Smart Grid in China

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China is the world's largest consumer of electricity, and Chinese electricity demand rapidly increased during the first decade of the 21st century. It is expected to double over the next decade and triple by 2035. In 2010, 70 percent of China's electricity generation came from coal-fired power plants, but now the Chinese government is investing heavily in renewable energy technologies. Ultimately, China strives to dominate the clean energy technology market abroad. As of 2012, 17 percent of China's electricity generation comes from renewable sources, and their latest goal is to increase renewable energy to 9.5 percent of overall consumption by 2015. To implement China's new clean energy capacity into the national power grid requires power grid infrastructure upgrades and ultimately, a smart grid.[1]

Different from a conventional power grid, a smart grid is an interconnected system of information and communication technologies and electricity generation, transmission, distribution, and end-use technologies that maintains electricity delivery system reliability and stability. Additionally, smart grid technology allows consumers to manage their power usage and make choices for economically efficient products and services.

History of Smart Grid in China[edit]

Electricity production in China till 2005

The Chinese government has enacted a plan to develop smart grid technology. China's national utility, the State Grid Corporation of China (SGCC), announced plans to invest $250 billion in electric power infrastructure upgrades over the next five years, of which $45 billion is earmarked for smart grid technologies. Another $240 billion between 2016 and 2020 will be added to complete the smart grid project. Ultimately, the goal of the Chinese government is to build a strong national smart grid capable of transmitting power from conventional and renewable energy sources. It is expected that a smart grid would not only improve energy efficiency but also reduce carbon emissions.[2]

SGCC(State Grid Cooperation of China) Three Phases 5-year Plan of Smart Grid[edit]

2009–2010 –Phase 1 – Planning and Pilot Projects Phase[edit]

• Set technical and management standards

• Develop technology and equipment

• Set development plans and initiate pilot projects

• Specifically, in 2010, China plans to start construction on the “Two Vertical, Two Horizontal” plan and reach interregional transmission capability of 12.9 GW by the end of the year.

2011–2015- Phase 2 – Comprehensive Construction Phase[edit]

• Construct UHV grid and urban-rural distribution grid

• Construct smart grid operation/control and interactive service system

• Key technological breakthroughs and their applications

• By 2015, UHV and other intra-regional transmission capacity will be 240 GW. Distribution and power provision will reach a reliability rate of 99.915% or higher in the cities and 99.73% or higher in rural areas. Smart meters will be in widespread use and EV charging stations will have been deployed in numbers that will satisfy demand

2016–2020- Phase 3 – Leadership Phase[edit]

• Complete a strong, smart grid

• Become world leaders in management, technology and equipment

• By 2020, UHV and other intra-regional transmission capacity will reach 400 GW, enough to connect all planned coal, hydro, nuclear and wind power to areas with high demand

Smart Grid Functions[edit]


By changing the way electric power is generated, distributed and used electrical power, and digital communication and control, Smart Grid enhanced capability and made great improvements in energy efficiency, reducing the probability of power outage and detection of faults in the power grid system.

A modern Smart Grid needs to meet the regional requirement. According to the United States Department of Energy's Modern Grid Initiative report, a modern US Smart Grid must: Self-heals, Against attack, Provide clean energies for 21st century needs, Accommodates all generation and storage options, Enables markets, Optimize assets and operates efficiently.[3] Considering China’s actual situation, state grid corporation points out Chinese smart grid should be an ultra-high voltage power grid as the backbone, based on the strong smart at all levels of the coordinated development, utilizing advanced communicating, information technology, building a unified “strong smart grid” characterized by information, automated and interactive.[4] But no matter “which style” Smart Grid, functions here focus on the benefits or applications to which smart grid assets are engaged to improve cost effectiveness, reliability, and energy efficiency of the power system.[5] These can be summarized to three following main categories.

Enhanced Reliability[edit]

Power utilities require system reliability to meet a certain level in order to guarantee security. Unreliability problems in the power grid system can be explained by aging power infrastructure, increasing energy consumption and peak demand. Smart Grid chooses to use wireless technologies with constrained bandwidth to keep reliability. To provide system reliability, robustness and availability at the same time with appropriate installation costs will be the main goals for smart grid.[6]

Smart Grid enhances reliability in two fundamental ways

• Transmission wide-area control and visualization tools can prevent and limit blackouts by enhancing situational awareness and rapidly reconfigure the transmission grid to prevent or limit a blackout.

