Since 2005, the Chinese government has intensified its efforts to privatize parts of the sector. Whereas the transmission and distribution of electricity remained under state control, the power generation market was partly opened to private and foreign investors. The main reasons for this change in direction were to be seen in the need to operate the system more cost-effectively and to attract clean technologies for power generation. Some major grid operators now include the former monopoly State Grid Corporation, and China Southern Power Grid.
Traditionally, the dominant source of energy production was fossil fuels in China. International criticism regarding the impact of China’s energy mix on the environment, for its high carbon emission as a result from heavy reliance on coal as main source for electricity generation, was joined by rising concerns of the population over heavy air pollution. Therefore, as a response to these concerns, renewable energy sources such as wind, biomass and solar power capacities have been developed at an incredible pace in recent years. Consumption of renewables in China ranged at over 6.63 exajoules in 2019. In the thirteenth five-year plan, China planned to reach a total of 676 gigawatts of green power capacity by 2020, which was already achieved by the end of 2018.
Despite the effort of increasing share of renewable energy, power generation from fossil fuel in China still multifolded itself in the last 20 years in order to match the constantly increasing energy demand. The energy demand in China was forecasted to peak around 2030 and would start decreasing from technological advancement in the following decades. The installed capacity for power generation was forecasted to grow six times of the size now in the next three decades, while vast majority of that would be sourced from green energy .