With the rapid development of its national economy, China has become a major producer and consumer of energy. To guarantee the sustainable development of power industry and national economy, China should exploit fossil and renewable energy efficiently according to the development situation of generation resources. Firstly, this paper analyzes the utilization status of main generation resources in China, such as coal, hydropower and wind energy. Secondly, this paper illustrates the STEP model, which analyzes some issues for China’s generation resource utilization from political, economic, social and technological aspects. For example, the resource distribution is inconsistent with electricity demand, the renewable energy power output is intermittent, and there is some disruption in coal mining. Finally, combined with the utilization status and issues, this paper presents some improvement approaches from the perspectives of cost, efficiency and external influence.