[smart grid market research] china: state grid corporation of china profile, march 2012
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The State Grid Corporation of China’s (SGCC) size is mind-boggling. It supplies power to 88% of China and serves an area populated by over 1 billion people. At the end of 2011, SGCC had 286 million customers. Leveraging its huge size and ability to start building Smart Grid technology into its transmission infrastructure from scratch rather than retrofitting an antiquated system, it is not only the driving force behind China’s efforts to build a nationwide Smart Grid, but also for China’s push to be the world leader in developing a large-scale Smart Grid system. According to the SGCC, only 36 million smart meters have been installed as of 2011, but they have an ambitious plan to install over 300 million smart meters by the end of 2015. The sheer enormity of the state-owned transmission company, coupled with streamlined regulatory processes designed to promote rapid construction without barriers typical in further developed countries are among the key reasons that China is the largest, most important market for Smart Grid development in the world.TRANSCRIPT
Zpryme Smart Grid Insights | March 2012 | China: State Grid Corporation of China Profile | Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved
CHINA: State Grid Corporation of China Profile
1 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
―Over the next 5 years, SGCC
expects to invest just over $400
billion in power grid construction,
of which about $100 billion will be
directed towards Smart Grid
technologies.‖
Source: State Grid Corporation of China’s (SGCC) announcement January 2011 and April of 2011
2 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
The Worlds Largest Electric Utility
The State Grid Corporation of China’s (SGCC) size is mind-
boggling. It supplies power to 88% of China and serves an
area populated by over 1 billion people. At the end of
2011, SGCC had 286 million customers. Leveraging its huge
size and ability to start building Smart Grid technology into
its transmission infrastructure from scratch rather than
retrofitting an antiquated system, it is not only the driving
force behind China’s efforts to build a nationwide Smart
Grid, but also for China’s push to be the world leader in
developing a large-scale Smart Grid system. According to
the SGCC, only 36 million smart meters have been installed
as of 2011, but they have an ambitious plan to install over
300 million smart meters by the end of 2015. The sheer
enormity of the state-owned transmission company,
coupled with streamlined regulatory processes designed
to promote rapid construction without barriers typical in
further developed countries are among the key reasons
that China is the largest, most important market for Smart
Grid development in the world.
Over the next 5 years, SGCC expects to invest just over
$400 billion in power grid construction, of which about
$100 billion will be directed towards Smart Grid
technologies, and about one-sixth of the capital on
developing a transmission network across China.1
Additionally, China’s government expects to spend on the
order of $473.1 billion over the next 5 years on
developments to incorporate renewable sources of
energy, such as wind and solar power.2
1 State Grid Announcement January 2011 and April of 2011. 2 Planned Investment from China’s 12th Five-Year Plan for Economic and Social Development (2011 -2015).
*SGCC AMI reported data for 2009 - 2011, and target installations for 2015. Projections
for 2012 – 2014 estimated by Zpryme.
