For the past decade, China's power industry has grappled with a number of tough questions. Should electricity prices be set by the government or the market? Is it better to have one national power grid or several regional grid companies? Does China really suffer from severe power shortages, or is it just a matter of inefficient energy allocation?
These are the issues that reformers faced as they tried to establish an open and competitive market for power generation and transmission in China. However, even key stakeholders are still unclear whether any real progress has been made.
Over the past 10 years, experiments have been started and then cancelled; plans made, then changed.
Grid allocation, for instance, was supposed to shift electricity transmission from state control to the open market. However, the massive government-owned State Grid (國(guó)家電網(wǎng)公司) continues to expand its influence.
Many reforms have been further complicated by sudden policy changes that have altered the role of industry regulators and other decision makers.
Throughout the reform period, two core issues have remained key - separating generators from transmitters and regulators from players.