4 Feb 2002 – The seven-man politburo of China’s ruling Communist Party has given its approval to a restructuring of the country’s electricity industry – a decision likely to impact on the dominant position of the State Power Corporation.

The country’s leadership hope that the break-up of the industry into component parts will lead to a reduction in electricity prices and will bring in substantial new investment.

The plan is separate transmission business from generation business and create two grid companies by splitting the assets of the State Power Corporation. One grid company will be responsible for the grids of Guangdong, Yunnan, Guizhou, Hainan and Guangxi regions in Southern China. The State Power Grid would be responsible for the other areas of China.

It is the intention to establish four generation companies although it is possible they will all remain affiliates of the State Power Corporation thereby limiting the extent of true competition.

Beijing Datang Power Corporation is one of the four selected companies – a Hong Kong-listed company founded on four power plants of the State Power Corporation’s Northern Group with an installed capacity of 5.57 GW. Huaneng Power International has also been chosen. It is another listed company with an installed capacity of 10.81 GW.

SP Power Generation will be formed from northern region assets of the State Power Corporation. The fourth generating company will be Guohua Power Generation.