Performance and challenges of power sector reform in China since 2015

China has launched a comprehensive market-oriented reform of the power sector since 2015 to foster competition and enhance efficiency. This article summarizes the progress, achievements, and challenges of these reforms. Progress has been made in enhancing competition in wholesale and retail markets, strengthening regulation over grid costs and services, expanding inter-regional transmission, and promoting renewable electricity. Reform efforts have yielded several notable achievements: significantly improving generation efficiency, particularly among smaller-capacity units in the short term; substantially reducing industrial and commercial electricity prices, though primarily due to government intervention rather than market competition; effectively capturing market dynamics through spot market, although their limited scale has constrained broader impacts; and improving efficiency and welfare through market integration but raising concerns about equity. In the transition to a low-carbon energy future, two pivotal challenges remain: striking a balance between market mechanisms and government intervention; and ensuring system flexibility and long-term resource adequacy.