145
170 181
244 258
286
0
50
100
150
200
250
300
350
2006 2007 2008 2009 2010 2011
Total SGCC Customers Served
2006 - 2011 (in millions)
(figure 1, source: 2011 SGCC CSR Report)
2.2
33 36
86
146
221
300
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014 2015
Total SGCC Installed Smart Meters
(in millions)
2009 to 2011 actual | 2012 to 2015 ptojections*
(figure 2, source: SGCC Smart Meter Plans, February 2012)
3 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
SGCC Key Operation Metrics, 2006 – 2011 figure 3
Utility Metric Unit 2006 2007 2008 2009 2010 2011 CAGR
Number of customers served million 145 170 181 244 258 286 14.6%
Smart meters installed million n/a n/a n/a 2.2 33 36 n/a
Electricity sales TWh 1,710 1,974 2,124 2,275 2,689 3,093 12.6%
Revenue billion USD $135 $160 $180 $199 $242 $265 14.4%
Total assets billion USD $192 $215 $260 $291 $329 $349 12.7%
Investment in power grid construction billion USD $28 $34 $39 $48 $42 $48 11.3%
Centralized tendering volume billion USD $19 $26 $30 $29 $28 $37 14.2%
Market share % 87.1 88.1 90.0 90.7 93.7 95.6 n/a
Peak load in the service area MW 306,516 342,755 370,224 424,900 484,100 535,460 11.8%
Length of transmission line [110 (66) kV and above] km 413,219 457,104 496,332 561,456 618,837 655,131 9.7%
Transforming capacity [110 (66) kV and above] MVA 1,137,790 1,342,700 1,601,420 1,886,540 2,131,930 2,391,620 16.0%
Line loss % 6.40 6.29 6.10 6.12 5.98 6.53 n/a
Total on-grid electricity in the service areas TWh 1,840 2,540 2,280 2,430 2,880 3,240 12.0%
Connected capacity from renewable energy generator units MW 2,285 4,076 8,030 14,308 25,530 40,030 77.3%
On-grid power from renewable energy generator units TWh 3.4 6.2 14.6 27.4 49.2 115.4 102.7%
Source: SGCC Corporate Social Responsibility Report, 2011
4 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
SGCC Profile
With just over 1.5 million employees, the SGCC is the
largest electric power transmission and distribution
company in the world. It is headquartered in Beijing, in
China’s Xicheng District. Formed in December, 2002 when
the State Electric Power Company was dissolved and
broken into separate companies according to function,
SGCC operates power transmission, distribution and other
assets previously belonging to the former giant, the State
Electric Power Company. For distribution, it has its five
subsidiaries: Northern China, Northeastern China, Eastern
China, Middle China and Northwestern China. The mission
of the company is to provide safe, economical, clean and
sustainable electric power for social and economic
development.
The world’s largest transmission company, transmitting
energy to over 88 percent of China and serving an area
with over 1 billion inhabitants, SGCC has enormous
influence over not only the development of Smart Grid
infrastructure, design, and management in China but also
throughout the world. This is partly because China aspires
to emerge as the global leader, not only across the entire
Electric Vehicle (EV) value chain, but in Smart Grid
development and implementation overall.
Electricity Sales and Peak Load
From 2006 to 2011, SGCC’s electricity sales have increased
by 12.6% a year, on average. Electricity sales have grown
from 1,710 terawatt-hours (TWh) to 3,093 TWh during this
time period. In 2011, SGCC’s peak load in their service
area reached a staggering 535.5 GW.
1,710
1,974 2,124
2,275
2,689
3,093
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2007 2008 2009 2010 2011
Total SGCC Electricity Sales
2006 - 2011 (in TWh)
(figure 4 , source: 2011 SGCC CSR Report
$135.1
$159.8
$180.3 $198.9
$242.2
$265.0
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
2006 2007 2008 2009 2010 2011
SGCC Total Revenues
2006 - 2011 (in U.S. billions)
(figure 5 , source: 2011 SGCC CSR Report)
5 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
Revenues
The SGCC’s 2009 total revenues were $199 billion. In 2011,
SGCC announced revenues of about $265 billion. Pre-tax
profits reached $8.4 billion. SGCC ranked seventh in the
2011 Fortune Global 500 list of the world's largest
companies by revenue.
Transmission and Substation Capacity
In 2011, SGCC’s total length of the transmission lines [110
(66) kV and above] it owns and operates was greater than
655,131 kilometers (407,080 miles). Its substation capacity
was 2.39 billion KVA.
Renewable Energy
In 2010 installed wind power capacity in China reached
41.9 GW, overtaking the U.S. for the first time, and
becoming the world leader. However, the state-run power
grid is a bottleneck to using this energy, as much of this
capacity was unable to be integrated and thus was
excess capacity. In order to support the massive grid
power integration, in 2011 SGCC announced that they will
increase efforts in developing the power grid and that by
2015 they will have completed the Smart Grid, bringing the
smart gird to international high-tech levels, and increasing
its ability to integrate power from wind farms to 100 GW
and solar farms by 5 GW.
