The German Energy Agency (DENA), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the China National Renewable Energy Center (CNREC) have served up a detailed assessment of the Chinese electricity grid and the challenges Beijing faces in planning its development to reduce system costs, cut carbon emissions and more effectively integrate renewables while minimizing power losses.
DENA dubbed China’s power supply and demand situation “adequate”, noting the grid reached 100% nationwide electricity access in 2015. The report also acknowledged the complexity of designing the country’s power system while pointing to continuous improvements the Chinese government has made to its approach to long term planning.
But as policymakers increasingly focus on subsidy free solar they will need to continue to refine their approach to grid development and long term planning. With that in mind, DENA argued an advanced, multi-criteria approach to grid planning – based on the results of scenario modelling – could help the country address the challenges ahead.
“The results of the modelling show that a properly planned electricity grid leads to lower overall system cost, lower emissions, better integration of renewables and less curtailment,” stated the Transmission Grid Planning in Systems with High Shares of RE – Planning the Future Energy System in China report.
China has built a massive amount of solar capacity over the past decade, pushing PV installations from around 415 MW in 2009 to an astonishing 175 GW last year, according to statistics published by the International Renewable Energy Agency. Now policymakers are trying to shift system operations from planned dispatch to market-based power transactions while also laying long distance transmission lines. However, the government is still struggling to improve interconnections between China’s far-flung provinces and six regional power grids.
In its report, DENA calls for the use of scenarios and modelling as the best way to facilitate development of a more joined up electric grid layout. Offering suggestions about grid planning, the organization noted longstanding challenges such as regional overcapacity on the generation side as well as struggles with peak load regulation and a lack of supply-side flexibility.
“The construction of transmission lines that should help to integrate renewables has lagged, leading to serious curtailment of wind and solar energy,” said DENA, noting China’s power planning approach focuses on demand, generation and transmission, which correspond to demand forecasting and power source and grid planning. “Grid planning methodologies in China should increasingly consider uncertainties of grid planning and analyze the impacts of different policies and developments on the electricity system,” added the study.
As the Chinese government increasingly works on the launch and operation of electricity markets, policymakers will need to prioritize more market-based considerations to facilitate inter-provincial transactions, said DENA.
By the end of 2017, China had built 688,000km of transmission lines, as well as 205,000km of extra-high-voltage and ultra-high-voltage lines with a capacity of more than 500 kV. When the nation’s grids were built, policymakers were primarily concerned with ensuring power supply and expanding coverage.
As a lot of renewables and other power sources are concentrated in northern and western China, transmission lines have traditionally followed a west-to-east path, including a northern transmission corridor which transmits coal and hydropower to the Beijing-Tianjin region; a central path extending from Qinghai and Sichuan provinces to the east coast; and southern lines connecting Yunnan province to the country’s southern-central coast.
The system is not without issues, stated DENA in the report. Some transmission lines, for example, are not properly inter-meshed with provincial lines. The German body estimates a highly meshed grid could reduce system costs by RMB4.7 billion ($679 million) by next year, mostly from fuel savings as coal consumption falls.
“Although … provincial power planning and … national power planning are interlinked … provincial power grid planning is prepared by the provincial power grid companies and approved by the provincial energy authority,” said the GIZ report.
With Beijing needing to improve how it coordinates with the provinces to prevent the unsynchronized construction of inter-provincial grid lines, it also needs to work on “two-way interaction” in its planning processes, said the GIZ. “First, the role of the spot power market will be more important in the near-term power system,” stated the report, “and a more market based analysis could help to activate inter-provincial, transaction-based power flows and thereby facilitate better capacity utilization and integration of [renewables].”
Central government also needs to provide greater clarity on how distributed power sources such as electric vehicles and off-grid storage will work within the national grid.
“Chinese grid planning focuses on specific projects like a certain transmission line or transmission corridor and how these can be used efficiently by balancing power supply at the sending end and demand at the receiving end,” said DENA. “This approach neglects RE [renewable energy facilities] since they have low operating hours, but [they] can supply electricity with low additional cost. It is [important] to optimize the overall energy system instead of specific lines, considering cost efficiency, electricity flows and system stability in an integrated perspective.”
Learn from Europe
Another weakness of Chinese grid planning is that policymakers tend to consider investments in transmission with only capital costs and tariffs in mind, without factoring in goals such as emissions reduction or protection of the environment.
“The capacity factors of RE like wind and photovoltaic in the Chinese grid and peak load supply planning [are] quite low, which leads to a higher assumed need of coal power plants,” DENA stated. “However, the capacity factors of renewables should be considered for a certain area, not one single power plant, since fluctuating generation of [renewables is] smoothed over larger balancing areas.”
Chinese policymakers should consider the experience of grid operators in Europe when planning future grid design, the GIZ argued. The European Network of Transmission system Operators (ENTSO-E), was established to ensure the grid runs smoothly enough to facilitate trade in electricity across national borders in Europe, for example.
“The European approach considers uncertainties to a higher extent and shows the impact of different policies by creating and comparing various probable development scenarios,” added DENA. “Although the national implementation of such a process in China – including all provinces – would require significant effort and strong coordination, there are significant systemic benefits to be expected from it.”
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