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Extra info for China's Power Sector Reforms: Where to Next?

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They reported to the State Planning Commission (SPC) and the State Economic and Trade Commission (SETC) which, respectively, held responsibility for strategic and operational matters. Most importantly, the SPC was required to approve all major investments and all energy prices. While broad reforms began much earlier, 1998 saw the start of important efforts to separate corporate responsibilities from government oversight of the energy sector, including the power sector. The key government functions relating to the energy sector were allocated to the renamed State Development Planning Commission (SDPC), the SETC and the newly created Ministry of Land.

The experiments were short-lived. The oversupply of power quickly dissolved and all available power was returned to the allocated system. Moreover, they fell short of reflecting a real market. There was little independence in the process, and in particular, no independent regulatory oversight. In addition, there were assertions that the State Power Corporation made many decisions in favour of its own generators. In 2002, under the State Council reform plan, China began to roll out regional power markets.

The The grid and system dispatch provincial roots of China’s original power industry led to a system comprising a large number of separate, high-voltage transmission grids. The number of separate THE STARTING POINT - 41 grids has decreased over time – from 18 in the early 1980s to 10 in 1997 (mostly through interconnection), and to six main regional grids by 2004 (see Figure 1 for locations of provinces): ■ The North China grid covers Beijing and Tianjin municipalities, Hebei, Shanxi, Shandong provinces, and the west part of Inner Mongolia.

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