Power Sector in China

The power sector in China has witnessed a phenomenal growth in recent years, led by increased demand in the industrial and household sectors. The demand growth in the power sector is fueled primarily by the very high rate of sustained economic growth - the gross domestic product of China has increased at an average of 9.8% per annum since 1980. A significant share of its GDP comes from the industrial sector (~49% in 2006), which relies heavily on availability of electricity for manufacturing and other activities. Furthermore, increases in per capita income and standard of living have resulted in high electricity demand from the residential sector, especially as electricity-based consumer goods and services have rapidly penetrated the domestic Chinese market [9].

In order to meet the steep growth in the demand for electricity, installed generation capacity in China has recently risen at an unprecedented pace. The electricity sector in China has also gone through reforms that have made significant structural changes that have enabled China to meet the challenge posed by rapidly growing demand.

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