BEIJING (AP) - China needs to overhaul its huge power industry and raise prices to discourage wasteful consumption that is adding to already severe pollution, the Paris-based International Energy Agency says.
''Too much electricity is wasted by consumers and by networks, so too many power plants are being built to meet this demand,'' said Claude Mandil, executive director of the IEA, in comments on its Web site. ''Too much fuel is wasted by generating power and too much pollution is released as a result.''
Mandil made his comments Monday as the IEA, an arm of the Organization for Economic Cooperation and Development, released a report that calls for sweeping change in China's state-dominated power industry.
The report calls for China to create a competitive electricity market, with prices reflecting the true cost of resources in order to encourage conservation.
Soaring demands from China's booming economy have made this the world's No. 2 power consumer after the United States.
One of Beijing's key goals should be ''tackling the environmental consequences'' of coal, which supplies 70 percent of China's power, the IEA report said.
The Chinese government plans to build dozens of power plants in coming years to meeting surging demand.
China is adding generating capacity every year that is equal to the total in France or Canada, according to the IEA.
The country has begun to separate power generators from transmission systems and to experiment with a wholesale market, the report says.
But it says Beijing also needs to create a more stable regulatory framework to attract investment, appoint an independent system operator and build more distribution networks.
It says China could encourage its power companies to build cleaner generating plants by imposing higher fees for pollution.
''Steps can also be taken quickly to make power prices more reflective of actual costs _ sending strong signals to investors to choose more efficient equipment and fuels, and to consumers to use electricity more wisely,'' the IEA said on its Web site.