Observations on smart grid development in China


By Michael Ding

With the increasing prominence of climate change, pressure on fossil energy and environmental degradation, the “smart grid” has emerged as a new sustainable development pathway for the electricity industry and has been acknowledged as such worldwide. The Chinese electricity industry is also actively exploring a smart grid implementation path that is suited to its unique characteristics.

China faces its own unique issues in the smart grid development process that differ from those in the United States and Europe: 

  • China is still undergoing rapid economic development. Thus, the greatest challenge for the electricity industry is meeting the rapidly growing electricity demand that accompanies this growth. The exceptional speed of power network growth puts great pressure on grid construction, operations and reliability.
  • China covers a vast area but its primary energy resources are not evenly distributed. The majority of large scale usable primary energy resources, including renewable power sources such as wind and solar, are located in west and north China whereas the major load centres are located in the eastern and southeastern coastal regions. The large scale delivery of energy imposes additional reliability and security requirements on the transmission network.
  • China’s renewable energy development approach is focused on centralised, large scale exploitation. The impact of the input of massive renewable generation capacity on the safe operation of the network should not be underestimated.
  • Different areas of China are at different levels of economic development. The economically developed southeastern regions contrast with the relatively underdeveloped central and western regions, urban areas with rural areas, and large cities with small towns. The smart grid implementation direction and short term implementation priorities will clearly differ by area.
  • Industrial and commercial use currently accounts for the majority of electricity consumption. Residential use is relatively small in volume principally fulfilling the essential needs of daily subsidence, pricing mechanisms are imperfect and there are no incentives for user-based demand side management.

Faced with these unique challenges, the primary focus of China’s smart grid development is on renewable and grid side. Constructing a safe and reliable transmission network, supporting large scale renewable generation integration, raising the standard of dispatch management and achieving long distance high capacity power transmission is an essential requirement for maintaining China’s economic development, ensuring energy security and meeting efficiency and emissions objectives.

Key tasks in the construction of the transmission smart grid include the integration of renewable generation, operational control and output prediction, online monitoring of key transmission corridors and key substations, and cross-regional interconnected ultra high voltage (UHV) network dispatch management.

China’s power industry has accumulated deep technological experience in transmission construction and operation with leading international technical capabilities and operational experience in many areas, including UHV networks, wide area network monitoring and dispatch automation, all of which provide a strong foundation for the implementation of the transmission smart grid.

It is very clear that the implementation of the transmission smart grid must manage two key issues. Firstly, the development plan for the smart grid must be compatible with the national renewable energy development plan. Secondly, as the vast majority of China’s electricity network equipment is far from reaching the limit of its projected useful life, the optimal timing of intelligent upgrades must be carefully considered.

Imbalanced economic development between urban and rural areas has led to a long term disparity in distribution network development. In rural areas the focus is on improving the level of electrification, eliminating power supply blind spots and reducing cost to serve. In cities the focus is on improving power quality and reliability and reducing outages. Consequently, in future China will focus on cities, developed cities in particular, for the launch of distribution smart grid implementation. Key areas include distribution automation, GIS, power quality monitoring and control, large scale storage and electric vehicle connection facilities. However, due to limited policy support, there is uncertainty regarding the deployment and application of distributed generation and electric vehicle connection facilities.

On the demand side China will focus on the deployment of advanced metering infrastructure (AMI), demand side management, smart homes and smart communities. Due to the above noted manner in which China differs from the US and Europe in electricity consumption models, electricity pricing models and environmental awareness, the short term focus of AMI and demand side management deployment in China will be on the industrial and commercial sectors, where they will help change the existing consumption model to improve resource efficiency and reduce costs. The continued mass deployment of AMR for residential users will improve meter reading automation, improve reading accuracy, and improve efficiency and standard of service. In addition, some key cities will combine this with smart home and smart community pilot implementations and residential AMI deployment.