At the end of 2011, SCGG had a total of 40.0 GW of
renewable energy capacity.
Organizational Structure
The SGCC runs power transmission and distribution
networks in 26 of China's 31 provinces, municipalities and
autonomous regions.
SGCC is comprised of 5 regional power grid companies,
26 provincial electric power companies, 5 scientific
research institutes and 22 affiliates. The smaller companies
include two electric power grid operators, five electric
power generation companies and four relevant business
companies. Each of the five electric power generation
companies owns less than 20% (32 GW of electricity
generation capacity) of China's market share for electric
power generation.
China's power transmission system remains under-
developed. There is no national grid. Instead there are six
regional grids—five managed by the (giant) SGCC (north,
north-east, east, central and north-west) and an
independent grid (south) managed by SGC (covering the
light manufacturing hub around Guangzhou-Shenzhen
and the inland areas of Guangdong, Guangxi and
Guizhou). The lack of a unified national grid system
hampers the efficiency of power generation nationwide
and heightens the risk of localized shortages.
The central government has made creation of a unified
national grid system a top economic priority to improve
the efficiency of the whole power system and reduce the
risk of localized energy shortages. This will also enable the
country to tap the enormous hydro potential from western
China to meet booming demand from the eastern coastal
provinces.
6 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
SGCC Regional Power Companies and Provincial Electric Power Companies figure 6
North China Power Grid Company, Ltd East China Power Grid Company, Ltd Central China Power Grid Company, Ltd
Beijing Electric Power Company
Tianjin Electric Power Company
Hebei Electric Power Company
Shanxi Electric Power Company
Shandong Electric Power Company
Shanghai Electric Power Company
Zhejiang Electric Power Company
Jiangsu Electric Power Company
Anhui Electric Power Company
Fujian Electric Power Company
Hubei Electric Power Company
Hunan Electric Power Company
Henan Electric Power Company
Jiangxi Electric Power Company
Sichuan Electric Power Company
Chongqing Electric Power Company
Northeast China Power Grid Company, Ltd Northwest China Power Grid Company, Ltd
Liaoning Electric Power Company
Jilin Electric Power Company
Heilongjiang Electric Power Company
East Inner Mongolia Electric Power Company
Shaanxi Electric Power Company
Gansu Electric Power Company
Qinghai Electric Power
Ningxia Electric Power
Xinjiang Electric Power
Tibet Electric Power Company
*Note: The SGCC also holds a 100% stake in State Grid Brazil Holding, which consists of seven transmission companies in Brazil, and a stake in the National Grid Corp of
Philippines.
7 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
SGCC Smart Grid Plan
SGCC’s definition of a ―strong and smart‖ grid is a modern
power grid based on a strong information and
communication platform, with a UHV grid backbone and
subordinate grids coordinated at all levels. Furthermore
the subordinate grids must be IT-based, automatic and
interactive. SGCC has divided the development of a
Smart Grid into three phases: Phase 1: Planning and Pilots
(completed in 2010); Phase 2: Construction (2011 – 2015);
and Phase 3: Enhancement (2016 – 2020).
At the end of 2011, SGCC has implemented 238 Smart
Grid pilot projects to solve technical issues, test designs,
and develop management systems. These projects
covered the entire gamut of Smart Grid implementation,
ranging from connecting wind power plants to
automating distribution networks to metering households.
The projects were implemented across different regions of
China, including a highly publicized Smart Grid
demonstration project at the Shanghai World Expo. Using
the experience gained from these projects, SGCC
released a set of industry rules, standards, and favored
technologies for 22 criteria of Smart Grid technology in
June 2010.
In April of 2011, an expert from the Energy Research
Institute of the State Grid indicated that SGCC will invest
about $400 billion from 2011 to 2015 in their power grid.3
Of this amount, about 25% or $100 billion will be directed
towards Smart Grid equipment and technologies. In 2011,
SGCC invested $47.7 billion in power grid investments, an
increase of $6.0 billion from 2010.
