State Grid Releases New Energy Report

On May 20, 2020, in Beijing, State Grid issued its 2020 Report on the Development of New Energy and introduced how new energy has been tapped in its business areas and new measures to promote its development and accommodation.

I. New energy Development in State Grid’s Service Areas

2019 was the fifth year since President Xi set a new strategy on energy security. Over these five years, China has been committed to revolution of energy production and consumption, promoting the supply-side reform, spurring innovation in energy technology, and forging ahead with the reform of energy system. Such efforts paid off as the country has built up its own low-carbon, safe, and efficient energy system to underpin sustainable socio-economy growth.

By the end of 2019, China had installed a total capacity of over 400GW new energy, 34% of the world's total. In State Grid’s service area the number has reached 350GW, up 16% year on year (YoY). New energy accounted for 22.3% of its total generating capacity, a YoY increase of 1.9%. The installed capacity of wind power was 169GW and solar 177GW, each with a YoY increase of 16%. New energy has become the primary or secondary power sources in 21 provinces and regions across China.

Utilization rate of new energy continues to grow in 2019. In State Grid’s service area, annual generation of new energy reached 510.2TWh, a YoY increase of 16%. It accounted for 9.2% of the total power generation with a YoY increase of 1.0%. Wind power reached 315.2TWh, a YoY rise of 11%. Solar power topped 195TWh, a YoY increase of 25%. In 8 provinces and regions, over 15% of the power consumed came from wind and solar power. Among them, Qinghai Province topped the list with a high percentage of 31.4%. State Grid saw a decrease of new energy curtailment of 16.9TWh, down by 39% YoY. The utilization rate of new energy reached 96.8%, up 2.7% YoY, meeting its goal of raising that percentage to 95% one year ahead of schedule.

II. State Grid’s Contribution in 2019           

As a key enterprise for China’s energy security and the national economy, State Grid takes the lead in following through the new strategy on energy security and shoulders its responsibilities of promoting and utilizing new energy. It has acted in line with the national plan on renewables to help tackle air pollution, protect the blue sky, making great efforts to tap renewable sources and boost their consumption. In 2019, the company planned and delivered 30 major projects to orderly develop renewable energy, sped up grid construction, unified dispatching efforts, promoted renewable deals, and strengthened technology innovation. Those projects enabled State Grid to make remarkable achievements in tapping clean energy.

Grid connection

At the beginning of the year, State Grid estimated the possible power consumption of new energy on a rolling basis, and took the initiative to propose plans on additional capacities and distribution of renewable projects to competent national and local authorities. It has been committed to facilitating corresponding grid connections of 401 centralized and 280,000 distributed new energy projects. In line with national requirements, State Grid further optimized the geographical distribution of new energy. 88% of its newly-installed capacity was in provinces and regions with almost no restrictions on additional new energy sources (for over 95% of power utilization rate in those areas).

Grid construction

State Grid completed UHV AC and DC projects connecting Zhundong in Xinjiang Uygur Autonomous Region and Southern Anhui, Shanghaimiao Town in Inner Mongolia and Shandong, and started building the grid between Zhangbei and Xiong'an, Qinghai and Henan. By installing condensors at converter stations and upgrading wind farms among other measures, State Grid has further raised the DC-transmission capacity of the Qilian-Shaoshan line, the Jarud-Qingzhou line, the Lingzhou-Shaoxing line, and the Yikezhao-Linyi line to 5GW, 5.6GW, 7.2GW, and 4GW respectively. The company has acted to raise the working capacity of 11 UHV DC lines by 397 hours. It has invested 12 billion yuan in new energy related grid connections and transmission of 750 kV and lower. State Grid has built and run 15 key projects (such as a third line of 750 kV in Northwest China, etc.) to boost new energy consumption by raising its transmission capacity to over 8.2GW.

Dispatch and operation

State Grid has improved its technical and managerial systems to accommodate a high proportion of on-grid new energy. It centralizes the dispatching of new energy and enables multiple players at varied levels inside the grid system to coordinate with each other and act promptly to maximize power consumption. It works with energy authorities to enhance market mechanisms to boost new energy development. Thanks to such joint efforts, 4 regional and 12 provincial markets were up and running to shave peak loads. Those markets increased the consumption of new energy by 12.4TWh in 2019.

