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Resources, Conservation and Recycling

journal homepage: www.elsevier.com/locate/resconrec

Full length article

Unifying the “dual-track” pricing mechanism for coal in China: Policy

description, influences, and suggestions for government and
generation enterprises
Yongqi Yang a,∗ , Ming Zeng a , Song Xue b , Jinyu Wang a , Yuanfei Li a
a
School of Economics and Management, North China Electric Power University, Beijing 102206, China
b
State Grid Energy Research Institute, Beijing 102206, China

a r t i c l e i n f o a b s t r a c t

Article history: The coal supply in China has been abundant in recent years, while the coal inventory of large generation
Received 7 October 2015 enterprises has been sufficient. Therefore, overcapacity has occurred in China’s coal industry, and the
Received in revised form 3 April 2016 coal price has been relatively low, compared to the coal price during 2008–2012. At the same time, many
Accepted 6 April 2016
coal transportation railways will begin operation to improve transportation capacity, and these measures
Available online xxx
will be able to guarantee the stability of coal prices. Under such circumstances, the Central Government
has published the Guidance on Deepening the Reform of the Coal Market and has unified the dual-track
Keywords:
pricing system for coal. The development of the coal industry and power industry is a key energy factor
Unification of the “dual-track”
Coal pricing system
that affects the development of the national economy; therefore, this policy has far-reaching implications
Electricity market for the steady supply of coal and the reliable production of electricity. However, due to the non-market-
Coal market oriented power industry management mechanism, this policy could have some negative influences on
Generation enterprises the power sector and coal sector, especially for the generation enterprises that will be exposed to risks of
upper stream coal price shocks. Therefore, this paper focuses on analyzing the negative influences caused
by the unification, and it introduces related measures for the government and for generation enterprises.
First, this paper introduces the features and development of a dual-track coal pricing mechanism, which
originated in 1985, and subsequently analyses the conditions for implementing the unification for the
dual-track coal pricing mechanism. Second, from the information in related government documents, we
analyze the negative influences on the coal and power industry caused by the unification accordingly.
Finally, recommendations and measures for the government and generation enterprises are offered.
© 2016 Elsevier B.V. All rights reserved.

1. Introduction
Since 1985, the coal market has progressively opened, and the
supply and demand sides of the coal sold for electricity (coal sold
for electricity, or CE, indicating the coal sold to generation enter-
prises to generate electricity) have conducted transactions under
the supervision of the government based on a different pricing
mechanism, which is different from the normal market. The gener-
ation enterprises have two means to buy coal. On the one hand, the
coal price is set according to the contracts signed by the coal enter-
prises and generation enterprises, namely the “special contracts”
of CE, for which the price is controlled by the government, and the
generation enterprises are allowed to purchase a certain amount of
∗ Corresponding author.
E-mail address: yangyongqincepu@163.com (Y. Yang).
coal at less than the market price. The coal purchased in this manner
is referred to as “planned coal” (because of the feature of its pricing
mechanism being similar to the planned economy). On the other
hand, when CE special contracts are not able to meet the demand of
generation enterprises, they must buy the additional CE at the mar-
ket price (Shen et al., 2012); this type of coal is referred to as “market
coal”. There are significant differences between planned coal and
market coal in terms of their supply, transportation capacity and
price. All of these factors have limited the effects of the market
mechanism, resulting in unfair competition. However, over the his-
tory of the “dual-track pricing system”, there have always been
disputes over CE contracts, and these contracts are not conducive
to the stable supplying of coal. Because the dual-track pricing sys-
tem has become increasingly unsuited to the requirements of the
economic development of the coal market and the future electric-
ity market, related reform is imperative under such circumstances
(Du et al., 2013; He et al, 2012).

http://dx.doi.org/10.1016/j.resconrec.2016.04.004
0921-3449/© 2016 Elsevier B.V. All rights reserved.

Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
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the twelfth Five-Year Plan

Part III:
Transformation and upgrading, enhancing the competitiveness
of industrial sector

National Strategic plan for energy development

Policies This strategic plan has decided the general strategy for
energy sector for China

Guidance on Deepening the Reform of the

Coal Market

Key Development planning for logistics in

Coal industry coal industry
policies
Measures on resource tax collection for
coal

Interim measures for the administration of

the quality of commercial coal

Relative policies on deepening the reform

of power industry (No.9 Document)

Key
Power industry Energy saving reforming for thermal
policies power generation plants

Relative Policies on forming the price

mechanism for trans-provincial electricity
market

Helps to rationalize the Helps to rationalize the

pricing mechanism regulation mechanism
for coal and power industry for coal and power industry

Fig. 1. The logic linkages for the reform policies of coal and power industry.
(Source: Author’s own elaboration)

