Electricity sector in China

China's electric power industry is the world's largest electricity producer, passing the United States in 2011 after rapid growth since the early 1990s.

Most of the electricity comes from coal which accounted for an estimated 73% of domestic electricity production in 2014. Coal-fired electricity production has declined since 2013 coinciding with a major boom in renewable energy.

China currently lacks a single national grid. There are currently 6 wide area synchronous grids. The lack of a single grid frequently creates power shortages.

China has abundant energy with the world's third-largest coal reserves and massive hydroelectric resources. There is however a geographical mismatch between the location of the coal fields in the north-east (Heilongjiang, Jilin, and Liaoning) and north (Shanxi, Shaanxi, and Henan), hydropower in the south-west (Sichuan, Yunnan, and Tibet), and the fast-growing industrial load centers of the east (Shanghai-Zhejiang) and south (Guangdong, Fujian).

In April 1996, an Electric Power Law was implemented, a major event in China's electric power industry. The law set out to promote the development of the electric power industry, to protect legal rights of investors, managers and consumers, and to regulate generation, distribution and consumption.

Before 1994 electricity supply was managed by electric power bureaus of the provincial governments. Now utilities are managed by corporations outside of the government administration structure.

To end the State Power Corporation's (SPC) monopoly of the power industry, China's State Council dismantled the corporation in December 2002 and set up 11 smaller companies. SPC had owned 46% of the country's electrical generation assets and 90% of the electrical supply assets. The smaller companies include two electric power grid operators, five electric power generation companies and four relevant business companies. Each of the five electric power generation companies owns less than 20% (32 GW of electricity generation capacity) of China's market share for electric power generation. Ongoing reforms aim to separate power plants from power-supply networks, privatize a significant amount of state-owned property, encourage competition, and revamp pricing mechanisms.

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