Updates from the energy panels at the 9th Caixin Summit in Beijing. Follow our full coverage at CX Live.

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Update, 6:30 p.m., Nov. 19

Fan Bi, Invited Research Fellow of China Center for International Economic Exchanges

Give Market Forces Greater Role in Constrained Energy Sector, Scholar Urges

Chinese consumers are not reaping the benefits of falling global oil and gas prices due to constraints on the market, and comprehensive energy reforms cannot occur until these constraints are removed, said Fan Bi, a visiting research fellow at government-connected think tank the China Center for International Economic Exchanges.

Fan spoke as part of a panel on China’s energy structure at the 9th Caixin Summit on Sunday in Beijing.

"In general, the more goods are bought, the cheaper the price. But in China, energy products such as electricity, oil, gas and heat do not fully comply with this law, and sometimes the more are bought, the higher the price becomes.”

Supply constraints have emerged in the Chinese energy system due to rigorous controls that remain in place across the market. Power generation plans, prices of electricity from the central grid, and retail prices for gas and diesel, all remain centrally controlled, Fan said.

Furthermore, the industry is concentrated in the hands of just two power-grid companies and oil and gas is provided by just three big providers, which means that if they raise prices, consumers have no option but to pay more. Energy buyers and sellers operate as a complete monopoly, and there is still no sufficiently independent supervision of their activities, Fan said.

Fan called for an end to these restraints and for true reform — past reforms have mostly been industrial policy changes, rather than a move towards allowing a greater role for markets in the energy system, Fan said.

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Update: 6:00 p.m., Nov. 18

Zheng Gang, Chief Manager of Beijing Electric Vehicle Co. Ltd.

Government’s Ultimatum for Automakers to Produce Electric Cars a 'Double Edged Sword'

An executive at one of China’s largest new-energy vehicle makers has sounded alarm over the government’s ultimatum for automakers to produce electric cars next year.

“The original intention of the ‘quota’ mandate is good in general, but it is no doubt a ‘double edged sword’ in the process of implementation,” said Zheng Gang, the chief manager of Beijing Electric Vehicle Co. Ltd. (BJEV), a subsidiary of state-owned BAIC Motor.

The quota refers to a cap-and-trade program that will take effect in January. Under that program, automakers must obtain a certain number of credits that are linked to how many new-energy vehicles they sell. Those that don’t meet the quota have to purchase credits from rivals that exceed it.

“We have not yet sold a single credit despite the fact that we are probably the automaker that currently has the most credit,” said Zheng. But he said he is not concerned in the longer term as the government policy could still be adjusted according to new realities in the future.

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Update: 6:28 p.m., Nov. 18

Leslie Maasdorp, Vice President and Chief Financial Officer of the New Development Bank

While Not Perfect, China is Still a Climate Change Policy Leader

While it still faces major challenges in reducing its own climate change emissions, China has become a leader in climate policy and green finance development and has much to teach developing countries about curbing their CO2 emissions, said Maasdorp.

Speaking on a panel on the future of China’s energy structure, Maasdorp said the role of multilateral development banks such as his should not be to discourage developing countries from using coal, since it tends to dominate the energy mix in countries such as China and Mexico.

Nevertheless, multilateral development banks should try to steer countries toward the most sustainable forms of power generation, and have an important part to play in mitigating climate change as their perspective is long-term development, he said. In this regard, there are some overlaps with state-owned energy companies, which are driven by strategic as well as market considerations.

China has particular advantages in “cleaner” coal technology, with more efficient “supercritical” coal generators now account for 90% of coal plants in China, Maasdorp said. Developing countries could learn a lot from this, he said, adding that the U.S. has been relatively slow to develop cleaner coal power.

While the New Development Bank will not support new coal power generation, it will aid countries in converting their existing coal plants to "supercritical" status.

While more efficient in terms of generating power from coal consumption, critical and ultra-critical coal plants do not reduce the actual volume of carbon emitted for each ton of coal burned, Greenpeace reported last year.

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