During “the Twelfth Five-Year Plan”, due to the continuous
reduction in the growth of GDP (from 9.3% in 2011–7.2% in 2015),
the Central Government decided to stimulate economic vitality in
various industries. Regarding the energy sector, which continued
to operate under the planned economy during the “twelfth Five-
Year Plan”, marketization reform has become the key solution in
allowing the price to play the decisive role in the optimized allo-
cation of resources (Li et al., 2015; Gu et al., 2016). Regarding the
coal sector, which is an upstream industry of the power industry
and many other key industries, its marketization has become the
basis for other industries. During 2015, which was the end of the
“twelfth Five-Year Plan”, the Central Government published sev-
eral documents regarding reform in the energy sector, and some of
these reforms were parallel to the reform of the coal industry, while
some were more detailed policies (Burke and Liao, 2015). Hence, we
present a figure to show their linkages by listing important policies
regarding coal industry and its downstream industries (Fig. 1).
In this situation, the National Development and Reform Com-
mission (NDRC) formulated a proposal to unify the dual-track
pricing system for coal, indicating that the special contracts for CE
would be eliminated and only the normal market would remain.
The Central Government published a document entitled The Guid-
ance on Deepening the Reform of the Coal Market (hereafter referred
to as The Guidance) in 2013. This government document ended
the dual-track pricing system for coal that lasted for nearly three
decades.
The Guidance is of great significance. As the data show, the
installed capacity of coal-fired power generation accounted for
nearly 80% of the total installed capacity in China, whereas coal
and fuel costs accounted for 70%-80% or more of the on-grid price
of generation plants. At the same time, generation enterprises in
China rely heavily on coal-fired generation. However, the market-
oriented reform of the power industry has only recently begun.
Therefore, unification might have some negative influence on the
power sector and coal sector, especially for generation enterprises
because they are completely exposed to the risks of upstream coal
price shocks. Therefore, this paper first analyses the external con-
ditions of the unification of the dual-track coal pricing mechanism
and then analyzes its possible negative influences on power sector
and generation enterprises. Finally, related solutions and recom-
mendations are proposed. The logic linkages of this article are
shown in Fig. 2.
2. The conditions for the unification of the dual-track coal
pricing mechanism
The unification of the dual-track coal pricing mechanism was
undertaken in 2012; however, the special contracts for CE were
not fully cancelled. Some provincial governments still allow gen-
eration enterprises to negotiate with coal enterprises to decide the
coal price at less than the market price. In this section, we first
present the basic idea of dual-track coal pricing mechanism and
then analyze in Section 2.2 whether it is the right decision to cancel
the dual-track coal pricing mechanism.
2.1. Introduction to the dual-track coal pricing mechanism
The dual-track coal pricing mechanism originated in 1985, and
it refers to the different pricing mechanisms of the supply and
demand sides of coal after the gradual liberalization of coal prices.
On the one hand, the CE price was set according to contracts signed
by the coal enterprises and generation enterprises, in which the

Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
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The conditions for the unification of the

dual-track coal pricing mechanism
Coal production and price
Transportation capacity

Policy Description

Negative influences Suggestions for government

The promotion of electricity market

The imbalance between the
For coal The improvement of the control over the CE market
and power
marketization of coal and electricity
from the government
sector Increasing pressure on railway
transportation Optimized coordination between government
departments

Measures for generation enterprises

The risks of upper stream coal price The vertical integration strategy of generation
chocks enterprises
For The impacts on business operation The reduction of the operation costs
generation and investment of generation Fuel costs control
enterprises enterprises Strict control on the financial risk of generation
Risks brought by the over dependence enterprises
on coal-fired generation Optimization of the generation source structure in
generation enterprises

Fig. 2. The logical linkages of article.

(Source: author’s own elaboration)

generation enterprises were allowed to purchase a certain amount
of coal at less than the market price. These contracts were under
the supervision of the government. On the other hand, the genera-
tion enterprises were required to purchase CE at the market price
when the CE in special contracts was not able to meet the demand.
During the annual national coal conference, contracts were com-
pleted between power generation enterprises and state-owned
coal enterprises; the coal involved in these contracts was referred
to as “planned coal” or “CE in special contracts (zhong dian dian
mei he tong)” (Ngan, 2010). Related railway transportation plans
were attached to the special contracts. The coal purchased from
the market was referred to as “market coal”. Since 1990, over an
extended period of time, the price of CE in special contracts was
less than the market price of coal. If the various intermediate trans-
action costs were considered, the price gap between CE in special
contracts and CE in the market was as much as 100 yuan per ton.
The only exception was in 1999–2000, when the coal market was
extremely depressed.
The reason for establishing this mechanism was to ensure the
basic business operation of generation enterprises under their
social responsibilities. Power enterprises (including generation
enterprises and grid enterprises) have the duty to ensure the social
welfare. In China, the electricity price for residents is much lower
than that for industrial users (cross-subsidization), so the price of
part of CE must be maintained at a low level so that the generation
enterprises can produce power at a low coal cost and sell energy to
residents at a low price. This mechanism shows the features of the
coal and power industries as utilities.
2.2. The conditions for the unification of the dual-track coal
pricing mechanism
Since the “Eleventh Five-Year Plan”, there has been continued
rapid growth in China’s coal production. However, due to differ-
ences in coal reserves among regions, the rate of growth and the
development potential of different coal producing areas have been
quite distinct (Yang et al., 2014). The overall trend has shown rapid
westward movement. For nearly a decade, the new coal producing
areas of Shanxi, Shaanxi, Inner Mongolia and Ningxia have com-
prised approximately 50–60% of the total national coal production.
According to data collected by the NDRC, under the current pol-
icy in Shanxi Province, which is a coal-producing province (66%
of China’s coal reserves are located in Shaanxi, Shanxi and Inner
Mongolia), in addition to the direct costs of production, additional
expenditures are also required, which include resource fees, usage
charges for mineral resources, water resources compensation, etc.
All of these costs add up to nearly 100 yuan per ton, not including
the national tax, land tax and other related taxes. The logistics cost
accounted for 28% of the coal transportation cost in most parts of
Shanxi, indicating that transportation costs (logistics cost and other
transportation costs) were responsible for nearly 30% of the price
of coal. This proportion was much higher than the national aver-
age, which is 18%. Therefore, the primary consideration for coal
enterprises in Shanxi is how to transport the coal from Shanxi at a
relatively low price (NDRC, 2014a,b). It is also the primary consid-
eration of coal enterprises in Shaanxi and Inner Mongolia. Railway
transportation remains the first choice, but the capacity might not
be sufficient; however, road transportation has developed rapidly
in recent years with rising costs. For the coal end-user, the original
price of coal in Shanxi was 500 yuan per ton (equivalent to more
than 5000 kcal/kg); the transportation costs were 400 yuan per ton,
and the middlemen would add their income to the price (approxi-
mately 100 yuan), so the final price was approximately 1000 yuan
when the coal was transported to Shandong (an east coast province
in the developed area). Among these costs, the logistical costs, taxes
and various mark-ups accounted for more than 60% of the final
price.
From this point of view, the production capacity and transporta-
tion capacity of coal are the two main factors affecting the coal
price. The unification policy was initiated in 2012, however it was

Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
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Fig. 3. The coal production and growth rate from 2001 to 2014.
(Source: NBSC, 2014)

Fig. 4. Coal imports and the growth rate of China from 2001 to 2014.
(Source: NBSC, 2014)