Meanwhile, State Grid also enhanced the synergy among power sources at different levels. It optimized mechanisms for regional and cross-regional sharing of power reserves, and reduced 4GW of thermal-power reserve in Northwest and 1.27GW in Northeast China. Moreover, it aimed to unleash the full potential for peak shaving, leverage the role of pumped storage power stations, and enhanced the flexibility of thermal power stations with a combined capacity of 57.75GW. It promoted multi-level coordination in the dispatching and control of new energy, improved their predictability by technical means, and visualized the performance of all distributed power sources.

Power trading

State Grid fully availed the role of the market in allocating resources, took steps to improve mid-and-long term trading mechanisms, and sped up efforts to develop power spot markets. 6 provincial spot markets have begun pilot operation. The company also worked to expand inter-provincial transaction, and created trading mechanisms for green power at the Winter Olympic venues, and the Daxing International Airport. Moreover, it facilitated power transmission from Xinjiang Uygur Autonomous Region to boost local development.

In State Grid’s service areas, inter-provincial transactions of new power reached 88TWh in 2019, a YoY increase of 22%, with spot transactions accounting for 5TWh. Also, State Grid worked to expand intra-provincial markets for new energy through direct transaction, trading of the right to generation, and promoted pilot transactions of virtual power plants. It contributed to a total market transaction of 57.1TWh of new energy at provincial markets, up 34% YoY. Following national guidance on coal to electricity, the company replaced coal with 180.2TWh of electric power in 2019.

Technological innovation

State Grid has continued to invest in the R&D of new energy related technology. The company initiated 31 R&D projects with a total spending of 154 million yuan. Those projects made State Grid winner of several scientific and technological awards, including 3 national prizes. In addition, the company pressed ahead with grid projects for the 2022 Winter Olympics, adopted shared energy storage, and carried out several demonstration projects (on virtual power plant, and the Internet of Energy in cities, etc.).

Meanwhile, the company contributed to building the standard system for new energy. It led the formulation of 3 national standards, 2 industrial standards, and 3 business standards. It also took an active part in international and domestic exchanges, enhanced cooperation with think tanks and research institutes, held themed working meetings to boost new energy consumption in key areas, and pooled efforts to advance energy transition.

Building cloud platform 

State Grid aims to better fulfill its tasks assigned by the central government and build itself as a world-leading enterprise with Chinese characteristics in the field of the energy Internet. It acts in line with China’s national strategy on energy transition and renewable development, and follows the major trend of digital energy revolution.

It innovated in building its own cloud platform for renewable energy, an open service system that embraces coordination and synergy with "full connectivity of all relevant links under all scenarios". It was committed to creating such a digital platform for the new energy economy—the platform visualizes the status of any new energy project with an excellent ability to process data and it is easy to use thanks to its high degree of flxibility. A platform like this is to pave the way for the quality growth of China's new energy sector.

The platform has 15 functional modules (such as grid services, consumption calculation, etc.) to provide "one-stop" services for users. Furthermore, it integrates information across the whole renewable chain, and servers the end-to-end process of the renewable business, and thereby forms an ecosystem that promotes both the upstream and downstream businesses. Currently, the platform is in pilot operation in 13 provincial companies.

III. Initiative for 2020

2020 is the last year of the 13th Five-Year Plan period and time to wrap up the country’s three-year action plan on clean energy accommodation. Resolute in its implementation of national decisions, State Grid teams up with partners to overcome impacts from the COVID-19 epidemic, and goes all in to promote new energy development.

To achieve goals set for this year, have less than 5% curtailment of renewables to ensure sustainable long-term development during the 14th Five-Year Plan period and beyond, State Grid summed up past experience and formulated a new initiative to boost renewables in 2020. Highlights of the initiative are as follows:

1. More renewables on grid 

State Grid works to deliver on national policies and optimize the distribution and on-grid schedule of newly-installed capacities in line with data from its monitoring and early-warning mechanisms.

It continues to tap potential for a bigger role of renewables as it sets to meet the target of increased installed capacities and consumption, and an increased share of renewables to over 10% in power generation.

