China to Split State Power Corp into Smaller Power, Grid Companies

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Last updated at: (Beijing Time) Friday, April 12, 2002

China to Split State Power Corp into Smaller Power, Grid Companies

China is to split the China State Power Corporation (CSPC) into smaller power companies and electricity carriers so as to break the CSPC monopoly in the generation and supply of power.

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Regrouping for breaking monopoly

China is to split the China State Power Corporation (CSPC) into smaller power companies and electricity carriers so as to break the CSPC monopoly in the generation and supply of power.

The State Development Planning Commission (SDPC) announced Thursday that the power plants of the CSPC will be regrouped into four or five smaller power companies. The Huaneng Power (Group) Corporation under the SDPC will become an independent power generating company.

The remaining power plants of the SDPC will be divided equally and formed into three or four new power companies.

The power grid owned by the CSPC will also be divided up between two newly founded power grid companies.

The State Power Grid Corporation will establish five regional companies in north, northeast, northwest, east and central China. It will also manage the power grid in Tibet.

The Southern Power Grid Corporation will own the power grid in Guangdong and Hainan provinces in south China and in Yunnan Guizhou and Guangxi in southwest China.

Competition expected after regrouping

The State Development Planning Commission (SDPC) said the reorganization of the power companies will be completed by the end of this year.

The SDPC said China would put into effect new emission standards for power companies and give price incentives to the development of environment-friendly energy.

The power companies will compete with each other in terms of prices and cleaner power generation as they try to win contracts from power grid companies.

The Chinese government will also intervene with the pricing of power suppliers by grid companies that are in a monopoly position in the market.

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