Energy saving and environmental protection are important conditions for the sustainable development of Chinese economy. However current widely used generation scheduling model based on predefined production quota and tariff results in heavy energy consumption and severe environment pollution. From 2007, as concerns over energy shortage and environmental pollution, the Chinese authorities introduced the implementation of energy-saving generation dispatching model, which is an important approach to facilitating energy-saving and reduction of pollutant emission. The objective of implementing energy-saving generation dispatching model is to prioritize the use of renewable energy resources and new power plants with high efficiency without compromising power system security and reliability. This paper analyzes the necessity and feasibility of implementing energy-efficient and environmentally friendly generation scheduling models in China. The institutional and technical barriers impeding the implementation of energy-saving generation dispatching model are identified. The development of advanced energy-saving generation scheduling models towards competitive market models and phased planning programs are emphasized in this paper. The effectiveness and experience of provinces piloted energy-saving generation dispatching projects are also discussed.