Market Power and Electricity Market Reform in Northeast China

The Northeast region of China has been used as a testing ground for the creation of a functioning wholesale electric power market. We describe the profile of generation assets throughout the region and the ownership of plants. We calculate the 4-firm Concentration Ratio (CR4) and the Hirschman-Herfindahl Index (HHI). The current ownership structure exhibits modest concentration. We also describe the ownership structure of those plants participating in the trial operation of the Northeast China Regional Electricity Market. Ownership of this subset of plants is much more concentrated. Arguably, this is a troublesome obstacle to instituting some form of competitive bidding in the wholesale power market, and this may be one factor in the poor outcome of the trial operation