Yang Kun: Improve the level of electrification to drive high-quality economic and social development

Development level of electrification in China

The proportion of energy used for power generation in the total energy consumption and the proportion of electricity consumption in the end-use energy consumption in China are basically the same as those of developed countries . In 2018, these two figures in China were 46.4% and 25.5% respectively,  higher than the world average, and basically the same as developed countries (about 48% and 24% in the United States, 45% and 24% in OECD countries, 52% and 30% in Japan, and 40% and 17% for the world average).

China has built the largest AC/DC hybrid power grid in the world, forming a power supply pattern featuring "power transmission from West to East, power supply from North to South, and mutual complimentary of hydro, thermal, wind and solar power". In 2011, the scale of power grid in China became the largest in the world, and in 2015, the problem of power consumption for people without electricity was comprehensively solved.

China made remarkable progress in the clean and green transition, and became a world leader in clean energy development. In the past 40 years of reform and opening up, China's new installed capacity of non-fossil energy power generation accounts for 1 / 3 of the global growth. The line loss rate of China in 2019 was 5.90%, reaching the advanced level of the countries with similar power supply density. 

The intelligent level of China’s power industry continues to improve, and the power system maintains safe and reliable operation. According to the Global Business Environment Report 2020 released by the World Bank, the "access to electricity" index in China jumped from 98th in 2017 to 12th in 2019.

The electrification in China still has great potential

First, the gap between  China’s electrification level and those of the developed countries

In 2019, per unit GDP electricity consumption in China was 0.621 kWh/USD, per capita electricity consumption and per capita residential electricity consumption were 5161 kWh and 732 kWh, respectively, while these two figures of the United States in 2018 were 11473 kWh and 4980 kWh, respectively, which are 2.2 and 6.8 times of China's 2019 figures.

From the perspective of electricity consumption structure, the electricity consumption of secondary industry in China accounted for 68.3% of the electricity consumption of the whole society in 2019 and it was 25.1% in the United States; the electricity consumption of tertiary industry in China accounted for 16.4% and it was 36.4% in the United States. The residential electricity consumption in US is 1.5 times that of industrial electricity consumption, and the residential electricity consumption is only 20.7% of industrial electricity consumption in China.

Second, the development of regional electrification is unbalanced.

The economic level varies from region to region in China, and the level of electrification in the economically developed areas in the South and East part of China is higher than in other regions. The per capita residential power consumption also differs significantly  among provinces and cities.

Third, there are differences in the level of electrification in various industrial sectors

In 2019, the contribution rate of the tertiary industry and urban and rural residents' electricity consumption to the whole society's electricity consumption growth was more than 50%, becoming the main driving force of the whole society's electricity consumption growth. The gap of electrification level between the tertiary industry and the first and second industries is gradually narrowing.

Fourth, the level of rural electrification still has great room for improvement

In 2018, the urban per capita power consumption was 8300 kWh, while the rural per capita power consumption was 4954 kWh, only 60% of the urban areas. With the continuous transformation and upgrading of rural power grid, there is a lot of room to improve the level of rural electrification.

Opportunities and challenges for electrification in China

First, great potential for power demand growth. It is estimated that the average annual growth rate of electricity consumption will be between 2.7% and 3.3% during 2020-2035 in China. By 2035, the total electricity consumption of China will reach 11400-12400 TWh.

Second, the development of coal power is constrained by carbon emission reduction, and the competitiveness of non-fossil energy power generation continues to increase. It is estimated that by 2035, the installed capacity of non-fossil energy power generation in China will reach 2030 GW, accounting for 57% of the total installed capacity, and non-fossil energy will become the main source to meet  the growing energy demand in China.

Third, new technology revolution will restructure of the industry and  facilitate the integrated development of multiple energy sources.Cloud computing, big data, IoT, energy storage, electric vehicles, and artificial intelligence will not only change the operating state and control mode of traditional power grids, but also effectively increase the proportion of electrical energy in the end-use energy consumption. With the help of a new generation of technology, a smart power system with new energy as the main body will be formed.

Fourth, improving the level of electrification requires simultaneous efforts on both the power supply side and the consumer side. From the perspective of power supply side, while strengthening the control of power grid stability, it is necessary to reinforce the ability of flexible operation of power supply side. From the perspective of power consumption side, the demand response potential of users for load regulation is huge, but it needs effective policy guidance and incentives.

Suggestions

First, to actively serve the major national strategies of new industrialization, informatization, urbanization and agricultural modernization. Second, to build a smart power system centered with new energy. Third, electricity substitution should be vigorously enhanced in the sectors of transportation, industrial and agricultural production, urban and rural residents energy consumption. Fourth, to deepen the market-oriented reform of electric power industry and realize the optimal allocation of electric power in a wider range.