Fig. 5. Coal exports and the growth rate of China from 2001 to 2014.
(Source: NBSC, 2014)

not fully popularized and implemented all over the country. Some
provinces are still operating under the former dual-track pricing
mechanism. The purpose of this section is to analyze the conditions
as well as results for the unification of the dual-track coal pricing
mechanism in terms of the coal supply and transportation capacity.
We can conclude from the analysis in Sections 2.2.1 and 2.2.2 that
unification of the dual-track coal pricing mechanism was not only
the correct decision in 2012, it has also brought some effects which
has proved this policy should be promoted throughout the country.
2.2.1. Coal production and price
According to coal production in China, the conditions of the coal
supply are suitable to cancel the dual-track coal pricing mechanism.
(1) Abundant coal production
According to the total national coal production, it is difficult
to predict its future development trends in coming years because
it is closely associated with government policies. However, the
coal production is sufficiently abundant to meet the demand. As

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Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
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illustrated in Fig. 3, the production of coal maintained a steady
increasing trend over the past decade. However, the growth rate
of China’s coal production decreased in 2006 and 2007 sharply and
remained at a relatively stable level during 2006–2009 (Zeng et al.,
2013). The government issued many policies to stimulate the econ-
omy, and coal production increased between 2010 and 2011. When
the effects of these policies were outdated, the growth rate of coal
production decreased again, while the coal inventories of several
large generation enterprises remained high. At the end of 2014, the
coal inventories of generation enterprises reached 85 million tons,
with an increase of 31.2 million tons. Among these inventories,
the large generation enterprises stored 81.13 million tons, repre-
senting a decrease of 0.52 million tons or 0.6%. The coal stored in
these large generation enterprises was able to maintain the nation-
wide power supply for more than 19 days without buying new coal.
Hence, in general, the coal supply in China is now experiencing a
stable development period (NBSC, 2014).
At the same time, China experienced a rapid increase in the
net imports of coal. As shown in Fig. 4, China’s coal importa-
tion increased from 2.7 million tons in 1988–291.4 million tons in
2011. With the exception of 2008, which was affected by the eco-
nomic crisis, there has been a trend of rapid growth in the import
of coal. The main reason for this growth is the growing domes-
tic demand for coal in recent years. Concurrently, more modern
port facilities have been introduced in China, and the increase in
the cargo-handling capacity of seaports has further promoted coal
imports. Fig. 5 illustrates the trends in coal export in China during
2011–2014. Coal exports have been decreasing steadily, while the
gap between the import and export volumes of coal has increased.
Therefore, concluded from Figs. 3–5, the coal supply kept grow-
ing before and after the unification, the coal market is developing
towards an oversupply situation. Hence the coal supply situation
has brought advantages to the unification before 2012. Besides, for
those provinces which are still operating under the dual-track coal
pricing mechanism, it’s about time to carry out the unification cause
the sufficient coal supply has lead to a favorable CE price trend
which will be discussed in (2).
(2) Trends in CE prices
Now we will analyze the trend of CE prices after 2014 to prove
that the conditions for the unification have become more mature
than 2012 and it should be implemented all over the country.
CE prices have experienced a descending tendency in recent
years. CE prices of all type (including 5000 kcal, 5500 kcal and
4500 kcal) in the whole country and in the main producing area
from January 2014 to August 2015 are shown in Figs. 6 and 7,
respectively. According to the data of the NBSC (short for National
Bureau of Statistics of China), the coal prices continued to decrease
at the beginning of 2012, and there was a continuous decrease in
the CE price during the first 8 months of 2015, when the price
decreased from 423.1 yuan per ton to 340.79 yuan per ton, rep-
resenting a decrease of 19.45% (NBSC, 2014). Although the CE price
listed in the special contracts is currently not available to the public,
conclusions can be drawn from the news and the annual reports of
listed generation enterprises that the market price of coal has been
approaching the CE price listed in the special contracts (Zeng et al.,
2014). In addition, during the second quarter of 2015, the market
coal price was low and fluctuated around the CE price in special
contracts. The price fluctuations have also become an important
reason to promote the unification of the dual-track coal pricing
mechanism.
As the gap between the market price of coal and the CE price in
the special contracts decreases, the operation costs of the genera-
tion enterprises also decrease. Thus, there might be an opportunity
for generation enterprises: on the one hand, their operational risks
Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
5
have decreased, and their profits have increased; on the other hand,
they can buy more coal during this period and increase their inven-
tories to manage possible coal price fluctuations in years to come
(Peng, 2011; Shealy and Dorian, 2010).
Although international oil and coal prices have decreased due to
the high production and transportation costs of coal, it is unlikely
that the market price of coal will decrease sharply. We believe
that the coal price should be maintained at a low level in the near
future. Therefore, according to the present economic situation, it
is the right decision to further promote unification throughout the
country.
2.2.2. Transportation capacity
According to the NBSC, the output of mined coal in China was
3.24 billion tons in 2012, of which Inner Mongolia, Shanxi and
Shaanxi accounted for 58.3% of the total production (Li, 2012). The
railway freight volume during 2001–2014 is shown in Fig. 8. As con-
cluded from Fig. 8, the transportation capacity of railway remained
high before the unification, hence another influencing factor is good
for the unification, which has proved that the unification is a cor-
rection decision before 2012.
As for those provinces which are still operating under the former
dual-track pricing mechanism, we will be analyzing the develop-
ment trend of transportation capacity after 2014 to show whether
it’s suitable to popularize this policy all over the country.
The amount of coal sent by railway reached 3.26 billion tons in
2014, constituting 48% of the total transportation volume (NBSC,
2014). Shanxi and Shaanxi, which are located in the northwest
region of China, transport coal to the eastern coastal ports by rail-
way, whereas Inner Mongolia relies on truck transportation. Coal
produced from Datong, Shanxi, is 200–300 yuan more expensive
than the coal from Inner Mongolia. With the help of the Daqing
Railway, coal from north Shanxi can be transported to the east
coast. However, the only method to transport the coal from Inner
Mongolia is truck transportation, which is inefficient. Therefore,
although the original price of coal in Inner Mongolia is low, its prof-
its cannot be compared with those of the coal from the Datong area.
For this reason, railway transportation will be the main transporta-
tion method considered for China’s coal transportation.
The main railways, which transport coal from west to east,
are the Daqin Railway and the Shuohuang Railway. In the near
future, the China Railway Corporation will undertake technological
updates of the two railways. When the upgrading is complete, the
capacity of Daqin and Shuohuang will be able to achieve an annual
growth rate of 10% in coal transportation capacity. As also shown
in Fig. 8, the railway transportation capacity remained at a rela-
tively high level during 2012–2014, and the growth rate remained
positive except for in 2014.
However, according to the annual report of the Datong Railway,
the technological updates are not sufficient because the current
growth rate of coal production exceeds the growth rate of China’s
coal transportation. In the future development plan for China’s rail-
ways, the transportation capacity of the main railways, such as
the Jitong and Daqin Railways, will be continuously enhanced. As
demonstrated in Fig. 9, the number of railway able to transport coal
will be increased. The China Railway Corporation has undertaken
efforts to construct western railways according to the demand for
coal transportation in China. At the same time, coal transportation
railways will be built in the eastern regions to increase the speed
of resource transfer and to improve the coal transportation capac-
ity of China’s railways. Additionally, transportation costs could be
reduced through these policies. In the near future, it is predicted
that China’s demand for coal transportation from west to east will
be met by the increased capacity of the existing railways and the
construction of new railways.
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Fig. 6. The market price of CE in China.

