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Additional info for China's Power Sector Reforms: Where to Next?
46 - THE STARTING POINT regulated by NDRC. Similarly, transactions between Yangcheng power station and Jiangsu province (located in the East China grid area) are jointly regulated by NDRC and Jiangsu provincial planning commission. The Yangcheng power station presents an interesting case. It is situated in Shanxi province, China’s main coal production base, but is committed to selling its power to Jiangsu province to which it is connected by a dedicated AC transmission line. Thus, it is treated as a power station within Jiangsu province and pays network fees to SG at a regulated rate.
Nevertheless, domestic private investors are playing a growing part in generation. Given their limited capital resources, this typically focuses on small projects such as small hydro, and often takes the form of joint ventures with local, government-owned corporations. Diversification away from central government control and financing Until 1985, China’s power sector was under the direct control of central government, which owned all the assets. In that year, China liberalised investment by introducing a policy to encourage local government and companies to invest in new generation capacity, thereby gaining the right to control and benefit financially from this new capacity.
Current plans are to divest some of the coal-fired plant. Although care was taken in unbundling the State Power Company, various market share factors persist that are important to competition prospects. None of the five new generating companies were allocated more than a 20% share of any one of the regional power markets. However, their geographic roots in certain parts of the country are still evident. For example, Datang remains strong in the north, near the coal supplies; Huaneng is strong along the east coast; and Huadian is well-represented in Shandong province.