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As an important single source to carbon emissions, China's power industry should bear social responsibility for mitigating climate change. To explore what low-carbon development means for the industry, a novel approach that combines the extended multilevel LMDI model with Tapio algorithm was conducted to study the drivers of carbon emissions in the power industry and whether CO2 emissions from power output is out of sync with economic development, covering the period from 1996 to 2016. Our results come to the following:

1. Carbon emissions from electricity output are characterized by increases and volatility, with an average annual growth rate of 7.05%. The carbon emission factor of electricity, facilitating to compute CO2 data, shows a decline.

2. The positive driving factors are economic activity effect (169.53%), population scale effect (9.29%), fuel mix structure effect (0.41%), and electricity trade effect (1.05%); the negative driving factors are electricity intensity effect (-46.38%), power generation efficiency effect (-24.93%), and power generation structure effect (-8.97%).

3. Weak decoupling and expansive decoupling are the main status during the research period. The electricity intensity effect is the main force to promote the decoupling process.

4. The market-oriented reform in the power industry in 2003 has a significant effect. The generation-side competition mechanism successfully changes the historical developmental trend of the decoupling elastic index.