Cover Story: The Dilemma of China’s Power Market Restructuring

After two decades of proceeding in fits and starts, China’s campaign to overhaul its electricity market — the world’s largest — hit a $1.39 billion pothole in September in eastern China’s Zhejiang province.

The Zhejiang energy bureau ordered companies generating and selling electricity to surrender millions of dollars of their revenue to ease surging power costs that were squeezing local businesses. That disrupted a push by the central government to give supply and demand a bigger role in determining prices in pursuit of a balance between state control and market power.