Chinese Electric Power Industry Outlook & the Turning point of 2007
May 13, 2016
Jason M. Macdowell

Electricity demand in China is evolving at a rapid pace. Only 20 years ago, the load (electricity demand) profile in the country was dichotomous: strong demand and development in the big cities, Beijing, Shanghai and Guangzhou, on the coast; on the interior of the country there was very little in the way of development of the electric power system, with roughly 23,000 villages in the interior of the country without electricity at all.

This is the result of swelling populations in the urban parts of China as people came to the coasts for employment and the potential for a higher quality of life. China has largely been a predominantly coal-based electric power society, and up until 15 years ago was capable of getting sufficient generation out of its fleet to meet the need of the high load centers on the coasts.

However, as more of the population moved to the coastal cities, the load profile of the country continues to change dramatically, with more consumers requiring electricity from the grid, as well as increased industrial output from tremendous economic growth. The country is challenged with building coal plants quickly enough to keep up with demand and keep the grid system balanced.

For several years, this imbalance in generation vs. load resulted in frequent load shedding in the country. The country would often shut down manufacturing operations and require consumers to decrease the electric power use at certain times of the day, to ensure the frequency and stability of the grid was maintained.

More recently China’s leadership has been tackling a significant quality of life challenge for the country, air pollution. While there are numerous contributors to the air quality challenges in China, one of the major contributors has been coal-fired power plants. As a result, the country’s leadership started making the integration of renewable generation a priority. Before they could do that though, they needed to be able to meet the basic needs of balancing generation and demand on the system. This happened in 2007 when China’s electric power system turned in a surplus of generation for the first time.

This was significant because it enabled the country’s ability to further build out and invest in broader grid infrastructure, adding reliability to the system, while also enabling China to make choices on the fuel the country calls upon to meet demand. Effectively, this was a turning point where the country was able to start focusing on investing in its renewable energy future, in a meaningful way.

Renewable energy on the grid is one of the largest focus areas where China has invested in Over the course of the last decade or so. While the opportunity to focus on integrating renewables presented itself in 2007, there were still several technical and economic challenges to making it work. The country’s grid codes and standards were created solely with coal-powered synchronous generation in mind. Specifically, they counted on the availability and dispatch-ability of the fuel source, whereby they could turn it on and off, and up and down as the system’s load required. The challenge with renewable generation (specifically wind and solar), is it doesn’t behave like fossil fuel sources of electricity.

Wind and solar are inherently variable forms of power generation, and accurately forecasting when the wind is going to blow and the sun is going to shine is challenging. Tack these challenges on top of the fact that China’s grid and the codes that regulate it weren’t originally designed for this type of generation, and there was a major roadblock to putting renewables on the grid.

GE has been working with our key stakeholders in the country to help them learn from our experience in other emerging countries, helping them with studies and lessons learned to revise their grid codes and standards to enable renewables to join the energy mix in the country. Working with key players in the country’s electric power industry to help developing system reliability planning and economic dispatch capabilities for renewables,  we’ve been able to help them move from their initial target of approximately 20GW of renewables by 2020 (which were set in 2004), to new targets of 60-80% renewable energy capacity by 2050.

The scale of this new goal is incredibly ambitious, the likes of which we haven’t seen anywhere else in the world. There are several hurdles, many of them technology related the country will need to clear before they can get there.

If they can get there, it could be a fundamental game-changing electric power regime for the country, helping its leadership achieve its goal of enhanced air quality, while also providing electricity to places in the interior of the country that have never had it before, enhancing the overall quality of life for its citizens there.

You can learn more about our views on the evolving Chinese electric power industry, and several other hot topics in the electric power industry by listening to the podcasts (click image below)!

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Jason M. Macdowell

Jason MacDowell is the Manager of the Renewables, Controls and Protection segment of GE’s Energy Consulting business, where he leads a global team focused on power system analysis, thermal and renewable generation integration analysis, compliance testing and assessment, custom hardware solutions for generator protection and controls and power system consulting.  He brings over 16 years of energy industry experience on power systems engineering analysis and operation, interconnecting thermal and renewable generation into the bulk power system, wind turbine and renewable plant electrical design, load flow and stability modeling, power plant performance testing, sub-synchronous resonance and generator protection and has led multiple programs and studies on these subjects.