The State Grid Corporation and the China Southern Power Grid Corporation
China today operates on two wide area synchronous grids: the State Grid in the North and China Southern Power Grid in the South. The grids are operated by two respectively named grid operating companies.
China’s electric power industry started at the end of the 19th century and developed rapidly, especially after the founding of the People’s Republic of China in 1949. The overall grid included AC/DC transmission systems with 500 kV, 330 kV, 220 kV AC lines, and ±500 kV DC lines. Initially, there were six regional grids and three independent provincial grids which were gradually integrated over time. The northern power grids have been synchronized in 2005 and since 2011 all provinces are interconnected. Today’s two regional grids are joined by HVDC back-to-back connections.
Prior to 1994, the electricity supply was managed by the provincial electric power bureaus. To improve the efficiency of the system, utilities today are managed by corporations outside of the government administration structure. While there is a plethora of power companies, thereof are five dominating big ones and several specialized ones such as the China Three Gorges Hydro Cooperations which operates the hydropower plant at the Three-Gorges dam.
According to the most recently available official figures from 2020 provided by the National Bureau of Statistics, thermal – or mainly coal-fired – power remains the biggest source of electricity:
|Output of Electricity(100 million kw.h)||77790.6|
|Production of Hydro Power Electricity(100 million kw.h)||13552.1|
|Production of Thermal Power Electricity(100 million kw.h)||53302.5|
|Production of Nuclear Power Electricity(100 million kw.h)||3662.5|
|Production of Wind Power Electricity(100 million kw.h)||4664.7|
|Imports of Electricity(100 million kw.h)||47.5|
A recent IEA report estimates China’s total electricity production for 2021 at 8,100 TWh, an annual increase of 8% from last year. While coal continues to dominate electricity generation with roughly 60%, China has seen the fastest expansion of alternative sources of electricity in recent years. Today, hydropower (17%) and wind power (6%) are making inroads. Electricity from solar PV and natural gas combined made up 3% in 2020, while nuclear power contributed 5%. The Chinese government has set targets for the share of non-hydro renewables of up to 25.9% in 2030 and 36.0% in 2035, expanding its total installed capacity of wind and solar power to over 1 200 GW by 2030.
China’s grid faces the gargantuan task of redistributing power generated in remote but resource-rich inland regions and instead needed in resource-poor, but densely populated, industrially and commercially active coastal regions. For example, hydropower resources proliferate in the Southwest; wind energy resources in the North, Northwest, and Northeast regions, while solar photovoltaic equipment is mainly situated in the Northwest, North, and East regions; and finally, nuclear power plants are mainly distributed in the southeastern coastal areas. Thus, coal remains the fuel of choice for thermal power, as it is an easily transportable, relatively cost-effective commodity, that can be turned into electricity at the site where the power is needed – mainly in coastal regions with high industrial and commercial activity.
In order to cope with the power transmission challenges, China’s government put forward its “Power Transmission from the West to the East” plan in 2005, which stipulated the development of a new 1000 kV UHVAC and ±800 kV UHVDC transmission system. These were expected to increase the power transfer capacity through three important transmission corridors, i.e., the north, mid, and south. With the ascent of renewable energy, this challenge has further increased as – unlike coal – hydro, wind or solar power needs to be transported through long-distance transmission lines from source to end consumer. To this end, China has been installing ultra-high voltage power lines in recent years. These lines transmit energy at 800,000 volts and above, double the voltage of conventional high-voltage lines, allowing them to transmit up to five times more electricity at minimal energy loss. The first UHV line came into operation in 2009 and the system has been expanded to a current network of 31 lines and another 7 lines in the planning over the next 5 years.
However, challenges remain with this technology as many lines are only running at 60% of their design capacity. Issues that hamper the use of the UHV transmission lines to full capacity are manifold: discrepancies in planning that lead to synchronization gaps between the completion of power source and transmission lines, discrepancies in engineering leading to design faults restricting the ability to feed electricity into the grid, as well as market-related issues resulting from different interests and perspectives between supply and demand parties (power generators, grid companies, and local governments) concerning prices, volumes, duration of contractual obligations, etc.
In addition, the amount of green electricity from renewable sources remains wanting as the current technology cannot handle the instability of load from renewable sources. It has to be bundled with other more stable sources, such as coal, to ensure the stability of the grid. A pure-green energy mix presents a risk in that its supply could suddenly drop.
Nevertheless, China’s decarbonization hopes rely on the electrification of the country’s operations – from transport to industrial production. In addition to improving the grid technology is on the government’s agenda. A new generation of UHV lines is expected to be better able to handle solar and wind variability, but such initial technology remains in development. Another technological solution could be the pairing of renewable power sources with storage, making the output less variable and thus more usable by UHV lines. Grid improvement to allow for better use of long-distance UHV transmission lines for the transportation of green electricity will need strong investment into better generation sources, storage capacity, and better market-based supply and demand adjustment.
Beyond improving the technological base of power generation and the grid to achieve China’s decarbonization goals, introducing market-based tools to regulate the use of fossil fuel-based electricity will play a crucial role. According to an EIA report, the secret to China’s decarbonization lies in the improvement of carbon pricing mechanisms and the nationwide ETS system which came into operation in 2021 and is the world’s largest ETS, covering its initial phase annual gas and coal-fired power sector emissions of around 4.5GtCO2. To this end, the EIA analyzed various models of ETS systems, concluding that integrated systems including – among others – all electricity generating technologies, carbon capture, utilization, and storage technologies, a shift from free allocations to auctioning of allowances, as well as a shift from intensity targets to a cap-and-trade target, would be best suited to support the decarbonization of China’s electrification efforts.
The National Energy Administration can be contacted via their Chinese website and email function: http://www.nea.gov.cn/hudong/mailbox/director/index.htm
Lerarn More Resources
https://iea.blob.core.windows.net/assets/9448bd6e-670e-4cfd-953c-32e822a80f77/AnenergysectorroadmaptocarbonneutralityinChina.pdf (last accessed Nov 29, 2022)
This Post was submitted by Climate Scorecard China Country Manager Annette Wiedenbach