• Sometimes areas the vast bulk of outages occur in terms of aggregate customer- minutes without power are caused by events like vehicle accidents, wind and ice storms, and animals shorting out transformers, rather than systemic failures. Smart Grid use distribution and feeder automation assets to isolate faults immediately and then reconfigure distribution feeders through remotely actuated switches. So the recovery time can be decreased from several hours to several seconds.

Here are other requirements in structure and design Smart Grid need to meet to ensure its security and reliability. To avoid cyber-attacks, Smart grid develops an efficient security mechanism and resists attack by smart monitoring of power grids, which is the basis of control and management of smart grids to avoid or mitigate the system-wide disruptions. Compared with traditional monitoring which is based on weighted least square and prone to fail when gross errors (including topology errors, measurement errors or parameter errors), Smart Grid greatly enhance the reliability.[4]

Accommodation of energy generation and storage options[edit]

Through displacing the need for new generation, localizing this function to displace the need for new transmission, further localizing it to manage capacity to offset the need for new and upgraded distribution substations and feeders, and managing transformer loading to extend their lifetimes, Smart grid can better efficiently manages peak load capacity than existing ones.[6] The communications and metering technologies inform smart devices are used in the home and business when energy demand is high and track how much electricity is used and when it is used in order to reduce demand. Similarly utility companies therefore have the ability to reduce consumption by communicating to devices directly in order to prevent system overloads.[7]

High demand during the high cost peak usage periods is the main factor that in grid infrastructure cost. It must be adequate to serve peak load requirement and at the same time maintaining adequate reserves for forced outages and contingencies. But now with the global growing demand for generation, costs for new generation capacity to meet load growth are expected to grow substantially. Peak load management from demand response, distributed storage, and optimization of distribution delivery voltages and power factors can all serve to defer investment in generation, transmission, and distribution systems.

With the advantage to storage energy, Smart grid can decrease costs for wholesale operations by lowering the demand for generation when marginal production costs are greater than revenues from retail sales. Similarly minimizing purchases or maximize production when wholesale prices are high, and reducing transmission loads when and where congestion costs are high. This can be accomplished by utilizing demand response, distributed storage, and distribution voltage controls to reduce net demand.[6]

Motivate Consumer Participation[edit]

Potential Advantages for consumers:[8]

• Actively participate in energy conservation and to significantly reduce overall electricity usage.

• Enhanced monitoring and control as a tool to improve consumer’s own energy efficiency, it drives participation in programs such as time-of-day pricing that lowers costs for users while aiding load-balancing for utilities.

• Laying the groundwork for consumers to participate in peak-demand shut-down programs that provide pricing incentives to consumers who allow the Smart Grid to automatically curtail electricity usage by non-safety-critical in-home devices during spike demand situations.

So Smart Grid make a contribution in the energy industry by allowing small consumers like individual homes and small businesses to sell power to their neighbors or back to the grid. So to consumers, two-way and real-time communications available in a smart grid attract consumers that they can be compensated for efforts to save energy and to sell energy back to the grid through net-metering. It can be predicted Smart Grid may change consumers’ behavior around variable electric rates or participates in some pricing programs that designed to ensure reliable electrical service during high-demand conditions.

Many utilities currently promote small independent distributed generation and successfully integrate it with no impact. These sources of power are currently cost-effective with the help government subsidies that are available to help consumers purchase the often expensive equipment that is required.


Smart meters[edit]

Liander Smart Meter

During 2011 SGCC took bids for 44 million smart meter units. In total, 65 companies received bids for smart meters from SGCC. The total smart meter market in China is estimated to be 330 million smart meter units worth approximately $7.7 billion USD. By 2011, SGCC had deployed 45 million smart meter units. All SGCC users are expected to be equipped with smart meters by 2014.[9]

Top 10 Smart Meter Bid Winners in the First Four Biddings of SGCC, 2011[10][edit]

  1. Jiangsu Linyang Electronics Co., Ltd 6.48%
  2. Waision Group Holdings Limited 6.07%
  3. Shenzhen Clou Electronics Co., Ltd. 5.95%
  4. Nigbo Sanxing Electric Co., Ltd. 5.54%
  5. Holley Metering Limited 4.14%
  6. Ningxia LGG Instrument Co., Ltd. 3.89%
  7. Hangzhou Hexing Electrical Co., Ltd. 3.85%
  8. Shenzhen Haoningda Meters Co., Ltd. 3.70%
  9. Shenzhen Kaifa Technology Co., Ltd. 3.63%
  10. Shenzhen Techrise Electronics Co., Ltd. 3.12%

