Analysis of Global Power Market

Analysis of China's Power Operation Market Key Power Price Drivers • The power price in China is influenced by government policies, the cost of power generations and the dynamics of market supply and demand. Power Price Policies Key Power Price Drivers Currently, the power market in China is in the transitional period from restricted market to open market. The government policies will have great impacts on the power price. The government usually influences the power price through subsidy or tax policies. For example, the policy released by the NDRC in 2018 reduces the added-value tax of the power industry in order to reduce the general industrial and commercial power price. Cost of Power Generation The cost of power is the main basis for the government to stipulate the power price. There are several factors that can affect the cost of power generation, such as the variation in fuel prices. Additionally, the development of technology will also influence the cost of power generation, especially for solar and wind power. Relationship between Supply and Demand The relationship between power supply and demand will gradually have increasing impacts on the power price with the promotion of power price marketisation. FROST Source: Frost & Sullivan SULLIVAN 53

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