Assessing the Effects of Market Power on Electricity Reliability in China: Toward a Green and Reliable Market

The transition to a low-carbon power system is among the measures to forge green energy transition and carbon neutrality, where grid firms have a crucial role. In this context, this paper uses the provincial data from 2004 to 2017 to evaluate the impact of market power of grid companies on service quality in China. Panel dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) models are employed. The findings indicate that higher market power has indeed reduced reliability measured by average outage duration. Renewable energy integration also has negative effects and reduces electricity reliability. Finally, the effects are also heterogeneous across the different regions. The results may also provide useful lessons for other developing countries aiming to improve the electricity supply chain.

Energy Efficiency and Electricity Reliability

Overloaded electrical systems are a major source of unreliable power. Using a randomized saturation design, we estimate the impact of compact fluorescent lamps (CFLs) on electricity reliability and household electricity consumption in the Kyrgyz Republic. Greater saturation of CFLs within a transformer leads to fewer outages, a technological externality benefitting all households, regardless of individual adoption. Spillovers in CFL adoption further reduce electricity consumption, contributing to increased reliability within a transformer. CFLs' impacts on household electricity consumption vary according to the effects on reliability. Receiving CFLs significantly reduces electricity consumption, but increased reliability permits greater consumption of electricity services.