Microgrids in China?
Quick take: Whenever a technology is slow to develop in North America, proponents often look to China for faster growth. But microgrid supporters looking to China for easy expansion may be disappointed, according to SGT Research, a Chinese market research and advisory firm. â€“ Jesse Berst
"In China, high hopes have been placed in the microgrid," said analysts Lihui Xu and Jochen Alleyne in their latest research insight. "However, the reality is that the development of the microgrid is struggling because Chinaâ€™s distributed generation is still in its infancy."
On the plus side, there are many microgrid demonstration projects in place or under construction along with numerous microgrid companies. For instance, the Chinese National Energy Administrator (NEA) plans to build 30 microgrid projects during the period of the 12th Five-Year Plan. In addition, NEA will also release standards and regulations for distributed generation and microgrids in the near future, which could help promote the concept. The Chinese see microgrids as a way to buffer the impact of renewable generation on the main grid.
On the downside, this emerging market has already sunk "into China's unique policy shackles," warns the report. One challenge is opposition from China's uber-powerful State Grid Corporation. "The microgrid is a sensitive topic in the industry in China," the report explained. "A person from the State Grid exposed that microgrid, on one hand, adds instability to the power network, on the other hand, the distributed generation will reduce utilityâ€™s electricity sales and then affects the interests of the State Grid."