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China's reform of the electric power sector has been well-planned but has not fared as well as expected. The concerned parties seem to have reached little consensus as to how to implement the State platform mapped out in 2002. At yesterday's press conference, the vice-president of the State Electricity Regulatory Commission (SERC) apparently refused to make clear his position on the super high voltage power grid. What would be the world's largest grid would have 1,000 kilovoltage alternative current transmission. It is being promoted by the State Grid Corp of China (SGCC). Instead, the commission vice-president said the country should "make full use of" the existing grid. The 500 kilovoltage transmission accounts for a large part of the national grid system. The grand project of the super high voltage power grid remains controversial. It would be expensive. The project is expected to cost 400 to 800 billion yuan ($51.7 to $103.5 billion). It would be large a national grid crisscrossing the entire country. While the SGCC claims the grand grid will improve efficiency of power transmission, many experts have expressed deep concern. In an emergency, a break in one link of the grid might affect the entire network. Moreover, experts have pointed out that the plan goes against the 2002 State Council regulation, which proposed regional grids instead of a single national grid. The aim was to create a competitive market and improve efficiency through promoting competition. In a mature market economy, market regulators can take the lead in resolving such controversies. They can balance the interests of industrial players, consumers and the nation as a whole. As the SERC is still a relatively new institution, established in 2003, it does not yet possess all the necessary functions to cope with such a challenge. Now it must share much of these functions with the National Development and Reform Commission, the all-powerful policymaking agency. The power regulators, unfortunately, do not have the power to regulate prices, nor have they been empowered to play a leading role in the sector's policymaking. The SERC needs to be given more power and authority to unify the regulatory regime and better implement its regulatory role. (China Daily April 6, 2007) |
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