SPC State Power Company -- SETC State Economic and Trade Commission -- YPEPB Yunnan Provincial Electric Power Bureau -- SGCC State Grid Corporation of China -- SERC State Electricity Regulatory Commission -- NDRC National Development and Reform Commission -- FYP Five-Year Plan -- VCG Vickrey-Clarke-Groves -- LMP locational marginal pricing -- DAT day-ahead transaction -- RMB the official currency of the People's Republic of China -- CfD contract for difference -- PAB pay-as-bid -- GDP gross domestic product -- LTCPR long-term coal power reserve -- RMR reliability-must-run -- CO2 carbon dioxide; Renewable energy sources -- Periodicals; Power resources -- Periodicals; Énergies renouvelables -- Périodiques; Ressources énergétiques -- Périodiques; 333.794
• DOI: 10.1016/j.rser.2019.109265
• Languages: English
• ISSNs: 1364-0321

Abstract

Abstract: This paper reviews the electricity market reforms improving resource allocation and renewable energy integration in Yunnan. Given the predominance of hydropower and the importance of energy exports in Yunnan, the province presents a challenging case study of electricity market reforms. The experience of and lessons from Yunnan provide a reference for other provinces in China engaged in the growing adoption of renewable energy. The main contributions of this paper lie in the extension of the existing understanding of electricity reforms in Yunnan and China. Based on extensive data previously unreported in the literature, this paper shows how the Yunnan electricity market functions in practice and indicates where the practice is deficient in terms of the theory of how electricity markets should function. Finally, this paper suggests how market reforms should be adopted toward a scientifically designed electricity market. Highlights: Over 30 billion RMB of benefits have been produced by Yunnan's electricity market reforms. Provincial trading increased fourfold in five years based on a mid/long-term market supplemented by day-ahead trading. Interprovincial trading has been promoted via market mechanisms with a model of " plan + market ". Challenges and policy implications of further reforms are discussed.