Chinese power-grid financial capacity based on transmission and distribution tariff policy: A system dynamics approach. (October 2019)

• Record Type: Journal Article
• Authors: Wang, Yongli; Zhang, Fuli; Zhang, Yuanyuan; Wang, Xiaohai; Fan, Lisha; Song, Fuhao; Ma, Yuze; Wang, Shuo
• Is Part Of: Utilities policy. Volume 60(2019)
• Publication Date: 2019-10
• Subjects: Transmission and distribution tariff reform -- Power-grid companies -- Financial capacity -- System dynamics; Public utilities -- United States -- Periodicals; Public utilities -- Government policy -- United States -- Periodicals; 363.6
• DOI: 10.1016/j.jup.2019.100941
• Languages: English
• ISSNs: 0957-1787

Abstract

Abstract: With reforms, the Chinese power grid is transitioning to a more dynamic and competitive power market. Transmission and distribution tariff policies have changed the profit model and influence the financial capacity of the Chinese power-grid companies. This study analyzes the specific content of the reform, the calculation related to each component of power-grid financial capacity, and the interaction and feedback characteristics among the components. On this foundation, we establish a financial capacity model using the system dynamics theory. Taking a power-grid company as a case to undertake empirical and sensitivity analyses, we put forward management strategies and policy recommendations. Highlights: Discuss policy implications with an explicit concern on investment capacity issue. Define the interaction and feedback characteristics between the components of investment capacity. Establish a system dynamics calculation model of power grid investment capacity. The investment capacity of power grid companies will keep growing in the future.