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37 Energy L.J. 135 (2016)
Smart Grids in China: Industry Regulation and Foreign Direct Investment

handle is hein.journals/energy37 and id is 165 raw text is: SMART GRIDS IN CHINA: INDUSTRY REGULATION AND FOREIGN DIRECT INVESTMENT Feng Xiufeng* Synopsis: As the largest electricity consumer in the world, China is suffering from serious environmental pollution resulting from the fossil fuel dominant energy supply. Smart grid is seen as a significant way to accommodate intermittent renewable energy, increase efficiency, and cultivate energy saving, and is treated as a prioritized industry in China. China has become the world's largest market for the smart grid industry. This article analyzes China's policies on smart grids, discusses the rules on market access for foreign direct investment (FDI) in smart grid industry, and also points out the main challenges. The author finds that, although the power grid industry is still under reform and facing a lot of challenges, there are many opportunities for FDI to get involved and incentives that foreign investment can utilize to promote their smart grid business development in China. I. Introduction ......................................136 II. From Traditional Power Grids to Smart Grids in China ................138 A. Definition of Smart Grids................. .............138 B. Reasons for China's Transition to Smart Grids .... ......140 C. Investment in Smart Grids in China........... ............142 III. China's Power Grid Regulatory Mechanism ...............143 A. Regulatory Bodies.. ..............................144 1. National Energy Commission (NEC).... ..............145 2. National Development and Reform Commission (NDRC) .. ..................................145 3. National Energy Administration (NEA).................145 B. Major Market Players................................146 1. Power Generation .....................................146 2. Power Grids ..........................146 C. Market Structure .......................... .....147 IV. Smart Grid Development and Policy in China .....................147 A. General Rules ........................ .........148 1. Strategic Targets: Strong and/or Smart Grid..... .....148 2. Systematic Plans..................... ........150 a. The 12th Five-year Plan on National Energy * Feng Xiufeng is a Ph.D. Candidate in International Law, School of Law, University of International Business and Economics; Visiting Student Researcher, School of law, University of California, Berkeley. This research is sponsored by the Domestic and Overseas Joint Training Program for Graduate Students of University of International Business and Economics. The author would like to thank her Supervisors Professor Shi Jingxia, Professor Bian Yongmin and Professor Daniel A. Farber for their guidance and support, as well as Steven Weissman for his inspiring advice. The author also wants to thank Qiu Zhijuan for her help in understanding the technical aspects of smart grids. Special thanks are given to Thomas Manson, Q.C. of Peking University, for his valuable comments to this paper. All errors remain my own. Email: fengxiufeng@gmail.com. 135

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