one standard would not fit the needs of different
regional transmission systems and asked for a
voluntary regional approach, in contrast to
FERC’s mandatory approach. During the
exchange of proposals between FERC and
transmission system entities, several entities with
high electricity prices, such as Midwest Independent Transmission System Operator (MISO)
and Southwest Power Pool (SPP), adapted
FERC’s standard market design to their regional
needs and introduced ISOs voluntarily. Following these adaptations, FERC gave up its attempt
Table 3 Summary of network arrangements in China
Institutional
arrangements
Transmission
planning and delivery
Network pricing
Modernising
network
arrangements
Institutional model:
Transmission
system operators
(TSOs)
State-owned
inter-provincial
network
companies
(SGCC and CSG)
Provincial
subsidiaries of
these companies
own and operate
each network as
TSOs
Planning:
The NDRC sets
five-year national
investment plans to
drive economic
growth
Provincial
governments and
regional NDRC
branches then adapt
national plan targets
to their territories
Delivery:
Provincial grid owners
are responsible for
delivery in their
province
Interconnection
between provinces is
delivered by reginal
grid companies
SGCC and
CSG invest in
interconnection
between regions
Investment regime:
Currently, merchant
transmission
investment is not
possible
No locational
pricing in the
grid
NDRC and
SERC set
central
wholesale and
retail power
prices
Provincial
governments
can amend
centrally set
prices
Readiness for
decarbonisation:
Under current
network
arrangements,
planning
processes do
not incentivise
non-network
alternatives to new
transmission
assets
However,
investment in
storage is rising
and the central
government runs
pilot projects and
provides subsidies
for storage, for
instance, the
Golden Sun
programme
Note SGCC = State Grid Corporation of China; CSG = China Southern Power Grid.
Source Vivid Economics
Special Report 1: A Study of China’s Energy Supply Revolution
107
regional transmission systems and asked for a
voluntary regional approach, in contrast to
FERC’s mandatory approach. During the
exchange of proposals between FERC and
transmission system entities, several entities with
high electricity prices, such as Midwest Independent Transmission System Operator (MISO)
and Southwest Power Pool (SPP), adapted
FERC’s standard market design to their regional
needs and introduced ISOs voluntarily. Following these adaptations, FERC gave up its attempt
Table 3 Summary of network arrangements in China
Institutional
arrangements
Transmission
planning and delivery
Network pricing
Modernising
network
arrangements
Institutional model:
Transmission
system operators
(TSOs)
State-owned
inter-provincial
network
companies
(SGCC and CSG)
Provincial
subsidiaries of
these companies
own and operate
each network as
TSOs
Planning:
The NDRC sets
five-year national
investment plans to
drive economic
growth
Provincial
governments and
regional NDRC
branches then adapt
national plan targets
to their territories
Delivery:
Provincial grid owners
are responsible for
delivery in their
province
Interconnection
between provinces is
delivered by reginal
grid companies
SGCC and
CSG invest in
interconnection
between regions
Investment regime:
Currently, merchant
transmission
investment is not
possible
No locational
pricing in the
grid
NDRC and
SERC set
central
wholesale and
retail power
prices
Provincial
governments
can amend
centrally set
prices
Readiness for
decarbonisation:
Under current
network
arrangements,
planning
processes do
not incentivise
non-network
alternatives to new
transmission
assets
However,
investment in
storage is rising
and the central
government runs
pilot projects and
provides subsidies
for storage, for
instance, the
Golden Sun
programme
Note SGCC = State Grid Corporation of China; CSG = China Southern Power Grid.
Source Vivid Economics
Special Report 1: A Study of China’s Energy Supply Revolution
107