(Source: Author’s own elaboration through field investigation)

Fig. 7. The market price of CE in the main producing area of China.

(Source: Author’s own elaboration through field investigation)

Fig. 8. Railway freight volume during 2001–2014.

(Source: NRA, 2014)

At the same time, considerable progress has been achieved in
China’s port construction, with the port handling capacity of sev-
eral large ports (of which the port handling capacity exceeds one
hundred million) continuing to increase, as shown in Fig. 10. At the
same time, the amount of coal transported from the large ports in
China has increased yearly (NDRC, 2014a,b). The coal transporta-
tion capacity has been significantly increased in each of the large
ports, such as the Port of Qinhuangdao, Port of Tangshan, Port of
Tianjin, etc. Fig. 11 shows China’s large ports’ port handling capac-
ity for coal during 2001–2014. From 2010 to 2014, there was a
remarkable increase in the amount of coal transported through the
large ports in China except in February each year, due to the Lunar
New Year holiday.
Overall, with the acceleration of China’s railway and port con-
struction, the bottlenecks in coal transportation will gradually
abate. Therefore, the transportation capacity is sufficient after 2012,
which means another influencing factor is good for the unification.
Hence the unification should be carried out all over the country.
Conclusions can be drawn from the discussions above:

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Fig. 9. Map showing China’s planned coal transport railways.

(Source: NRA, 2014)

Fig. 10. Trends in China’s main ports’ port handling capacity.

(Source: NDRC, 2014a,b)

Fig. 11. China’s main ports’ port handling capacity for coal.
(Source: NDRC, 2014a,b)

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Fig. 12. The tariff chain for coal-fired power.
(Source: Author’s own elaboration)
1) Influencing factors are quite beneficial to the unification before
2012, hence it is worth noting that unification in 2013 is advis-
able.
2) The unification should be promoted throughout the country in
the coming years. From the beginning of 2014, the gap between
supply and demand of coal has reached a minimum, compared
with recent years. The price differences between market coal
and CE in special contracts has been significantly reduced. The CE
price in special contracts was even higher than the market coal
price in some regions. In addition, for these provincial govern-
ments, which still operate under the former pricing mechanism,
it is the right time to undertake unification.
3. Policy description
The official Web site of the Central Government has published
The Guidance, which cancelled the CE in special contracts and left
only market coal, on December 25, 2012 (The Central People’s
Government of the People’s Republic of China, 2012). Over the next
few years, the unification has affected the whole production pro-
cess of the coal industry and other industries, especially the power
industry. The policies of The Guidance is regulating the coal market
until now. In this section, we discuss the key policies and measures
of The Guidance.
(1) A new mechanism for coal production and transportation
Since unification, a new mechanism has been formulated. First,
the price of coal is decided by the market on both sides. The Guid-
ance encourages the signing of medium- and long-term contracts
between coal enterprises and generation enterprises. At the same
time, local governments should not interfere with the normal busi-
ness activities of the coal enterprises and generation enterprises at
all levels. The China National Coal Association (CNCA) examines the
signing and implementation of these contracts at the end of every
year.
In addition, the special contracts for CE and the dual-track
coal pricing mechanism were cancelled, and the National Devel-
opment and Reform Commission (NDRC) no longer publishes the
annual plan for the railway transportation capacity of coal. Related
contracts have been signed by coal enterprises and generation
enterprises since 2013 according to the market price of coal.
The transportation department organizes the transportation work
according to these contracts, and the contracts for coal transporta-
tion are kept on record by the NDRC and related government
departments (Qiang and Xi, 2012).
(2) The promotion of the coal market construction
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Since The Guidance was published, the construction of provin-
cial coal markets and the national coal market have been promoted
gradually to form a competitive and orderly coal market system
that is adapted to China’s socialist market economic system (Wang,
2012; Central People’s Government of the People’s Republic of
China, 2012). In general, the trading center of the whole market
system is the national coal trading center, which operates and coor-
dinates the operation of the corresponding provincial coal markets,
while the CNCA facilitates the relationships among all sides of the
market and formulates transaction rules that follow the guidance
of the NDRC (Xiaoli et al., 2012).
(3) The optimization of the Coal and Electricity Prices Comove (dian
mei jia ge lian dong ji zhi)
The Coal and Electricity Prices Comove (Hereafter referred to as
the Comove) has been undertaken as the transition method toward a
fully functional coal market. When the magnitude of CE price fluctu-
ations exceeds 5%, the on-grid price should be adjusted accordingly.
However, the gap between the CE price in the special contracts and
the market price of coal decreased after 2013; therefore, the on-grid
price has not been altered since the unification of the dual-track
coal pricing mechanism (The Central People’s Government of the
People’s Republic of China, 2012).
However, we still do not believe that generation enterprises are
now able to handle the fluctuations of coal prices well if the Comove
is the only means for relieving the negative influences of upstream
coal price shocks.
(4) Encouragement for CE transportation marketization
The China Railway Corporation and the Ministry of Transport
have strengthened their guidance of the administration of rail-
ways and shipping companies to build a healthy coal transportation
market. Priority is now given to medium- and long-term contracts
with large coal trading volumes. When the transportation capacity
is not sufficient to fulfill the transportation demand, some short-
term contracts or contracts with low coal trading volumes should
be cancelled or delayed. The government implements stronger
repercussions for false contracts and wasted or dishonored trans-
portation capacities that influence the allocation of resources. The
China Railway Corporation formulates the regulation of the railway
transportation management for CE, to build open and fair capacity
allocation mechanisms.
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Fig. 13. The proportion of coal-fired generation among China’s five largest generation enterprises.
(Source: Author’s own generation from data from annual financial statements)

