Wednesday, October 26, 2011

Two articles on emerging technologies in China

[Two articles on emerging technologies in China, one on tidal power, and
a longer piece on an investment by China Southern Power Grid in smart
grid technologies - from the US perspective.]

China's tidal power development speeds up
(China Economic Net)
October 25, 2011

Edited and Translated by Zhao Guobing, People's Daily Online

"Tidal power generation has the same working theory as hydropower. You
have to build dams aside lochs or river mouths where the tide emerges
and place hydroelectric generating sets in the dams so that they can
generate power due to the difference of tides level. From the angle of
energy, hydroelectric generating sets translate tide static energy and
kinetic energy into electric energy," said Yu Rongkai, official director
of the Rushan Blue Economic Zone.

China has abundant resources of tidal power. It has more than 18,000
kilometers of mainland coastline and more than 14,000 kilometers of
coastline possessed by more than 5,000 islands. According to an
incomplete statistics, China has a tidal power reserve of 190 million
kilowatts, 38.5 million kilowatts of which is available for development,
giving an annual output of 87 billion kilowatt-hours of electricity.
Citing the China Ocean Energy Resources Division, 424 tidal power
stations can be built along the coastline, mainly in maritime provinces
like Zhejiang and Fujian.

China began to build tidal power stations in the middle of 20th century.
Rushan, which is in Shandong province, possesses Asia's first tidal
power station — Jingang Tidal Power Station — which was built several
decades ago. Baishakou Tidal Power Station, which was built in 1987, is
the second largest tidal power station in China.

Yu Rongkai's added that tidal power is more reliable than wind power and
solar power because it has the following advantages: stability, requires
no farmland, environmental-friendly, its cost is seven-eighths less
compared to thermal power generation. Thanks to years of pilot study,
China has mastered a moderately mature technology and is now the third
largest tidal power generation country following France and Canada.


China Pours Money Into Smart Grid Technology
October 25, 2011
By Melanie Hart, Center for American Progress

[For the full article, see:]

There is no way to get around this fact—China aims to modernize its
energy infrastructure at home and dominate clean energy technology
markets abroad. At the 2011 Smart Grid World Forum in Beijing late last
month, China's State Grid Corporation 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.
According to its three-stage plan, China will invest another $240
billion between 2016 and 2020 (including another $45 billion toward
smart grid technologies) to complete the build-out of a "stronger,
smarter" Chinese power grid.

When complete, this system will improve energy efficiency, lower carbon
emissions, and give Chinese consumers more control over their utility
bills. Chinese leaders are betting that upgrading to a smarter
electricity grid will also drive technology innovation and move the
country up the manufacturing value chain. The Chinese view smart grid
technology as the next industrial revolution—and they want to make sure
that once other countries start upgrading their own grids, they will buy
most of their equipment from China.
clean-energy power grid, Western states

This issue brief details why the United States should take note of
China's ambitions and step up our own smart grid efforts. We, too, need
a stronger, smarter electricity grid, and in many smart grid sectors,
our enterprises are already producing the best technologies. All they
need is a bit more policy support at home to speed up interoperability,
to drive down equipment prices, and to ensure the smart grid revolution
will be a market driver not only for China but also for the United
States both at home and in export markets abroad.

What is a smart grid and why does China need one?

The main difference between a smart grid and a conventional grid is that
smart grid components (similar to smartphones) are upgraded to include
sensors, computers, and a wireless interface. That means the bits and
pieces of the electric grid—the transmission wires, transformers,
distribution wires, and usage meters—transmit and distribute electricity
more efficiently and reliably to end users, and they can also report
back on how that process is going and adjust operations along the line
to fit changing conditions.

This smart functionality is critical for integrating key elements of a
clean energy future, such as renewable power generation and electric
vehicles. Unlike traditional coal-fired power, renewable power can be
decentralized (multiple wind farms instead of one massive coal-fired
power plant) and is often weather dependent. Conventional grid systems
are designed to transfer a steady and predictable flow of power from
point A to point B. When a thunderstorm reduces solar panel output or
increases wind turbine output, those power fluctuations can trigger
blackouts and burnouts in a conventional grid system. But a smarter grid
can adjust, either by storing excess energy in batteries until it is
needed or by moving power more efficiently across longer distances.

Smarter grids are also better at handling higher and more variable
demand loads, and that will be critical when more electric vehicles are
added to the system. Current consumer demand is very predictable, so
utility companies know exactly what times of the day to purchase and
distribute extra power to counteract daily peaks. Electric vehicles
likely will not follow traditional consumption patterns—meaning demand
peaks will be harder to anticipate—and that will create new operational
challenges that will be hard to address without a more automated system.

