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State Grid hails easing of curbs

Zheng Xin
Updated: Jun 30,2018 10:15 AM     China Daily

Beijing-based State Grid Corp of China said it welcomes government efforts to further ease ownership caps on the construction and operation of power grids.

Delegations from the European, American and African markets have been paying close attention to China’s opening-up in the power grid sector, and the company will actively cooperate with the new rules to diversify the power grid market, it said on June 29 during a news conference in Beijing.

State Grid is the country’s main power supplier and runs the majority of the nation’s electricity distribution networks.

China unveiled on June 28 a long-anticipated easing of foreign investment curbs, including allowing foreign investment in the construction and operation of power grids in the country.

The reforms will take effect on July 28, according to the National Development and Reform Commission, China’s top economic planner.

Beijing’s move is in accordance with its promise to open its energy markets further, according to an analyst.

“The opportunity for foreign utilities to invest in China’s growing electric power grid networks is exciting as only the power generation sector has been open to foreign investment,” said Joseph Jacobelli, a senior analyst of Asian utilities at Bloomberg. “Some of the utilities that already have a presence in China could potentially be the initial investors.”

Hong Kong’s CLP Holdings, Korea Electric Power Corp, France’s EDF and Italy’s Enel are all potential investors in jointly constructing and operating the country’s power grid networks, according to Jacobelli.

A series of major energy related opening-up measures also include restrictions on foreign investment in gas stations as well as on rare earth and tungsten smelting.

The removal of the 30-site limitation imposed on international fuel retailers has been well received among oil firms.

Royal Dutch Shell said the limitation removal will create more space and opportunities for international retailers in China and customers will have more options to choose from.

“We will continue to employ joint venture, wholly foreign-owned enterprise or dealer models, whichever are most competitive and best serve our customers,” the company said.

“We have proved that we can effectively serve our customers together with our joint venture partners, as well as through our own operations. We will be happy to use any business models available to us that will help us reach even more customers in the future,” it said.

Hanna Hofer, president of BP China Retail, said the company believes that a more open market will attract more investment and, ultimately, benefit consumers with better quality and more choices.