How does coal-electricity price linkage impact on the profit of enterprises in China? Evidence from a Stackelberg game model

摘要

Highlights?The twice coal-electricity price linkage(CEL) mechanisms in China are described.?A dynamic non-cooperation game model on CEL policy is developed.?The equilibrium profit of coal mining firms will decrease if coal prices rise.?The CEPL-2012 policy is better suited for preventing the potential risk of “electricity shortage”.AbstractTo mitigate the serious conflicts between market-driven coal prices and state-administered electricity prices in China, two kinds of mechanism of coal-electricity price linkage (CEPL) policies were proposed by the Chinese government in 2004 and 2012, known as CEPL-2004 and CEPL-2012 respectively. The present study proposes a Stackelberg game model to investigate the profit changes of two CEPL mechanisms caused by different production strategies of coal mining enterprises and coal-fired power plants when coal prices rise. The findings show that CEPL policy is cond