Does the electricity marketization resulting from China’s power sector reforms reduce wind curtailment?

Abstract

The rapid growth of wind power is accompanied by a high wind curtailment rate, resulting in substantial economic and environmental losses. With China’s power sector reform in 2015, provincial-level electricity market construction and development have been accelerated. This study uses the provincial marketization index as a proxy variable for electricity marketization, examining 31 provinces in China from 2009 to 2021 to focus on the impact of electricity market development on wind curtailment rates. The results show that the development of electricity markets post-2015 has significantly reduced wind power curtailment rates. Further analysis reveals that the marketization effect has gradually strengthened since 2017. Heterogeneity analysis shows that electricity marketization has a more pronounced effect on reducing wind power curtailment rates in the “Three North” regions. This study provides a new perspective on the role of electricity marketization in addressing the issue of wind power curtailment.