Private investors get greenlight in power sector

Updated: 2012-06-20 10:22 ( Xinhua)

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BEIJING China on Tuesday issued a guideline to greenlight the entry of private capital into theco untry's Statedominated power sector, marking the latest move to increase the economy'sefficiency a nd bolster growth. The 15article guideline, issued by the State Electricity Regulatory Commission, gave specificpo licies regarding the sector's market access, supervision of fair power coordination,renew able energy network access and price reforms. The move came after a number of Staterun sectors, including the railway, transport andfinance sectors, published similar guideli nes to encourage the participation of private capital. The central government in May 2010 published an instruction to allow the presence of p rivateinvestment in monopolized sectors, but the effort has only recently gained traction, as China'sgrowth has slowed significantly over the past 11 quarters, dragged down by weak overseasdemand. The guideline said enterprises under all types of ownership are supported to enter the p owermarket, and the access standard for renewable energies such as wind and solar po wer will beimproved. Fair treatment will be given to all enterprises, it said, stating that power infrastructureco mpanies owned by private investors will be granted operation certificates. It said the government will urge state grid enterprises to strike grid connection contracts andpower transactions with private power firms and step up supervision to ensure trans parencyand fairness. The guideline also stressed supervision over the sector's pricing system, vowing to unify theprice of electricity for all enterprises, both private and State-owned. In addition, the government will work to gradually open the power survey and design,co nstruction, consultation and the material and equipment purchasing markets, it said. According to Lin Boqiang, head of the Energy Economic Research Center of Xiamen Un iversity,private investment currently only takes less than 3 percent in the sector's total in vestment.