2. Grid connections

State Grid offers to prompt renewable businesses, with connection plans and recommended volumes of consumption to ensure timely, efficient, and compliant connections of new projects.

3. Grid construction

State Grid presses ahead with key projects (such as Zhangbei-Xiong'an UHV AC Project, Qinghai-Henan UHV DC Project, Zhangbei Flexible DC Project, etc.). These projects are expected to put into operation within 2020. The company increases investments to speed up grid construction so that new energy projects could be connected and start generating power as scheduled.

4. Peak shaving

It expedites the construction of pumped storage capacity, and ensures the Jixi Pumped Storage Power Station in Anhui Province will put into operation this year. It cooperates with partners to increase the flexibility of thermal power generating sets. Furthermore, it focuses on the R&D of key renewable-related technologies such as energy storage, and Internet + smart energy, to enhance the peak shaving capability of the grid system.

5. National dispatching

State Grid continues to leverage its strength of dispatching power at the national level. It aims to unleash the potential for inter-provincial and inter-regional power transmission, improve the mechanism of sharing power reserves at the provincial, regional, and inter-regional levels, maximize the role in resource allocation of a large grid at the national level, and raise the overall consumption level of new energy.

6. Output prediction

To enable a large-scale development of new energy, State Grid is building a professional weather monitoring platform and a two-tier system to forecast grid operation and renewable generation. Thus the company is able to predict renewable output in a more accurate way.

7. Power trading

State Grid has taken steps to promote medium and long-term deals and spot market transactions of renewable energy between and among provinces. It aims to push the transaction volume to over 80TWh in 2020. It continues to replace coal with electric power, and expand the trading scale of clean energy and self-supply power plants, in order to have 30TWh and more of clean power replacing conventional sources in 2020.

8. Ensured consumption

As required by the national government, State Grid organizes its provincial branches to ensure accommdation plans are implemented. It has also formulated detailed rules to encourage market players to take their share of the accommodation task.

9. Subsidy management

State Grid has developed a standardized project list for managing renewable projects. This enables it to receive and review subsidy applications in a fast, accurate, and efficient way, transferring subsidies allocated by the central government to eligible applicants on time and in full.

10. Cloud platform

State Grid is building an open, transparent, efficient and easily accessible platform to promote the digital economy of renewables. The platform is to provide a “one-stop” online services from installation, planning, design, construction, grid connection, operation, transaction and settlement. It aims to improve work efficiency and service quality, foster an ecosystem for win-win cooperation, and stimulate both the upstream and downstream businesses.

IV. Proposals

The development of new energy calls for attention and support from the whole society, science-based guidance from the government and joint efforts of the whole industry.

Thus State Grid proposes the following steps.

1. Top-level design and coordinated planning 

It is necessary to identify feasible objectives, and schedule proper timing of renewable projects, enhance cooperation amongst various planning groups (i.e. national and region parties, supply sources and power grids, renewables and conventional energy, etc.), to ensure consistent objectives, tasks, and measures at each level.

2. Improved mechanisms for efficient consumption 

In the course of market reform, efforts should be made to verify the obligatory hours of new energy consumption in different regions, and strike a balance between mandatory full purchase with market-based deals. Service market shall be improved and new energy power generators should be able to take part in spot market transactions.

3. Enabling policies for sustainable development 

It is necessary to clarify the role of energy storage in the power systems and lay out principles on energy storage for renewable stations. Policy support should be given to facilitate the planning and construction of storage projects and help reduce their costs. Policies should make the demand side more responsive, and raise the flexibility of power loads to compliment the volatility of new energy generation.

4. Technological innovation

It is necessary to innovate in key technologies, advance the establishment of Energy Internet, raise the efficiency of the energy system, and build a clean, low-carbon, safe, and efficient energy system. Technical standards and engineering specifications should be improved to better govern the grid connection of new energy and distributed sources and set out higher technical standards for grid-related safety of new energy generation.

5. Cloud platform for quality development 

It is necessary to pull efforts to boost the cloud-based development of renewables. Through joint efforts, a Chinese-styled worldclass platform for a digital renewable economy would be built to offer data-driven, inclusive and novel services of high quality from end to end. Such a platform is to energize the quality development of the renewable industry.

Note: “new energy” mainly refers to wind and solar energy.