Fig. 14. The electricity market structure and price chain after the No. 9 Document.
(Source: Author’s own elaboration)

4. Negative influences
As discussed in Section 2.2, it is the appropriate time to under-
take the unification of the dual-track coal pricing mechanism, and
it will allow price to play a vital role in coal the market, which will
facilitate the healthy development of the coal industry. However,
under the present reform conditions in China, unification might
have negative influences on the management of the coal sector and
power sector. The solutions to these negative influences provide
the key content of this article; therefore, we present these impacts
in the sections below and divide them into two categories: negative
influences on the coal and power sectors; and negative influences
on generation enterprises.
4.1. The negative influence on the coal and power sectors
(1) The imbalance between the marketization of coal and electric-
ity
As illustrated in Section 3 (1) because the unification of the
dual-track coal pricing mechanism, the new situation, in which the
market decides the coal price while the government controls the
on-grid price, has initially developed. Therefore, the price chain
between the coal sector and power sector has changed.
Fig. 12 demonstrates the price chain for coal-fired power gener-
ation before unification. To begin, the supply side of coal is divided
into two parts. On the one hand, the transactions proceed fol-
lowing the special contracts signed by the coal enterprises and
power enterprises; this is the so-called “planned coal”. On the other
hand, the price of coal is set by the market price, which is referred
to as “market coal”. However, the pricing mechanism in China’s
power industry still follows the planned economic system. The grid
enterprises buy electricity from generation enterprises at the on-
grid price and sell it to users at the electricity price. The on-grid
price, transmission and distribution price, as well as electricity
price, in China are decided by the NDRC, and they are relatively
fixed. Therefore, the price chain for coal-fired power lacks flexibil-
ity.
Since unification, the coal price has been mainly decided by the
market, and the electricity price is decided by the government,
which has led to an imbalance between the coal market and elec-
tricity market.
As is well-known, the price of coal is constantly changing at
a very fast pace. However, if the government wants to change the
price of electricity according to the fluctuation in coal prices, it usu-
ally undertakes complex administrative procedures, which require
much time. During the next few years after unification, administra-
tive orders to change the electricity price have been falling behind
the fluctuation in coal prices. The conflict between the marketi-
zation of CE and the management system of the power industry
has become increasingly prominent since unification. Therefore,
reform of the marketization of the electricity price mechanism is
of great urgency.
(2) Increasing pressure on railway transportation
As discussed in Section 2.2, the coal price is mainly decided
not only by the demand and supply of coal but also by the trans-
portation capacity. After the marketization of CE, the transportation
capacity could become an enormous problem for the power and
coal industries.
Over the past few years, the CE special contracts were mainly
controlled by the NDRC. However, the former Ministry of Rail-
ways actually controlled coal transportation. When the CE special

Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
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contracts were signed, the Ministry of Railways made specific CE
transportation plans to fulfill the transportation of CE. Since the
China Railway Corporation replaced the Ministry of Railways, their
subsidiary companies, which were attached to the former Ministry
of Railways, now supervise the transportation of CE.
After unification, the special contracts were cancelled, so related
CE transportation plans no longer exist. The China Railway Corpora-
tion must make transportation plans according to market contracts.
Although the railway transportation capacity will increase in com-
ing years, the market demand fluctuation in coal transportation is
difficult to predict.
In addition, similar to the pricing mechanism of electricity, the
transportation and construction plans were made through com-
plex administrative procedures. Any changes in these plans would
require too much time so it’s unable to reflect the market fluctua-
tion. Most importantly, China Railway Corporation is a non-profit
utility company. Most officials in this company, who are in charge
of making railway construction and transportation plans, do not
possess the knowledge of market economy.
Therefore, a private investor should be able to respond to the
price signals due to demand changes. However, because the state-
owned nature of the railway company, that prevents them from
adjusting their construction plans based on market signals. This
backward management mechanism of China’s railways might not
be able to guarantee the abundant capacity of coal transportation.
Once the increase in railway transportation cannot catch up to the
increase in the demand of coal transportation, it could lead to infla-
tion in coal prices.
4.2. The negative influence on generation enterprises
In the price chain of the coal sector and power sector, genera-
tion enterprises buy coal from the coal market and sell power to grid
enterprises. Therefore, generation enterprises provide the connec-
tion between the coal sector and power sector. Under the current
management mode of the power industry, unification has negative
influences on generation enterprises, including the following.
(1) The risks of upstream coal price shocks
In 2014, China’s total power generation capacity reached 1.36
billion kW, of which the installed capacity for coal-fired generation
accounted for 67.3%. The power generation of the whole country
has increased to 5463.8 billion kWh, of which coal-fired power
generation constitutes more than 80% (CEC, 2012). According to
the data, coal-fired power generation is the dominant way of pro-
ducing electricity in China. Every large generation enterprise has
large coal-fired generation capacity.
According to Section 4.1, the generation enterprises must buy
coal at the market price and sell power to grid enterprises at the
fixed on-grid price. Therefore, after unification, when the coal price
was decided by the market, the generation enterprises alone were
completely exposed to upstream coal price shocks. Hence, gen-
eration enterprises should seriously consider how to address this
problem
(1) The impacts on the business operation and investments of gen-
eration enterprises
According to the analysis in section 2.2, the supply of coal in
China has been abundant in recent years. The gap between the price
of the market coal and the CE price in special contracts has been sig-
nificantly reduced. The CE price in special contracts was even higher
than the market coal price in some regions. Hence, unification of
the dual-track coal pricing mechanism has had a limited impact on
the profitability of generation enterprises for now. Even when the
Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
on-grid price is under the control of the government, generation
enterprises are also able to afford the cost.
However, now the CE price is mostly decided by the market.
Once there is an increase in the CE price, the cost of power genera-
tion will increase; therefore, when the operation cost is higher than
the on-grid price, there is a possibility of large losses for generation
enterprises.
However, will the coal price increase? It is difficult to analyze
and predict. Nevertheless, due to the increasing capacity of coal
production and the abundant inventory of CE in large generation
enterprises, it is unlikely that the coal price will increase sharply,
but the market is too unpredictable.
When the CE price increase, the electricity generation market
will experience a decrease in enthusiasm for coal-fired power gen-
eration investment (coal-fired power plants will reduce or even
stop the production of units by claiming unit maintenance) because
the more that they produce, the more that they lose. The enthu-
siasm of investors (state-owned generation enterprises) will also
decrease, resulting in a reduction in investment for power genera-
tion in China. Therefore, there could be a lack of electricity supply
on the electricity market, which would not be conducive to the pro-
motion of the moderate development of the electricity market and
the socio-economic development of China. The No. 9 Document
will partly relieve this situation, and we will discuss this effect in
Section 5.1.
(3) Risks caused by over-dependence on coal-fired generation
The large generation enterprises rely heavily on coal-fired
power generation (Zhao et al., 2014). The proportion of coal-
fired generation among China’s five largest generation enterprises
(China Huadian Corporation, China Datang Corporation, China
Huaneng Group, China Guodian Corporation and State Power
Investment Corporation) is shown in Fig. 13.
The over-dependence on coal-fired generation by the five largest
generation enterprises has greatly weakened their risk-resisting
ability. In fact, it is the epitome of generation enterprises in China.
Most generation enterprises in China treat coal-fired generation as
their dominant means of producing electricity. Therefore, under the
present generation source structure, when drastic changes occur
in coal prices, it will surely increase the business risk of generation
enterprises.
In fact, the overdependence on coal is not the negative impacts
posed by the unification policy on the generation companies. It is
the inherent problems within China’s generation enterprises, it has
made them susceptible to the unification policy. From this point
of view, the unification works like a catalyst. Hence the weaken-
ing risk-resisting ability of China’s generation enterprises is the
result of overdependence and unification. Therefore the relation-
ship between this point is different from the other two points.
In addition, when coal-fired generation suffers from coal-price
fluctuations, the investments could possibly flow to solar photo-
voltaic, wind power and other new modes of energy generation,
which will increase the subsidy burden of the government. How-
ever, the related clean energy generation integration technology
has not yet been perfected to address the intermittency and ran-
domness of clean energy generation, which could pose a threat
to the operational security of the power system. In general, the
over-dependence on coal-fired generation could possibly affect the
security of the entire energy supply system (Wang et al., 2014).
5. Suggestions for government
The Chinese Government has exerted great effort to alleviate the
negative influences mentioned in Section 4.1 by undertaking the
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“the Coal and Electricity Prices Comove”. However, this policy has
fallen flat for several reasons. Therefore, the experience from the
failure of the Comove is of great reference value in policy making for
coal market reform. We first review the history of the Comove and
summarize its experiences before providing detailed suggestions
for the government.
The Central Government implemented the Coal and Electricity
Prices Comove (the Comove) from May 2005 to November 2009
(Shen et al., 2012). However, the on-grid price increased signifi-
cantly less than the coal price. Therefore, the increase in the cost
of generation enterprises, which was affected by the coal price,
could not be recovered by an increase in the on-grid price from the
Comove. In addition, the change in electricity price of the Comove
always fell behind the coal price change. Hence, in 2009, this policy
was almost cancelled. Here, we present the experiences from the
failure of the Comove.
First, there is a lack of reasonable supervision and government
guidance in the coal market. According to the coal price increase in
the years approximately 2008, when coal prices increased sharply,
the profits of the coal enterprises simultaneously rose suddenly
and sharply. The increase in coal price was mainly due to supply-
demand relationship changes. At that time, the rapid development
of China’s various industries led to a rapid increase in coal demand.
However, coal production could not meet the rising demand, which
led to soaring coal prices. Hence, to expand coal production further,
investors from all aspects (including state-owned enterprises and