The Chinese need more clean energy to meet their escalating electricity
demand, and that will require a smarter grid. China is now the world's
largest electricity consumer, and Chinese demand is expected to double
over the next decade, and triple by 2035. Their current energy mix is
heavily dependent on coal—around 70 percent of overall consumption in
2010—and coal supply and price fluctuations are threatening economic
growth. In 2011, for example, coal shortages forced China's national
economic planner, the National Development and Reform Commission, to
begin rationing electricity in April, months ahead of the normal summer

To comply with the rationing, officials in China's power-hungry
industrial regions cut off power to small enterprises from 5:30 a.m. to
7:00 p.m. daily and to medium-sized enterprises every few days. This
forced many small- and medium-sized companies to operate only at night
or to rely on pricey gas-fired power generators to keep their businesses

The only way Chinese leaders can keep their economy growing at current
rates is to bring in more renewable energy power onto their national
grids. Their latest targets call for the country to increase renewable
energy to 9.5 percent of overall consumption by 2015, and a smarter
electricity grid will be critical for integrating those supplies into
the system.

The Chinese are also grappling with a major geographic issue. Energy
supplies are concentrated in the west (including coal, natural gas,
hydropower, and large wind farms), but demand is concentrated in the
east, which creates major transportation challenges. China's
west-to-east grid infrastructure is already overloaded, so coal supplies
are often shipped via rail and road. Problem is, transport bottlenecks
are so bad that in 2010 coal trucks triggered a month-long traffic jam
on the Beijing-Zhangjiakou highway.

To relieve congestion, the Chinese want to shift more west-to-east
transport to the grid, so a large chunk of China's upcoming grid
investments (around $78 billion out of the $250 billion mentioned above)
will go toward cross-country ultra-high-voltage transmission lines.

Killing two birds with one stone

As is the case throughout the green energy sector, Chinese leaders are
betting that if they can roll out a smarter electricity grid before the
United States, China can not only address their domestic energy
challenges but also get a head start on technology standardization. And
they see standardization as a critical step toward moving up the value
chain and playing a stronger role in global technology markets.

China's electricity market is divided geographically. China's State Grid
Corporation controls 88 percent of the country and serves more than 1
billion customers, and State Grid wants to leverage that position to
become a global smart grid standard setter. Smart grid networks involve
hundreds of new technologies, from wireless sensors and smart meters to
high-voltage transmission technologies, electrical vehicle charging
stations, and many others. State Grid is aiming to dominate many of
those industries, not only in China but also abroad.

In June 2010 State Grid issued its own proprietary equipment standards
for 22 different critical smart grid technology solutions. Equipment
manufacturers must abide by those proprietary standards to become State
Grid vendors, and since State Grid is the biggest smart grid customer in
the world, equipment manufacturers have a strong incentive to comply.

In most markets, equipment based on proprietary standards such as the
ones State Grid would like to see developed for its forthcoming smart
grid do not have good economies of scale because their equipment is
expensive to produce and less competitive compared to equipment based on
global standards. State Grid is betting that the Chinese market is big
enough (and they themselves control so much of it, including both
transmission and distribution) that they can use their massive
purchasing power to achieve economy of scale and drive down
manufacturing prices on their own.

Then, once Chinese manufacturers (many of which are State Grid
subsidiaries) are churning out competitively priced smart grid products,
they can export those same products to overseas markets such as the
United States—and if those products are based on State Grid proprietary
standards and intellectual property, the company will profit from every
unit sold.

It is not yet clear how strongly China's national leaders support State
Grid's one-grid-to-rule-them-all technology ambitions. Some in China are
calling for a new round of restructuring to make the market more
competitive and to reduce State Grid's massive purchasing (and therefore
standard-setting) power. China's National Development and Reform
Commission recently called for a new round of trials to experiment with
splitting up electricity transmission and distribution. If they proceed
with those reforms, that will take a big chunk of the market away from
State Grid.

No matter how they divide the market at home, however, Chinese leaders
have already elevated smart grid development to a strategic national
priority. Smart grid technologies are also considered a "strategic
emerging industry." Overall, that means that whoever drives the market,
whether it is State Grid acting alone or a more diversified group of
Chinese enterprises, Chinese leaders will provide strong policy support,
and China's massive domestic demand will ensure that the country becomes
a major player in global technology markets.

[continued at:]

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