How Much Would China Gain from Power Sector Reforms? An Analysis Using Times and CGE Models

22 Pages Posted: 6 Aug 2019

See all articles by Govinda R. Timilsina

Govinda R. Timilsina

World Bank - Development Research Group (DECRG)

Jun Pang

Renmin University of China - School of Business

Xi Yang

China University of Petroleum, Beijng

Date Written: June 21, 2019

Abstract

Many countries have undertaken market-oriented reforms of the power sector over the past four decades. However, the literature has not investigated whether the reforms have contributed to economic development. This study aims to assess the potential macroeconomic impacts of an element of the power sector reform process that China started in 2015. It uses an energy sector TIMES model and a computable general equilibrium model. The study finds that the price of electricity in China would be around 20 percent lower than the country is likely to experience in 2020, if the country follows the market principle to operate the power system. The reduction in the price of electricity would spill over throughout the economy, resulting in an increase in gross domestic product of more than 1 percent in 2020. It would also increase household income, economic welfare, and international trade.

Keywords: Energy Policies & Economics, Energy Demand, Energy and Mining, Energy and Environment, Transport Services, Power & Energy Conversion, Energy Sector Regulation

Suggested Citation

Timilsina, Govinda R. and Pang, Jun and Yang, Xi, How Much Would China Gain from Power Sector Reforms? An Analysis Using Times and CGE Models (June 21, 2019). World Bank Policy Research Working Paper No. 8908. Available at SSRN: https://ssrn.com/abstract=3430519

Govinda R. Timilsina (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
MSN3-311
Washington, DC 20433
United States

Jun Pang

Renmin University of China - School of Business ( email )

Beijing, 100872
China

Xi Yang

China University of Petroleum, Beijng ( email )

18 Fuxue Road
Beijing, 102249
China

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