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Faculty of Economics

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Li, T., Gao, C., Pollitt, M., Chen, T., Ming H.

Measuring the effects of power system reform in Jiangsu province, China from the perspective of Social Cost Benefit Analysis


Abstract: The paper uses a social cost benefit analysis (SCBA) approach to measure the effects of the power system reform starting from 2015 in Jiangsu province, China. We review the background of Jiangsu power system and summarize the implemented policies since the publication of “Document #9”. Then we pick the average industrial and commercial retail price and analyse the sources of price reductions. We show that the nominal industrial and commercial price fell by 21.3% between January 2012 and May 2021. We then analyse the likely overall welfare change facing industrial and commercial customers using SCBA and conclude that there is a permanent gain equivalent to 9.1% lower prices per year mainly because of the reform. This figure is a significantly more positive consumer gain than that calculated in previous SCBAs of electricity reform in other countries.

Keywords: Power system reform (PSR), social cost benefit analysis (SCBA), electricity market, industrial and commercial electricity price

JEL Codes: L94

Author links: Michael Pollitt  


EPRG Paper Link: 2213

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