private investors) increased their investments in the coal indus-
try. However, China’s economy grew slowly after years of strong
gains. In 2010, the growth in coal demand slowed, and the coal
price started to decline. However, the investment in the coal indus-
try kept increasing, and leading to the current oversupply situation.
Therefore, the coal price began to decrease sharply in recent years.
The whole fluctuation history of coal prices and investment has
shown the irrationality of the coal market. Hence, there should be
appropriate government guidance for the coal market to avoid irra-
tional investments and to give full play to price signals to allow the
market to decide the allocation of resources.
Second, the malfunction of the Comove has proved that the
imbalance between the coal market and electricity market cannot
be fully alleviated by administrative orders only (Yang et al., 2012).
Administrative orders always fall behind the fast-paced changes in
coal prices. In addition, the financial compensation provided by the
Comove may not be sufficient to cover the losses of the generation
enterprises. The best way to synchronize coal and electricity is to
build a healthy electricity market and to allow the administrative
orders to provide assistance in case market failure occurs.
In the following sections, we draw lessons from the Comove and
provide detailed suggestions for the government.
5.1. The promotion of electricity market
Essentially, the conflict between coal and power was due to
the unsynchronized marketization between CE and electricity. The
electricity market is out of touch with the coal market, and there
is an un-harmonic market mechanism and uncoordinated market
development between the coal and electricity markets. Therefore,
the rationalization of the electricity and CE market mechanisms
will be a better way fundamentally to solve the contradictions
above. Additionally, power industry reform must be accelerated,
and the establishment of a competitive electricity market is of great
urgency to realize the cooperative development of the market for
CE and electricity (Sun et al., 2013).
The Chinese Government has realized the current problems of
power and coal industry. A government document, entitled Relative
Policies on Deepening the Reform of the Power Industry (the so-called
No. 9 Document), was issued by the State Council on March 25,
Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
11
2015 (NDRC, 2014a,b). The No. 9 Document contains specific poli-
cies for power industry reform in 2015, focusing on solving the
current problems in the power industry. At the same time, it is dif-
ficult to conclude that realizing cooperative development of the
coal market and electricity market is one of the ultimate goals of
the No. 9 Document. However, the document will partly relieve
the present coordinative problems. The electricity market struc-
ture and price chain will be changed after the implementation of
the No. 9 Document, as shown in Fig. 14.
After the No. 9 Document, the transaction price will replace
the former on-grid price, and it will be decided by the market
between generation plants and users. Generation plants will sell
power to grid enterprises at the transaction price, which is decided
by negotiation between generation plants and users (Zeng et al.,
2015). Therefore, the price of electricity for users consists of three
parts: the transaction price; transmission and distribution prices;
and government funds. In addition, the transmission and distribu-
tion prices are separated. Under the new pricing mechanism, only
the transmission and distribution price and government funds are
decided by the NDRC, which determines the transmission and dis-
tribution price according to the investment and operation costs
of power grids. The whole evaluation process is supposed to be
disclosed to society (Zeng et al., 2016).
The core idea of the No. 9 Document is to allow the price to play
the vital role in the electricity market. Therefore, the former pricing
mechanism of the power industry has been changed, and gener-
ation enterprises will negotiate with users directly. This change
has brought the opportunity that fluctuations in coal prices can
be reflected in the electricity market. To promote this reflection
further, measures should be undertaken from both sides.
In the short term, a transition method is needed when the elec-
tricity market is still not fully functioning, which is also the request
of many generation enterprises. After the No. 9 Document, the gen-
eration enterprises will negotiate with the users based on their
generation costs and operation costs. All of these costs were mostly
decided by the coal price. However, this pricing mechanism will
require time to develop. Therefore, the Comove is essential dur-
ing the initial stage of the No. 9 Document, and it performs as a
transition method. When the effect of coal price fluctuation can
be introduced to the price decisions of the electricity market, the
Comove will be replaced gradually.
In the long term, many systematic obstacles must be overcome
through a series of government measures. The pricing mechanism
of the electricity market should be further perfected; market design
and appropriate supervision mechanisms are must be urgently
implemented according to the characteristics of the market. In
summary, there is still a long way to go for China’s power indus-
try reform. However, as one of the key downstream industries of
coal, this reform process should be accelerated to allow the price
(including coal price and electricity price) to play a vital role. For
more details about related policies about power industry reform in
2015, please see our earlier article (Zeng et al., 2016).
At the same time, the recent development of coal prices/demand
and the power sector reform and their impact on coal prices are
worth noting. From the implementation of the No. 9 Document in
several provinces, the users and generation enterprises are willing
to participate in the market and undertake negotiations.
However, the electricity price and coal price are both decided
by supply and demand sides. The growth of power consumption in
China has been slow in the last few years, and this development
trend could last for the next few years because China’s govern-
ment is now attempting to realize the industrial transformation.
An environmentally friendly industrial structure with high energy
efficiency is the goal of transformation. However, the market is
too unpredictable, especially China’s coal market, which is partly
under the control of the government. Therefore, we suppose that
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demand for CE might not rise sharply due to current trends in power
consumption. Because the coal price is decided by the supply and
demand sides, the future trend in the coal price is unknown.
As is concluded above, the establishment of an electricity market
in China will be one of the key solutions to resolve the imbalanced
development between the electricity market and coal market.
However, further measures and suggestions should be proposed
for the government to realize the goals above and to guide the
generation enterprises to develop well.
5.2. The improvement of the control over the CE market from the
government
When market failure is about to occur, the government will
intervene to prevent it by administrative orders. At the same time,
the government, which includes the price management depart-
ment and the economic operation management department, has
the right to evaluate and manage the business operation of state-
owned enterprises (generation enterprises are mostly state-owned
enterprises). The government has forced generation enterprises to
generate power without the consideration of loss to ensure the
normal operation of various industries, which is the social respon-
sibility that the generation enterprises should accept. At the same
time, the government assesses the operation of generation enter-
prises based on the profit they earn. All of these measures could
lead to inconsistency in the regulations of generation enterprises.
To perfect the regulation and control of the CE market and the man-
agement mode of generation enterprises, the following measures
should be undertaken:
• cancel the profit indices of the generation enterprises during
assessment;
• provide more financial subsidies for generation enterprises when
coal prices increase sharply; and
• levy penalties for the bullish campaign behaviors of coal enter-
prises.
5.3. Optimized coordination between government departments
Coordination between governments should be organized in two
aspects.
First, coordination between governments must occur at all lev-
els. Unification and electricity market reform have been generalized
across the whole country. The CE market and electricity market
have two levels: the provincial market and national market. They
are under the control of provincial governments and the Central
Government. Therefore, mutual coordination among governments
at all levels is of great significance, as is coordination between
