Analysis of the Current Development Status of China's Electric Power Industry Preface The year 1998 may have important historical significance in the development process of my country's electric power industry.

This year, the electric power industry finally got rid of the constraints of the past planned economy model from the mechanism, and was transformed from a government department into an independent economic entity, the State Electric Power Company.

After its rebirth, the State Electric Power Company is still a giant in my country's electric power industry, accounting for 60% of the total domestic installed capacity and 77% of the total domestic electricity sales (in 1997, the Corporation's installed capacity was 153GW, electricity sales were 766.9TWh, and electricity purchases were 466.2TWh).

Whether they like it or not, the State Power Corporation will truly face the market and must re-examine its future development strategy from the perspective of the market.

Also in this year, under the concept that most experts had asserted that electricity should be the first to develop greatly, electricity oversupply appeared for the first time in decades, a phenomenon that had not been seen in decades.

In fact, the per capita electricity consumption in our country is too low, and the per capita installed capacity (0.2KW) is less than one-fifth of the world average, which is extremely disproportionate to the current level of economic development in our country (see Table 1).

Far from their true place in the world.

my country's power elasticity coefficient has been less than 1 (average 0.88) in the past two decades, while the world's major rapidly developing countries are much greater than 1, with an average of 1.22, and the average of developed countries is also 1.15.

This phenomenon of relatively slow development of electric power, which has led to the current oversupply of electric power, contains an ironic contradiction. The focus of the contradiction is reflected in the electricity price issue in recent years.

The current electricity price situation and the current weak electricity demand are the result of the accumulation of contradictions, not the cause.

Therefore, this article attempts to stand from the standpoint of economics, and at the same time from the standpoint of power users, that is, consumers, using the perspective of economic analysis to scan and show the development process of my country's power industry, and at the same time reveal some of the problems that arise during the development process. Issues that deserve adequate attention.

Certain concepts of government decision-making departments regarding the power industry are also worth exploring.

Over the years, the relationship between electricity demand and price has not been correctly handled according to the laws of market economy. It is believed that electricity is a necessity in economic life, and its demand is related to economic development and has little to do with its price.

In the language of economics, this understanding means that the price elasticity of electricity is very small. In layman's terms, it means that all walks of life use so much electricity anyway, so it doesn't matter if we spend more money on it.

Based on the above understanding, various electricity price funds, financing policies and various local extra-price markup behaviors have been deduced.

If we explore the changes in power demand in recent years from a market perspective and from a price perspective, we may be able to discover some deeper reasons.

This article believes that the above concepts can be said to be correct in the planned economy period (product demand does not depend on the market), but in a market economy environment (demand comes from the market), if we still make decisions according to the above understanding, our power industry will sooner or later be

The invisible hand of the market economy cuts and dismembers.

It can be seen that the decision-making concept of market economy is crucial to the healthy development of the electric power industry.

1.1 Historical Review my country’s electric power industry has developed rapidly during the forty-nine years of construction and has made great contributions to the development of the national economy.

Annual power generation increased from 4.31 billion KWh in 1949 to 1,134.2 billion KWh in 1997, an increase of 263 times, with an average annual growth rate of 12.3%.

Correspondingly, the installed capacity increased from 1.85 million KW in 1949 to 254.24 million KW in 1997, an increase of 137.4 times, with an average annual growth rate of 10.8%.

The detailed development history of the electric power industry is shown in Appendix Tables 1 and 2 and Figures 1 and 2.

The electric power industry has experienced several representative development periods.

The first is the period of rapid development from 1951 to 1960. During this period, the average annual growth rate of installed capacity was 20.3%, the average annual growth rate of power generation was 28.8%, and the average annual growth rate of GDP during the same period was 8.5%.

In other words, the development of the electric power industry during this period was significantly faster than the development of the national economy. The corresponding elastic coefficient of power generation was 3.4 and the elastic coefficient of installed capacity was 2.4.

Another period of rapid development was from 1970 to 1979. During this decade, the average annual growth rate of installed capacity was 12%, the average annual growth rate of power generation was 11.5%, and the average annual growth rate of GDP during the same period was 10.6%.

The corresponding elasticity coefficient of power generation is 1.08 and the elasticity coefficient of installed capacity is 1.13, which means that the power industry is growing slightly faster than the national economy.

Since the 1980s, although the power industry has developed relatively steadily, it has been relatively fast. In the past 17 years, the average annual growth rate of power generation has been 8.5%, and the average annual growth rate of installed capacity has also been 8.5%.

However, the national economy developed much faster than the electric power industry during the same period.

The average annual growth rate of GDP during this period was 10.5%, and the corresponding elasticity coefficient of power generation and installed capacity was 0.81.

Especially after 1990, the power generation elasticity coefficient has been declining, from 0.98 in 1991 to 0.58 in 1997. The power generation elasticity in 1998 is estimated to reach the lowest point since the reform and opening up, around 0.28.

If this trend is not stopped in time, it will once again endanger the healthy development of the national economy.

1.2 Composition of power generation links Proportion of hydrothermal and thermal power Compared with now, my country’s power industry started almost from scratch in the early days of liberation.

After two periods of rapid development in the 1950s and 1970s, my country's power industry has begun to take shape.