Battery Energy Storage Station[edit]

In December 2011 construction on battery energy storage station residing in Zhangbei, Hebei Province was completed by BYD and SGCC. The storage station is capable of storing 36 MWh of energy in a series of iron-phosphate batteries approximately the size of a football field. Designed to be implemented in conjunction with a 140 MW expansion of renewable energy (solar and wind), this project is worth over $500 million USD.[11][12]

Digital Substations[edit]

The first digital substation was built in China in 2006. By 2009 China had implemented more than 70 digital substations.[13] The implementation of digital substations is critical to the smart grid because of it allows for processing of energy generated from conventional and renewable sources, protects the grid from attack, and communicates with the rest of the grid.

Flexible Power Transmission[edit]

Flexible power transmission is important to the development and expansion of China's power grid due to the distance between energy resources and load. In order for flexible power transmission to be achieved by the Chinese smart grid, substantial infrastructure upgrades must be made to the existing power grid. This is primarily being done by upgrading the existing power grid to a system capable of transmitting ultra high voltage AC and ultra high voltage DC power. Over half of China's investment in flexible power transmission is in the form of static VAR compensators or SVCs. In 2009, SGCC announced its plan to invest approximately 88 billion dollars in ultra high voltage equipment.[13]

Electric Vehicle Charging Equipment[edit]

In August 2009 SGCC established its first commercially available electric vehicle charging station, the Caoxi Electrical Vehicle Charging Station. As of 2010, 76 electric vehicle charging stations have been build in 41 Chinese cities. Continued investment in electric car infrastructure reflects the country's goal of having 500,000 electric, hybrid and fuel-cell vehicles on the road by 2015 and 5 million by 2020,.[13][14]

Charging Stations by City as of 2010 [15]
City Charging Stations City Charging Stations
Shanghai 6 Changchung 1
Beijing 5 Hangzhou 1
Tianjin 5 Suzhou 1
Jinan 5 Wuxi 1
Nanjing 5 Xiamen 1
Dalian 4 Changsha 1
Hefei 4 Zhengzhou 1
Xi'an 4 Guangzhou 1
Harbin 3 Chongqing 1
Chengdu 3 Kunming 1
Nanchang 2 Lanzhou 1
Wuhan 2 Taiyuan 1
Shenzhen 2 Yinchuan 1

Deployment and Deployment Attempts[edit]

Pilot Programs[edit]

Currently China has an agreement with the US to deploy its first smart grid pilot project. Honeywell corporation was selected in 2011 to develop and implement the technology and expertise to improve energy use in commercial buildings. The project is part of a grant agreement between the State Grid Electric Power Research Institute (SGEPRI), a subsidiary of State Grid Corporation of China, and the US Trade and Development Agency. According to a [16] press release, "China's goals for a smarter electrical grid is to manage the growing electricity demand side and to enhance electrical infrastructure's reliability and efficiency by giving utility customers ways to better manage their electricity use and cost, increasing their energy efficiency and supporting the integration of renewable energy sources"[16] A better connection between residential and industrial electricity customers and grid operators needs technologies to measure day-to-day energy use and to broadcast when the energy use spikes and outpaces the ability to generate power. Implementation of this pilot project will give State Grid Corporation of China exposure to the latest technologies and perspective on how to realize the benefits of the smart grid. China is the World's largest Transmission and Distribution market with capital expenditures on power lines growing at an annual rate of 15 to 20 percent until 2018.[17] With this level of investment, US companies can test and commercialize technology in China at a faster and larger scale than in other parts of the World, including developed countries.

Upcoming Deployments[edit]

According to the Chinese authorities, a strong and robust smart grid market would total $20 billion annually by 2015. Rolling out Ultra-High Voltage (UHV) transmission systems would account for more than 60% of that market, while smart meters and wind power connectivity could reach $2 billion and $800 million annually respectively. According to State Grid Corporation of China, the period 2011-15 is going to be dedicated to the promotion of smart grid construction. 2011 has been devoted to pilot implementation, and in 2012 equipment market will raise.


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