A CGE analysis for quantitative evaluation of electricity market changes

Hwang, Won‐Sik; Lee, Jeong‐Dong

doi:10.1016/j.enpol.2015.04.006

Cited by 19 publications

(12 citation statements)

References 24 publications

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“…We assumed that the goods and services would be directly input to the power generation, transmission, and electricity retail sectors. In contrast, previous studies such as Hosoe (2006) and Hwang-Lee (2015) assumed that the inputs to the electric power industry are provided only to the electricity generation sector. The outputs of the electricity generation sector are then sent to the electricity transmission sector, and finally the outputs of the electricity transmission sector are forwarded to the electricity retail sector.…”

Section: Comparison Of the Inverse Matrix Coefficientsmentioning

confidence: 97%

“…The previous studies defined the sectoral data by simplifying each sector in the electric power industry. Hosoe (2006), Akkemik and Oguz (2011), and Hwang and Lee (2015) assumed that the inputs which should have been input to the electric power industry are thrown only into the electricity generation sector, and the outputs of the electricity generation sector are sent to the electricity transmission sector (Figure 1).…”

Section: Studies About the Effects Of The Liberalizationmentioning

confidence: 99%

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Estimating Sector-Specific Data of the Electric Power Industry to Analyze the Effect of the Liberalization: The Case of Japan

Wakashiro

2020

Preprint

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Input-output tables are employed to analyze the liberalization of electricity industries around the world. However, the input-output tables do not have sectoral data of the electricity industry in many countries. Electricity industries that consist of an electricity generation, transmission, and retail (and/or distribution) sector have experienced the different degrees of liberalization; the generation and retail sector have experienced liberalization in many countries or regions, while the transmission sector has not faced liberalization. In this study, we estimate the sectoral data of the electricity industry in an input-output table by using annual reports of the electric power companies and also defined the relationship among the sectors. Finally, we find that the data which are analyzed by previous methods can distort policy decisions and that especially the definition of the sectors' intersection in the industry is critical.Category & Number: 5. Industrial Organization and Structural PolicyJEL Classification: C32, C33, Q41, Q48

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Section: Comparison Of the Inverse Matrix Coefficientsmentioning

confidence: 97%

Section: Studies About the Effects Of The Liberalizationmentioning

confidence: 99%

Estimating Sector-Specific Data of the Electric Power Industry to Analyze the Effect of the Liberalization: The Case of Japan

Wakashiro

2020

Preprint

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“…Rodrigues and Linares [18,19] used a CGE model to assess the impacts of a Demand Response program in the Spanish electricity market. Hwang and Lee [20] looked into the shifts within the Korean electricity market by using a CGE model. Farajzadeh and Bakhshoodeh [21] analysed economic and environmental consequences of the phasing out of energy subsidies in Iran by employing a CGE model.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model

et al. 2019

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China’s electricity industry has been undergoing a process of regulatory reform. This study aims to analyse the impact of liberalization on the electricity market assuming different degrees of scope of the reforms by applying a computable general equilibrium (CGE) model. In this paper, we consider the three sub-sectors of the electricity industry, namely generation, transmission and distribution. We assume that the reform will phase out the entry barriers on the generation side and allow for competition on the distribution side, while keeping the transmission side under regulation. The results showed that the reform could enhance efficiency in the electricity sector and reduce energy prices for households. Introduction of a complete competition model would decrease welfare by 5.394 billion yuan, if contrasted to a limited competition model. The composite energy price would decline under both scenarios, whereas the quantity of energy consumed by the households would go up. This research, thus, contributes to literature on the economic effects of China’s electric power market reform, and can be used as a case study to support policy decisions for the decision-makers.

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“…For the previous studies, some researchers focus on the relationship between electricity supply and economics based on the CGE model [23][24][25][26][27], and many scholars, such as [28][29][30][31][32], assessed the impacts from the electricity demand side. Moreover, the impact of the increase of electricity price is of great significance, and many studies have focused on this problem in China and abroad [33][34][35][36][37]. In addition, the core of energy reform is to straighten out energy prices and form a proper and transparent pricing mechanism.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic Impacts of Power Shortage

Huang

Yao

2016

Sustainability

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Abstract:The electricity industry is a basic industry of the national economy. It has experienced several large-scale power shortages, hard power shortage and soft power shortage, which have brought a great threat to China's sustainable economic development. To solve this problem better, it is necessary to make a quantitative assessment of the economic impacts of power shortage. The CGE model is commonly used for simulating economic shocks and policy effects. It describes supply, demand and equilibrium in different markets by simulating the economic mechanism through a set of equations. Once changed, the exogenous variables will affect a certain part of the system and then the whole system, leading to changes in quantities and prices. The equilibrium state will also change from one to another. A static CGE model is built in this paper, and the Social Accounting Matrix (SAM) of eight sectors of China in 2007 is compiled, in order to simulate the economic impacts of hard power shortage and soft power shortage. Simulation results show that the negative effects of power shortage on economic development are very significant, and the effects vary in different sectors. Especially, under the background of hard power shortage, the industrial sector suffers most. The economic cost of power shortage is considerable, and the main reason for it is the specific administrative pricing system in China. The low electricity price in the long term will lead to insufficient construction and hard power shortage; moreover, that in the short run would result in soft power shortage. In order to solve the problem of power shortage completely, power system reform is inevitable.

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A CGE analysis for quantitative evaluation of electricity market changes

Cited by 19 publications

References 24 publications

Estimating Sector-Specific Data of the Electric Power Industry to Analyze the Effect of the Liberalization: The Case of Japan

Estimating Sector-Specific Data of the Electric Power Industry to Analyze the Effect of the Liberalization: The Case of Japan

Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model

Economic Impacts of Power Shortage

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