China's top economic planner, the National Development and Reform Commission, announced on Wednesday it would improve the country's on-grid hydropower pricing mechanism to boost investment in the sector for sustainable development.

Announcement of the new policy, which has not been clearly defined yet, implies the government might raise the generator's prices of hydropower.

The NDRC said it would consider both the average cost of networks for electricity and the generation cost of hydropower plants.

In the past, local governments owned the rights to hydropower pricing. Hydropower prices are usually lower than on-grid electricity generated by other traditional forms.

According to the National Energy Administration, China added 29 gigawatts of hydropower generation capacity last year, to a total of 278 gW.