In order to enhance the“Energy Saving and Reduction of Pollution” policy of China， the State Council of China promulgated the“Generation Dispatch for Energy Saving Act” in August 2007. By this act the cleanest energy resources should be dispatched according to a priority order， and ordinary coal-fired thermal power plants should operate by equal incremental cost method. In this paper it is analyzed that how to coordinate the“Generation Dispatch for Energy Saving Policy” with the electricity market reform in China in order that both the goals of saving energy and electricity market reform of China can be achieved. And many problems are also discussed， such as day-ahead generation schedule considering energy saving; clearing of energy price and compensation; yearly， seasonally and weekly generation schedules; balancing market; comparison of energy saving dispatch electricity market with ordinary electricity markets; et al.