China lays foundations for a fully modern smart grid
September 21, 2011
China, despite unprecedented growth of the economy and challenges in expanding infrastructure fast enough, has laid foundations to a fully modern smart grid. It provides an example of how to leapfrog into the future.
China’s economy has grown more than 10% per year for the past 4 years. To meet this demand, China has maintained an average electricity generation growth rate of 10.6% per year since 1949. Yet China’s energy use per capita is still only about one-twelfth of American use. In other words, there is plenty of growth ahead. Tens of millions of Chinese, especially the rural poor, still use traditional wood stoves to heat and cook.
Asia’s spending on smart grids is expected to outpace the United States, with China alone investing $7.32 billion in the sector in 2010. China is predicted to be one of the hottest smart grid markets in the coming years given its energy needs are expected to double in 10 years, and the country’s dominant power distribution company, State Grid Corp., has a goal of building out a smart grid by 2020.
In fact, China has been specifically identified as a country that it is pursuing smart grids as aggressively, or more aggressively, than any other country in the world right now, and is expected to follow the United States with a market share of 11.6% ($355 million). In 2015, China is projected to account for 18.2% ($2.76 billion) of the global household smart appliance market. China alone could spend over $100 billion upgrading its power distribution over the next 10 years.
Despite this aggressive activity in China, within the Asian Pacific region Japan and South Korea, which actually are a step ahead of China in the building of intelligent power distribution networks, are also ramping up smart grid investments. Both are ear-marking spending of more than $800 million for 2010.
As in the United States, regulatory mandates requiring utilities to constantly upgrade their grids are a factor in the Asian smart grid market. Currently, Singapore, South Korea, and Japan have announced major packages to stimulate smart grid development.
China has been rigorously investing in smart meters and will replace 300 million electricity meters over the next five years. The Chinese government has been increasing investment into smart grid technology to prepare for national energy needs that are expected to double in ten years. So far, only Australia has made it mandatory for utilities to install smart meters, but as the case for smart grids gets stronger, other countries in the region are expected to follow suit
US companies are flocking to China to try to get ready for the funds, much in the same way Korean and Japanese firms are stepping into the US market. General Electric is to partner with the City of Yangzhou, China, to build a smart grid “demonstration centre” in the city of 4 million. IBM has signed an agreement with ENN Group, a Chinese energy provider, to form a joint venture focused on “intelligent energy,” and IBM expects to generate a minimum of $400 million in smart grid revenues in China over the next four years. Hewlett-Packard, Cisco and Accenture, along with meter manufacturer Itron are all also developing smart grid-related business in China.
For at least the next two decades, it is likely that China will be at the forefront of grid growth and modernisation.
The World Smart Grid Series 2011 – China Focus, 8-10 November 2011, Beijing China will bring insights and thoughts from multiple stakeholders including power utilities, state-of-art technology providers, leading consulting companies, investment banks, international medias, government and standard regulators regarding China’s market of intelligent grid in the future. World Smart Grid Series 2011 – China Focus will focus on the latest development of strong smart grid in China, including long-distance UHV system, efficient grid operation, integration of renewable energy, energy storage, AMI , ICT, EV charging infrastructure, eco-city and etc. Moreover, this conference also highlights U.S., Europe, and other emerging markets. For more information see: http://www.worldsmartgridcongress.com/index.asp
