Analysis on the competition of generating market in the ongoing power market of China

State Council of China enacted the regulations for the electrical industry reformation on March 5, 2002 as No. [2002]5 order. It states that `The generating groups should be separated from the power grid companies; the assets of the previous State Power Corporation should be divided into two parts of the generation utility and power grid, and the assets, financing and personnel of it should be regrouped', `Restructure the generating assets owned by the previous State Power Corporation and establish several independent power generating groups in accordance with modern corporation system', `In the restructuring of the generating assets, the quality and the local characteristics of each power plant should be considered synthetically to guarantee the rational reorganization. In principle, each generating group may share no more than 20% in every power market'. Before this reformation, the capacity of generating assets managed by the State Power Corporation is about 149 million KW in total. In the reconstruction, enough generating capacity (no more than 20 million KW) must be kept by the power grid companies for the system security consideration, such as frequency modulation and the operation under peak-load. The remaining capacities besides the above reservation will be regrouped into five generating groups as A, B, C, D, and E; the total capacity of each utility is about 25 million KW. In this paper, the responsibility, organization, personnel, etc. of the main competition bodies are analyzed and proposed. It also points out that at this stage, there are still quite a lot of preparation work that need implementation to realize the competitive Chinese power market. The authors also analyze the appropriate competition structure of power market according to the practical circumstances in Chinese power market. In addition, the reasons why Chinese power market cannot entirely copy the market pattern of other countries are analyzed. At the end of this paper, certain practical problems, which must be resolved urgently for carrying out the competition system, are put forward. In this paper, the responsibility, organization, personnel, etc. of the main competition bodies are analyzed and proposed. It also points out that at this stage, there are still quite a lot of preparation work that need implementation to realize the competitive Chinese power market. The authors also analyze the appropriate competition structure of power market according to the practical circumst