China should accelerate construction of an extra-high-voltage transmission line to deliver power generated by new energy, according to a senior official.

"The so-called overcapacity problem of China's new-energy industry does not refer to energy, but the equipment for new-energy production," said Zhang Guobao, former director of the National Energy Administration under the National Development and Reform Commission, during an interview with Xinhua News Agency.

He said domestic new-energy equipment manufacturing companies have met difficulties in exporting their products, which has resulted in overcapacity in the domestic market, but China's new-energy operators are "doing fine".

"China's new-energy industry is highly market-oriented with a significant number of private companies, which make decisions based on their abilities to take risks," he said. "The government is considering calling off some governmental approval processes to help companies reduce costs."

In the past year, non-fossil power generation output reached 1.07 trillion kWh, accounting for 21.4 percent of the country's total. The major contributor is still hydropower, which reached 800 billion kWh, Zhang said.

Although wind power has developed rapidly in China, with total output reaching 100.4 billion kWh in the past year, it still comprises only 2 percent of the country's total output.

In recent years, many power groups have built wind farms and produced wind turbines. However, the use of wind farms is low due to sluggish construction of electricity transmission lines.

China's northern areas are rich in wind resources, and wind power generation accounts for up to 20 percent of power consumption in some regions.

However, because of the shortage of transmission lines, a huge amount of wind power cannot be delivered to other provinces, resulting in a severe waste of wind power.

Zhang said China wasted about 20 billion kWh of power in 2012.

He suggests the government accelerate approval for an extra-high-voltage transmission line connecting Xilinhot in the Inner Mongolia autonomous region to Nanjing in Jiangsu province, a large power consumer in China, and for another line to deliver power from Jiuquan in Gansu to the rest of the country.

Hydropower is facing a similar overcapacity problem, with 10 hydropower stations in southern China going to start production in June.

Liu Zhenya, general manager of State Grid Corp of China, the world's largest utility by revenue, told an industrial conference in April the company will invest more than 3 trillion yuan ($480 billion) in the next eight years to build safe and effective national grids and accelerate building of extra-high-voltage transmission lines.