China's 12th Five-Year Plan addresses new challenges and sets new goals in the country's power sector. The structure of power generation development is to be optimised to properly balance coal transportation and power transmission. The controversy over the direction of grid transmission and distribution is also to be reconciled. The Plan puts forward specific requirements for energy conservation, developing clean energy, optimising the production of coal-fired electricity, rationalising the allocation of peak power, developing distributed energy and constructing a strong smart grid. It also strongly advocates renewable and other forms of clean energy resources. Considering all the above goals and requirements, it is necessary for China to adjust its blueprint for electricity market development by fine-tuning the original market-oriented reform momentum. This paper aims to design a policy framework for this and discusses how China should develop policies and strategies to meet these requirements and achieve these goals. Examples of compatible international experiences illustrate how China can secure a sustainable energy future. (C) 2014 Elsevier Ltd. All rights reserved.