Four must-reads on China’s power sector reform

By Anders Hove

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Earlier this week, China released a long-anticipated draft of power sector reform plans (“Deepening Reform of the Power Sector”). Though the plan is not finalized, it will likely form the basis of new policies. In our view, power sector reform could help reduce emissions significantly. The plan includes efforts to:

1. Decouple grid company revenues from electricity sales growth—an approach that is already being piloted in Shenzhen and Inner Mongolia. This would remove a long-standing barrier to policies that promote more energy efficiency.
2. Improve power sector dispatch (the timing of when power plants are turned on and off) to favor cleaner, more efficient power plants. Better-calibrated timing could substantially cut air emissions that contribute to both PM2.5 and carbon pollution.
3. Further encourage the actual purchase and use of all the solar and wind energy that China already has set up to produce. Utilizing alternatives that already exist is one of the easiest and cheapest ways to cut emissions from coal.

Here’s what we’re reading related to the new document and other power sector developments:

The full text of the power sector reform draft (Chinese)

Three more smart takes:

• Regulatory Assistance Project on the reform draft

• Bloomberg on China’s plans to use more of the renewable energy it already generates

• PV-Tech on China’s new, higher 2015 solar PV targets

Anders Hove is Associate Director for China Research at the Paulson Institute.