Legislation and institutions are two important components of energy development. To better understand and improve energy development in China, a comprehensive examination of its energy legislation and institutions is essential. This paper highlights the major challenges confronting energy legislation and institutional approaches; as well, it explores possible alternatives in relation to future energy development in China. The paper concludes that shortcomings vis-a-vis structure, content, auxiliary legal documents, and clarity are the main barriers obstructing the efficacy of China's energy law systems. Lack of a unified national energy administration and the ineffectiveness of the country's energy institutions could prove major institutional hindrances to China's energy sector development. In future, the following legislative and institutional approaches should be adopted: (1) formulation of the basic energy law and specific laws should proceed without further delay; (2) the development of auxiliary legal documents should proceed without delay; (3) improving the effectiveness of energy legislation should proceed without delay; (4) setting up a unified national energy administration; and (5) enhancing institutional development. (C) 2009 Elsevier Ltd. All rights reserved.