Energy & Resources

The Great Grid of China

The Great Wall, the Grand Canal and now a multi-billion dollar ‘smart’ grid

Power breakfast

Communism is Soviet power plus electrification of the whole country,” declared Lenin in 1920. It’s not clear if he was speaking literally or metaphorically.

But the Chinese government now has some electric choices of its own to make after last week’s snowstorms exposed the fragility of the country’s antiquated grid.

The snow left much of the north and east in disarray. Some power stations came close to running out of coal and electricity had to be rationed so people wouldn’t freeze to death.

That meant cutting power to factories. “Even under extreme circumstances, we will ensure residential electricity supply,” promised Shanghai grid spokesperson Wang Changxing.

The current grid network is in bad shape. It is poorly connected and struggles to cope with peak periods of demand. The government doesn’t want to have to shutter factories or ice-block its citizens. So it plans to build a modern “smart grid” by 2020.

Other countries are also upgrading. US president Barack Obama recently announced plans to invest billions in building an American smart grid. Something similar in China involves technology that reads how people use energy, as well as “ultra high voltage” (UHV) cabling to make sure it is transported to users more efficiently. It should also help China meet the carbon emission targets it set before the recent Copenhagen conference.

New “smart meters” allow both consumers and the utility firms to know when and where electricity is in use. Consumers can then be motivated to reduce their power consumption or shift it to off-peak times. Utilities also get a better idea of how much electricity to supply.

UHV cables comprise the largest component of the grid investment. “There must first be a strong grid,” explains China State Grid Corporation President Liu Zhenya. So the country reportedly has 139 UHV related patents on file, and China State Grid Corp, the world’s largest utility, is planning to invest $88 billion in UHV transmission cables by 2020 (see WiC3). The cornerstone of their plan is the building of three “west-east” cross-country power corridors.

The cables are also necessary to make renewable power work in China, since the country’s solar and wind farms are just too far from the industrial centres. “Renewable energy power in the country’s resource-rich, under-developed northwestern region must be sent to the resource-scarce, prosperous coastal area,” says the National Development and Reform Commission’s Renewable Energy Development Centre director, Wang Zhongying. China aims to generate 15% of its power from renewables by 2020.

The improved cables are also a prerequisite for the country to shift to hybrid and electric cars. Demand for power will soar beyond the grid’s current capacity if new car owners need to plug in their vehicles to charge them, rather than fill them up with petrol.

The plan is a bonanza for foreign and domestic suppliers. “Power equipment industry and intelligent electric meter makers will be among the largest beneficiaries,” predicts China Merchants Securities analyst Wang Peng.

The smart grid is an ambitious undertaking and some experts worry that the nation’s electric companies aren’t up to it. The electricity monopoly was broken up into several entities in 2002, making a unified UHV network harder to operate. “Such a large project should not be led by the enterprises,” warns China State Grid’s planning director Jiang Shaojun.

Estimates of the cost to get the new grid up-and-running vary widely too (anything from $60 billion to ten times that, depending on the media source). Xinhua is reporting that at least $30 billion will be spent this year. As China Energy Network CEO Han Xiaoping recently told the National Business Daily, “money” is still the grid’s biggest problem.


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