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)