China to Establish Six Regional Electric Power Markets

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Last updated at: (Beijing Time) Friday, August 01, 2003

China to Establish Six Regional Electric Power Markets

China is to set up six regional electric power markets in the next three years so as to establish an open, competitive and unified system of electric power markets.

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China is to set up six regional electric power markets in the next three years so as to establish an open, competitive and unified system of electric power markets.

Shi Yubo, vice chairman of the State Electric Power Regulatory Commission (SEPRC), said the commission recently issued a series of regulatory documents aimed at optimizing electricity distribution and relieving shortages in some parts of China.

As the Chinese economy grew rapidly, the number of provinces with power shortage increased from 12 to 16 this year. The number is expected to continue to rise next year. Local experts predict that the shortage of power supply will remain a strain on the economy in the next three to five years. Power shortage may even worsen in certain regions and seasons, they said.

China has accelerated the development of power industry by adjusting investment plans for the period of 2001-05. It also greatly increased investment in the construction of power plants when drafting the next five-year plan.

The State Council recently approved construction projects for 13 power plants with a total investment of approximately 51.2 billion yuan. The power plants have a total generating capacity of 11.88 million kilowatts.

The development of regional electric power markets should be under uniform planning, regulation and management, Shi said. Different regions could choose their own market pattern to cater to specific local conditions.

The regional market will be either partially or completely opento competition of power suppliers, according to the SEPRC documents.

China's electric power market had yet to be completely opened to competition, Shi said but he added that the market would be fully opened in the future as it matured and had its pricing mechanism reformed.

He said the guiding principles of development were to serve the sustainable and coordinated development of the power industry, in an effort to break down market barriers and optimize resource distribution, to ensure fair competition and efficiency and to guarantee a secured power supply.

After setting up regional electricity markets on an experimental basis in northeastern China in 2003, China would establish electric power markets in other regions in 2004 and in 2005.

At the same time, China is drafting laws and regulations regarding the electric power industry for further market operation.

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