China smart grid playbook: Should we steal a page or two?
By: SGN Staff
Editorâ€™s note: This is the first in a series of Smart Grid News playbooks focused on smart grid development around the world.
By Liz Enbysk
SGN Managing Editor
Just how big is the China smart grid market? Research firm Zpryme predicts its value will grow from $22.3 billion in 2011 to a whopping $61.4 billion in 2015, with the biggest chunk of that in transmission and distribution. But China is also topping the charts in renewable energy, particularly wind. And a new study financed by the World Bank has China emerging as an important test bed for electrical vehicle innovation. Smart meters? One report we saw suggests Chinaâ€™s installed base of smart meters could reach a quarter of a billion by 2020.
But China leads in other ways too:
With its population of 1.3 billion and its energy-guzzling manufacturing industry, China now consumes more energy than any other nation, accounting for more than a fifth of the world's energy-related greenhouse gas emissions. â€“ New York Times
So no surprise that Chinaâ€™s seemingly insatiable demand for power combined with a smart-grid-on-steroids profile has attracted the interest from the investor and vendor communities. In just the last couple of months weâ€™ve told you that:
Â· Accel Partners, a VC firm behind investments like Facebook and Groupon, plans to raise $1 billion for two China funds, one for early-stage investments and the other for later-stage opportunities.
Â· Honeywell will develop and implement China's first demand response pilot and feasibility study for managing energy use in commercial buildings.
Â· Duke Energy and China-based ENN Group will work jointly to develop the technologies needed to build smart cities in China and the U.S.
Â· State Grid Corporation of China, the Chinese Academy of Science and GE will work together to develop standards for Chinaâ€™s monster smart grid rollout.
And thatâ€™s just a drop in the bucket. Name a major player in the smart grid space and chances are they have a presence in China or will soon.
China smart grid projects at a glance
Hereâ€™s a look at a few of the smart grid related initiatives currently under way in China.
Transmission upgrades. A Duke University smart grid research report excerpted on SGN earlier this week noted Chinaâ€™s innovative technologies, particularly in high-voltage transmission. In February, State Grid Corporation of Chinaâ€™s Ningdong-Shandong 660 kV HVDC connection was inaugurated â€“ the first 660 kV direct current power transmission link in the world, according to Alstom Grid, which partnered on the project. Just recently Alstom Grid opened an R&D and testing center in Shanghai to further Ultra High Voltage Alternating Current (UHVAC) and Ultra High Voltage Direct Current (UHVDC) transmission equipment and energy management solutions. The company wants to help China move to the highest voltages, 1,200kV in alternating current and 1,100kV in direct current, by 2020 which is the completion target for three major transmission lines, each with 20 GW of transmission capacity.
Wind power development. The transmission upgrades described above canâ€™t come soon enough for Chinaâ€™s wind industry. Its ranking as world leader in wind power generation has a downside, which is not enough transmission capacity to handle it. A report by the State Electricity Regulatory Commission indicates more than half of the electricity generated by wind farms in China last year ended up unused.
State Grid is trying to reduce the bottleneck with transmission upgrades, hoping by 2015 to have the infrastructure in place to accommodate the growth in wind power and pull in more solar and hydro power as well.
80 million smart meters. Chinaâ€™s Twelfth Five Year Plan calls for 80 million smart meters in homes by 2015 and smart metering across the commercial/industrial sector as well. A GCiS China Strategic Research study notes that factoring in replacement purchases, the installed base could be over a quarter of a billion smart meters by 2020. However, both financial and production pressures to meet that kind of intense growth are leading to concern that meter accuracy and lifespan may be compromised.
TianjinEco-City. With Chinaâ€™s rapid urbanization and the governmentâ€™s desire to reduce carbon emissions thereâ€™s a push to build better cities. Tianjin Eco-City, roughly 150 kilometers away from Beijing, is an attempt to develop a perfect city from scratch. The goal is to make it the greenest metropolis in existence, according to the Financial Post, and it will be powered by Chinaâ€™s first smart grid, getting about 20% of its energy from renewable sources if everything goes according to plan. The first wave of people is expected to move into the city later this year, although it could be 10 to 15 years before the eco-city is fully developed.
Ten Cities, Thousand Vehicles. In 2009 China launched a program to promote electric vehicle development. What started with 10 cities has spread to 25 across the mainland. The Chinese government recently upped the ante with a $15 billion investment. However, according to the World Bank report prepared by management consulting firm PRTM, Chinaâ€™s EV focus so far has been on fleet vehicles like buses and taxis and thereâ€™s much work to do to develop a charging infrastructure to accommodate private cars.
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