Wednesday, November 2, 2016

China Seeks to Export Power Amid Signs It Built Too Many Plants


China is seeking to build up export markets for its power amid signs the nation has invested too much in new generation plants.
State Grid Corp. of China, which runs the majority of the nation’s electricity distribution network, is considering how to build links to India, South Korea, Japan and Southeast Asia, a move that would require billions of dollars of investment in long-distance, high-voltage power lines.
Interconnections would allow grid managers throughout the region to more flexibility use variable supplies coming from wind and solar farms cropping up from Vietnam to Mongolia. For China, the links would provide customers for power from hundreds of power plants finished in the past few years as demand in its domestic market stagnates.
“We can export to India and Southeast Asia where the power supply is inadequate,” Zhang Qiping, chief engineer of State Grid, said Tuesday at a conference hosted by Bloomberg New Energy Finance in Shanghai. 

China, which is the world’s biggest investor in fossil-fuel generation, started more than 70 gigawatts of new coal projects last year and had 200 gigawatts under construction at the end of April, the Paris-based International Energy Agency said in September. At the same time, most plants are sitting idle more than half the time, and low-carbon sources of electricity including nuclear and renewables are covering additional demand.

That report added weight to concerns voiced by environmental groups such as Greenpeace that China is apt to waste 1 trillion yuan ($148 billion) on excess power capacity by 2020.
Source: International Energy Agency
Source: International Energy Agency
At the BNEF conference in Shanghai, energy policymakers from China, Thailand and Mongolia spoke about the merits of building a regional network of power interconnections, which would help reduce the cost of electricity and make grids more flexible in dealing with renewables. The issue is biggest for China, which has the largest power network in the region.
"Asia will be an important part in the global energy interconnection," Wang Min, vice general manager at State Grid, said at the BNEF meeting. The region, he said, "has the biggest potential in energy economic growth and is a region with the most and fast-growing energy demand."

Shift Indicated

The remarks at the BNEF conference are the fullest indication yet that the bid for interconnections has backing from the Chinese government. Wang said the effort fits with President Xi Jinping’s effort launched in September 2015 to reduce pollution in China’s power utility industry, part of the nation’s commitment with the U.S. to hold back greenhouse gases damaging the climate.
“The economy is in a sluggish status,” Sun Jichang, deputy secretary-general for enterprise management association at State Grid, said. “The economic growth rate is slowing down, and that’s directly affecting electricity.”
Regional interconnections will help each nation achieve targets to cap carbon emissions under the United Nations climate deal agreed in Paris last year, said Yao Qiang, vice general manager of Power Construction Corp. of China Ltd. The effort to replace fossil fuels with renewables is an "unstoppable trend," he said.
Signals pointing toward the priority that China places on inter-connectors emerged in March. Then, State Grid joined Tokyo-based wireless carrier SoftBank Group Corp., Korea Electric Power Corp. and Russian grid company Rosseti Pjsc in agreeing to research and plan for interconnected power grids in Northeast Asia as part of a plan dubbed “Asia Super Grid.”
State Grid’s Wang has also proposed an ultra-high-voltage global power network to transmit electricity from country to country and continent to continent, with costs estimated at $50 trillion to develop by 2050.

Other Steps

There’s indications that more nations in the region are sympathetic to China’s effort program.
  • Thailand is working with the Asian Development Bank on projects to diversify its energy sources “not only the source of the fuel but also the origin,” Twarath Sutabutr, director general of the country’s office for energy policy and planning, said at the BNEF event. “Interconnections can provide markets for gas deposits trapped” in places like Myanmar.
  • Pakistan has agreed with China to work on joint infrastructure projects and expects its larger neighbor to provide half of the $1 billion it’s seeking for clean energy, Syed Aqeel Hussain Jafri, director of policy at Pakistan’s Alternative Energy Development Board, said in January.
  • The ultra-high voltage line “is the best option to supply electricity to the region," said Demchigjav Chimeddorj, director of the strategy planning division at the Energy Department of Mongolia. Dialogue is needed among research institutes, government officials and policy makers to discuss energy interconnection, he said.
“There are lots of engineering challenges,” Michael Liebreich, founder of Bloomberg New Energy Finance, said on a panel discussion about the issue at the event in Shanghai. "The longer distance you’re moving the power, the more exposed to interruption and catastrophic implications. These are issues that need to be addressed,"
For China, interconnections would combine smart grids, ultra-high voltage and clean energy, said Wang Yimin, who is currently the secretary general of the Global Energy Interconnection Development & Cooperation Organization. Created in March, Wang’s organization is designed to promote links throughout the region.
"It’s doable in technology," said Wang, adding current ultra-high voltage lines can transmit as much as 15 gigawatts of power through 5,000 kilometers.
The organization is planning to draft a plan by the end of this year for transmitting power from East China to South Korea and then to Japan, Wang said.

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