Impact analysis of China's coal-electricity price linkage mechanism: Results from a game model

The mechanism of coal-electricity price linkage is a key issue in electricity and coal market reform in China. In this paper we study the impact of the coal-electricity price linkage mechanism on the profit margin of the Chinese power generation company GENCO based on a game model. The results indicate that implementing a coal-electricity price linkage mechanism can reduce the decrease in GENCO's profit margin, and the decrease in GENCO's profit margin mounts up in line with increase in GENCO's market share. We obtain game equilibrium under the two strategies of with and without price linkage and analyze the results using a numerical example.