China eyes export opportunities for global super grid

Source: By Kathy Chen and David Stanway, Reuters • Posted: Friday, April 1, 2016

China’s biggest power transmission company has signed deals with three Asia-Pacific investors to help push its ambition to build a cross-border energy super grid that will help combat climate change, integrate renewable energy sources and boost exports.

The State Grid Corp of China has been urging authorities to give the go-ahead for more cross-country ultra-high voltage (UHV) power lines to connect coal and hydropower plants in China’s remote west to the energy-hungry eastern coast.

The State Grid, which spent 470 billion yuan ($73 billion) on the construction of domestic grid infrastructure last year, signed agreements with the Korea Electric Power Corporation , Japan’s Softbank Group and the Russian power firm Rosseti on Wednesday.

The deals are designed to facilitate power trade across Asia by around 2030 and pave the way for transcontinental or “global” grid interconnections by 2050, including to Europe.

Power demand in Asia Pacific countries is expected to double by 2035, and regional energy supply cooperation could reduce costs by 20 percent from 2005 to 2025, or $200 billion, according to the State Grid.

China has already built seven UHV lines stretching thousands of kilometres across the country, connecting hydropower plants in the southwest and coal-fired power in the northwest to the industrialized eastern coast. The lines also aid the integration of intermittent wind and solar energy sources.

China has been competing with international equipment providers such as ABB and Siemens in exporting grid technologies like the core components of direct current UHV lines and smart distribution solutions.

The State Grid won the tender to build Brazil’s largest power transmission line last year, and it has also expressed interest in buying a stake in Australian electricity distributor Ausgrid.

“Our previous investment in Australia has been successful. We will bid for more projects, and it will bring Australia more tax income and job opportunities,” said Liu Zhenya, State Grid’s chairman.

Liu said his company was looking at linking China’s energy-rich Xinjiang region with Germany as well.

“China has the technical capacity to increase the voltage to 1500 kilovolts, so that it can transport power 8,000 kilometres away. And it is financially viable to expand,” he said.

The plan, if brought to fruition, could increase exports of Chinese-designed electricity technology. The State Grid estimates total investment could reach $50 trillion by the time the network is put in place in 2050.

Fatih Birol, executive director of the International Energy Agency, estimated that 40 percent of the transmission lines currently in operation globally would need to be phased out and replaced by more technologically advanced grids. ($1 = 6.4668 Chinese yuan) (Reporting by Kathy Chen and David Stanway; Editing by Tom Hogue)