China 's Largest Power Generator

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Overview: China is the world 's largest power generator in 2011. Net power generation was estimated 4,476 Terawatt-hours in 2011. Electricity generation increased by more than 89% since 2005. The industrial sector currently accounts for three-quarters of China 's electricity consumption. Fossil-fired power has historically made up about three-fourths of installed capacity, and coal continued to dominate the generation for electricity with 66% of total capacity in 2012. Regulatory Reform: China’s electricity sector has long been controlled by the state under its planned economy. Over the past decades, the government is working towards setting up an independent regulatory system and disintegrating the natural monopoly in…show more content…
Two grid companies (the State Power Grid (SPG) and the China Southern Power Grid (CSPG)) and a diverse set of generation companies were established. In this way, the grid and generation in electricity sector was separated. This provides a potential basis for developing vigorous competition in the electricity sector. Also, the State Electricity Regulatory Commission (SERC) was established as an independent regulatory body of the electricity sector in 2003. The goal of forming SERC is to oversee fair market competition and eliminate monopolistic practices after the dismantling of CSPC. Therefore, the regulatory framework has become one where the NEA is mainly responsible for price, planning, investment and construction, and the SERC has become an independent regulator under the State Council. The establishment of SERC demonstrates the government’s commitment to establish independent regulation in electricity sector. However, SERC lacked the authority to be an effective regulator because the NDRC still controlled most decision making powers in the electricity sector and the SERC became redundant. Eventually, in 2013, the SERC was merged into NEA. This follows Chinese government’s goal in creating an integrated regulatory system and enhancing regulatory power. The NEA has more clearly designated regulatory power. Thus, SERC could be viewed as a transitional institution. After fulfilling its role during the reform period, it is replaced with better practice
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