different provincial governments. Provincial policies should be cre-
ated according to the actual situations of their own provinces
and should not contradict the national policies. At the same time,
national policies should consider the characteristics of different
provinces to render the policies more compatible.
Second, coordination between different government depart-
ments is necessary. As discussed in Sections 2.2 and 4.1(2), the
transportation capacity of CE is another important factor that will
influence the coal market operation. Hence, the related government
departments (CNCA, NDRC, China Railway Corporation) should
mutually corporate with each other to create transportation plans
to satisfy the demand for coal transportation and to avoid the pos-
sible market operation problems caused by a lack of transportation
capacity.
Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
6. Measures for generation enterprises
Generation enterprises are the connections between the coal
industry and power industry. Since unification, generation enter-
prises are now facing the risks of upstream coal price shocks. In
addition, the electricity market reform has provided them with
opportunities to reflect the upstream coal price fluctuations in the
electricity market. Now, considering their special status, genera-
tion enterprises are faced with market fluctuations from both sides.
Hence, in this section, we provide detailed measures for generation
enterprises.
6.1. The vertical integration strategy of generation enterprises
After unification, the direct transaction cost between coal enter-
prises and generation enterprises will increase (Li, 2012). From the
point of view of decreasing the market transaction costs and reduc-
ing the operation risk, the generation enterprises must implement
a vertical integration strategy. On the one hand, the generation
enterprises are allowed to invest in coal enterprises and become
their own shareholders to obtain coal supplies at a lower price.
On the other hand, generation enterprises can apply for coal min-
ing qualifications or acquire coal enterprises and bring coal mining
operations into their own businesses.
6.2. The reduction in the operation costs
Although the supervision of coal quality should be increased due
to marketization, stringent checks of coal quality are still greatly
needed for generation enterprises. As a result, the operation and
maintenance costs of units will decrease; generation enterprises
will strengthen the management and supervision of coal quality
(by strengthening sampling checks) and will request compensation
when the CE amount is inconsistent with the contracted amount.
Generation enterprises must stop breaches of contracts to restrain
adulteration (Xu et al., 2011). Generation enterprises should also
actively order high-quality coal and build long-term cooperation, as
well as co-dependency with coal enterprises with good reputations.
6.3. Fuel cost control
Generation enterprises should actively explore new procure-
ment channels and optimize procurement programs to establish
long-term and stable strategic cooperative relationships with CE
and other fuel suppliers. Long-term coal and fuel supply contracts
are necessary to stabilize fuel costs, as well as the CE supply. For
generation enterprises, several enterprises gathering together to
sign a large contract is always a good means of decreasing procure-
ment costs by centralized procurement (Yu et al., 2011). Related
data have shown that group contracts are more economical than
single contracts.
If the increase in CE prices is uncontrollable, generation enter-
prises should further strengthen their internal control of fuel costs
to optimize CE quality and to reduce coal consumption.
6.4. Strict control of the financial risk of generation enterprises
After unification of the dual-track coal pricing mechanism, the
CE price could rise due to the imbalance between supply and
demand. As a result, generation enterprises could suffer continuing
losses and a lack of cash flow. Taking loans might be a good way
to alleviate these operation difficulties. However, it could lead to
other problems: an excessive asset-liability ratio will lead to a seri-
ous decrease in debt payment ability, while high funding costs will
amplify the financial risk. For this reason, generation enterprises
should actively expand their financing channels. First, increasing
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equity capital is needed to reduce the reliance on bank loans and
to reduce the financing risk. Second, bond financing should be
enlarged to reduce the cost of capital. Third, analysis of the supply
and demand conditions of the financial market is of great urgency to
understand market trends according to movements of the interest
rate and exchange rate. Finally, more diversified financing meth-
ods should be undertaken rationally to create appropriate financing
arrangements to control the costs of capital and to reduce the finan-
cial costs, as well as to avoid financial risks (Wang and Nakata, 2009;
Wang et al., 2011).
Based on the above viewpoint, the generation enterprises must
adjust the scale and speed of the newly built power plants. Since the
power industry reform in 2002, generation enterprises have begun
to scramble blindly for nationwide power generation resources. As
a result, their installed capacity has increased rapidly. However, the
majority of funds used for expansion came from loans, which led to
an increased asset-liability ratio of the generation enterprises and
an increasingly heavy financial burden. Therefore, the adjustment
of expansion would be the only way of saving funds and achieving
better sustainability.
6.5. Optimization of the generation source structure in
generation enterprises
To improve the competitiveness of generation enterprises in the
coal market and to alleviate the operation difficulties caused by
rising coal prices, as well as the CE supply, generation enterprises
should implement a diversified power source structure develop-
ment strategy. The acceleration of the development of hydropower,
nuclear power, wind power and other new energy sources should
be undertaken. At the same time, the proportion of non-fossil
energy in the primary energy supply should be improved (Lin and
Liu, 2010). Under the Central Government’s policy, which will pro-
mote the development of new energy, generation enterprises must
actively invest in new energy industries. By doing so, the coal-fired
power enterprises can obtain the support of the country’s poli-
cies and can increase their corporate earnings, as well as decrease
their excessive dependence on coal. As a result, the operational
and financial risks caused by the imbalance between CE and the
electricity market will be reduced.
7. Conclusions
China’s coal supply has become abundant in recent years, as
observed in the narrowing price gap between the market price of
coal and the price of CE in special contracts. At the same time, the
acceleration of construction of China’s railways and ports has miti-
gated bottlenecks in coal transportation. According to the business
conditions of the generation enterprises, the implementation of
unification of the dual-track coal pricing mechanism is essentially
mature. Unification of the dual-track coal pricing mechanism will
help to develop a healthy coal market in the near future. How-
ever, due to the non-market-oriented mechanism of the power
industry, unification could have negative influences on both the
coal industry and the power industry in the short term. From the
perspective of the government, the promotion of the electricity
market is of great urgency to relieve the imbalance between the
coal industry and power industry, while a reduction in the profit
assessment indicators of the coal and power enterprises, grants-
in-aid for generation enterprises and penalties for price pushing by
coal enterprises will be effective means for addressing the market
risk of power generation. Optimized coordination between differ-
ent government departments should be undertaken. For generation
enterprises, their greatest negative influences are the operational
risks caused by upstream coal price shocks. Hence, optimization of
Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004
13
the power source structure and the reduction of operational costs
are effective measures for withstanding the risk. At the same time,
the control of fuel costs and the financial risks of the generation
enterprises, as well as vertical integration strategies, are of great
urgency.
Acknowledgments
This paper is supported by “the Fundamental Research Funds
for the Central Universities” (Grant no. 2015XS43), the National
Natural Science Foundation of China (Grant no. 71271082) and the
National Soft Science Research Plan (Grant no. 2012GXS4B064) of
China.
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Please cite this article in press as: Yang, Y., et al., Unifying the “dual-track” pricing mechanism for coal in China:
Policy description, influences, and suggestions for government and generation enterprises. Resour Conserv Recy (2016),
http://dx.doi.org/10.1016/j.resconrec.2016.04.004