China’s Smart Grid policy like most countries is tied directly to its overall energy policy and is controlled by the central government through its chief administrative authority, the State Council. The State Council has tasked several government agencies and one dominant hybrid government/industry organization to inform and implement governmental energy policy on its behalf.
Governmental Energy Organizations and Laws
Chinese government oversight is centralized in nature but like many other countries has been delegated to several high level commissions which include: The State Electricity Regulatory Commission (SERC) founded in 2002 which oversees regulatory policies and rate structures of electrical energy. Another important governmental entity is The National Development and Reform Commission (NDRC). The NDRC was founded in 2003 and is the overall planning authority for all major national initiatives including energy related programs that it administers through its super energy agency known as the National Energy Administration (NEC).
The NEC is currently headed by the Chinese Premier Wen Jiabao and is comprised of senior ministers representing energy, telecommunications, defense and party interests. The NEC was created by the central government to create a coordinated infrastructure to manage energy policy and to develop a smart grid as part of its broader national security and economic competitiveness policy.
Modern Chinese governmental electric power policy was set in motion in April 1996 with the adoption of the Electric Power Law. This law established legal protections for investors, consumers, and producers and regulated the generation, distribution and consumption of electricity. The Electric Power law was followed by a series of minor State Council energy proclamations which together were consolidated into a wide sweeping energy policy declaration in 2007 know as China’s Energy Conditions and Policies. The 2007 Policy declaration was most notable from a Smart Grid perspective by addressing the need to do seven important grid related activities:
- Rationalize Power grids
- Strengthen regional power grids and power transmission and distribution networks
- Develop a emergency response system for power safety and reliability
- Strengthen power demand-side management (DSM)
- Exert control over power use for the purpose of conserving energy and increase energy utilization efficiency
- Reinforce the Renewable Energy Law and priority policies for renewable energy electricity
- Rural grid renovation
In March of 2010 China announced its plan for the implementation a "unified strong and smart grid" system is to be built nationwide by 2020 to incorporate thermal power, hydroelectric power, nuclear power and other renewable ones.
Hybrid Governmental/Industrial Organization
Similar to other countries China has adopted an approach to foster research and development and implement policy through a hybrid governmental/industrial organization of non-profit utilities and utility support organizations.
This organization in China is known as the China Electricity Council (CEC) which was founded in 1988 and is composed of 1440 members. The CEC is a consolidated non-profit social and economic organization composed of all China’s power enterprises and operates under the supervision of the State Electricity Regulatory Commission. Its mission is to provide service to the government and Chinese society by enforcing industrial management to the entire power sector in accordance with the industrial rules and regulations established by the government and to undertake consulting services at the request of its members.
The largest single power enterprise within the CEC is the State Grid Corporation (SGCC). The SGCC is the guiding force in developing the Smart Grid in China and has recently announced a three stage, ten-year deployment strategy for a "strong smart grid", which includes pilot projects and planning initiatives in 2009 and 2010, construction from 2011 to 2015 concurrently with standards development by 2014 and system upgrades from 2016 to 2020. The SGCC has also been active in developing smart grid standards, most recently announcing that 22 core criteria will be used to determine standards in China.