Private capital OK'd for power industry

China will encourage private capital participation in the power industry, an area previously the preserve of State-owned companies, according to officials at the State Electricity Regulatory Commission. Details will be published soon.

Private capital will be given access to operations involving thermal electricity, hydropower, nuclear power, new energy and particularly grid businesses, the China Securities Journal reported on Tuesday.

The National Energy Administration is working on drafting a plan to open the downstream infrastructure construction and grid business in some sectors.

Lin Boqiang, a professor at the Center of China Energy Economics Research at Xiamen University, said private capital investment was allowed in the power generation industry as early as 1985. However, it dropped from 15 percent of the total investment to less than 3 percent at present.

On June 5, a spokesman for the National Development and Reform Commission said details of the regulations on private investment will be published by the end of the month and the key message of the new rules will be reducing the requirements.

However, Lin said if private investors cannot see scope for profit, they will not enter the business.

"Ensuring a return for private companies is key and a regulated market for the power industry is necessary," he said.

dujuan@chinadaily.com.cn