ABSTRACT

Energy reform in China, starting from 1980s, is an essential part of China’s overall reform and opening up process with the major purpose to transit to a market-oriented economy. Energy reform was initiated from three perspectives: institutional re-arrangements, energy marketization and energy pricing reform. Separating the governmental function from business, streamlining the relationship between central and local governments, and SOE reform are the three major tasks of institutional reform. Energy marketization is to deregulate the system and diversify the investment. Energy pricing reform aims to liberalize the fuel and power price and move towards a market-based pricing system. Much progress has been achieved; however, energy reform generally lags behind the overall marketization process of China.

Nevertheless, successful stories are identified in low-carbon transition of the energy system in China. After more than ten years, rapid expansion of renewable energy and significant promotion of energy efficiency have been observed. The policies and measures, including overarching planning, pricing policies, fiscal incentives, renewable and energy efficiency obligation, command and control and target responsibility system, are highlighted in this chapter. Slowing down of energy consumption and CO2 emission growth displays the effectiveness of these policies, together with problems and areas requiring further improvements.