Answer: Ring-fencing in the electricity sector is a regulatory framework that requires a network service provider to separate its regulated business activities (e.g., operating the monopoly transmission network) from its competitive business activities (e.g., providing other commercial services like equipment installation or maintenance).

The primary purpose of ring-fencing is to:

• Prevent cross-subsidization: It stops a company from using revenue from its regulated, monopoly business to unfairly subsidize its competitive services, which would create an unlevel playing field.

• Ensure non-discriminatory behavior: It guarantees that the network service provider treats all competitors—including its own related businesses—fairly and equally when providing access to essential network information or services.

• Promote competition: By fostering a fair and competitive market, ring-fencing encourages other businesses to enter the market for services like connection work, which can lead to innovation, efficiency, and better outcomes for consumers.

Our company, Ningbo Changshi, supplies the essential overhead transmission line equipment and underground cable laying equipment that are used by all parties—both the network service providers and their competitors—in the competitive electricity services market. These guidelines directly contribute to the growth and fairness of the markets we serve.