Green dragon – China’s smart grid plan for sustainable power
China is currently in the midst of its 12th five-year plan for social and economic development, and a key theme of the current plan is sustainability and green growth. This green focus is being driven forward by China’s commitment to Smart Grid technology.
The five-year plan outlines China’s dedication to delivering on its smart grid and sustainable energy targets, including wide-ranging renewable energy and connection technology, energy storage technology, microgrids, smart meters, demand response technology and more. It is investing $250 billion dollars over five years in the country’s power grid, with $45 billion of that dedicated to smart grid.
why smart grid?
So what is a smart grid and why does China need one? ‘Smart grid’ is a next-generation utility delivery system, where utility companies use machine to machine (M2M) technology and two-way communications to deliver energy more efficiently and cost-effectively.
The smart grid extends to the home, where consumers can use smart meters to monitor energy usage and make adjustments accordingly, offering the twin benefits of cost savings and a positive environmental impact. Every device connected to the smart grid gathers data and feeds it back to automated systems within the grid, letting the ‘smart’ technology make decisions and control individual devices all from one central location.
The ‘why’ is because China needs the sustainability and reliability that smart grid can deliver to meet its economic and social growth goals. The Chinese smart grid must deliver reliable power to the most populous nation on earth, wherever and whenever users require it. It must also be secure, able to resist physical or cyber-attacks while remaining robust in the face of any natural disasters.
Of course the grid must also be economically viable and efficient, delivering optimized power supplies at fair prices, and it must help achieve China’s stated renewable energy goals. Power providers can monitor and record levels of power utilized by consumers, allowing them to perform pre-emptive maintenance as and where required, helping keep the power grid efficient and reliable.
big market, ambitious targets
China has pledged to build between 20 and 30 special smart grid demonstration projects, between five and 10 smart grid demonstration cities and 50 smart grid demonstration parks under the remit of the current five-year plan. The year 2011 saw the State Grid Corporation of China (SGCC) deploy more than 51 million smart meters, with a further 37 million due to be rolled out by the end of 2012. The five-year plan commits SGCC to having 300 million smart meters in place by 2015.
The total value of China’s smart grid marketplace is estimated to be worth more than $61 billion by the end of 2015, equating to an annual growth rate of around 29 per cent over the preceding five years.
investing heavily in smart technologies
The growth of China’s smart technology project and market is truly impressive. Recent research calculated that of the 78.3 million power meters acquired by SGCC in 2012, 76 million of them were smart systems. It is estimated that 2013 will see this figure increase further still, with China acquiring 107.7 million smart meters this year as its meter market continues at a CAGR of around 9.5 per cent.
To deliver on the sustainable energy vision of the Chinese government, the two main power suppliers have committed vast financial resources to the project. In 2012 SGCC invested around $50 billion in its power grid, while China Southern Power Grid (CSG) poured over $15 billion into its own smart grid infrastructure. The investments have been targeted at two main areas, power transmission (incorporating Ultra High Voltage initiatives) and upgrading the power grids to deliver reliable, affordable energy to remote and rural areas.
where to from here?
China’s main energy providers, including SGCC and CSG, are now engaged with many different domestic and international companies, developing projects to help take the smart grid initiative forward further still. Current smart activities include ground-level automated distribution, wider-ranging deployments of smart meters and even plug-in vehicles; the Chinese government’s current five-year plan includes a commitment to getting more than 5 million electric vehicles on the road by 2020. The smart city pilot initiatives will encompass millions of citizens.
With the world’s smart grid market projected to be worth over $400 billion by 2020, China is well-placed to take advantage; China will be the biggest smart grid market on the planet by then, with a 24 per cent share, and SGCC, the world’s biggest utility company providing to over a billion customers in China alone, has put in place a Smart Grid Technical Standards System to help roadmap the country’s smart grid future.
- Find out more about Orange M2M, smart grid and metering projects online.
- Find out more about the work that Orange is doing in high-growth markets worldwide.