3 www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1102&MainCatID=&id=20120228000008
Because of these investments, China is predicted to
become by far the world’s largest Smart Grid market.
Although the SGCC is looking for domestic manufacturers
to drive down the cost of smart meters through economies
of scale, much of the technology inside the meters will
come from Taiwan and Silicon Valley based companies.
The SGCC’s focus right now is on distribution networks -- in
an attempt to prevent it from splitting from the transmission
network. In the meantime, SGCC is also building a strong
supply chain internally, making its own specifications and
standards, manufacturing equipment, and integrating the
equipment into its own grid. To position itself better to
benefit from the coming Smart Grid boom, SGCC
acquired electrical-equipment makers Pinggao Electric
and XJ Electric, early in 2010; it is very likely that they will be
on the lookout for other value-adding acquisitions or
mergers.
$28.0
$33.7
$39.5
$47.9
$41.8
$47.7
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2006 2007 2008 2009 2010 2011
SGCC Investment in Power Grid Construction
2006 - 2011 (in U.S. billions)
(figure 7 , source: 2011 SGCC CSR Report)
8 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
Summary of SGCC Smart Grid Pilots, Projects, and Demonstrations
figure 8
Technology Area As of Year Ending in 2011 Future Plans
Overall SCGG Smart
Grid Pilots/Projects
238 pilots, projects, and demonstrations are in operation across 25 different technological segments
298 pilots, projects, and demonstrations will be operation
across 29 different technological segments (to be
completed by 2015)
Pilots cover 88% of China taking place in 26 of 31 provinces
Advanced Metering
Infrastructure
26 provinces and 2.2 million users (2009) 300 million smart meters (2015), realize 100% coverage
33 million smart meters (2010)
36 million smart meters (2011)
EV Charging and EV
Infrastructure
26 provinces and 108 public charging/swapping stations Full SGCC service area network coverage (to be
complete by 2015)
7,245 AC charge points
EV charging networks constructed in Qingdao and Hangzhou
Smart Cities and
Communities
6 smart communities constructed in Beijing, Chongqing, and Langfang Enhancements such as green power options, home
energy management, and additional smart buildings
25 new smart communities started in 2011
3 smart parks constructed in Jiangsu, Shandong, and Gansu
4 smart building construction started in Shanghai, Chongqing, Beijing, and Zhejiang
Large-Scale Smart
Grid Demonstration
Projects
Shanghai Expo Smart Grid Demonstration (completed in 2010) Yangzhou Economic& Technical Developing Zone (to be
completed in 2012)
Sino-Singapore Tianjin Eco-City (completed in 2011) Jiangxi Gongqingcheng city (to be completed in 2012)
Beijing Future Tech City (to be completed in 2013)
Customer Service and
Online Consumer
Portals
2 centralized service centers built in Jiangsu and Shanxi All provincial level service centers complete (by 2015)
9 interactive service websites/portals covering North China 17 additional service websites (to be completed in 2012)
3 interactive service halls build in Anhui, Zhejiang, and Fujian 3 interactive service halls in Shanghai, Jiangsu, and
Gansu (to be built in 2012)
Smart Power
Equipment Testing
Centers
National Smart Grid R&D (testing) center (Beijing/Nanjing)
SGCC smart power consumption testing center (Nanjing)
SGCC metering center (Beijing/Wuhan
Source: SGCC Presentation, Practice of Smart Power Consumption in Chinese Smart Grid, February 8, 2012
9 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
SGCC’s Smart Grid Plan includes a sub-plan for each
subsidiary regional and provincial power company, and
two special topic sub-plans: 1) an R&D plan for key Smart
Grid equipment and 2) a sub-plan for Smart Grid technical
standards.
By 2015, the proportion of installed clean energy power
generation capacity in China is expected to reach 32%.
Zpryme estimates that China will lead the world in the
hydro and other renewable electricity generation,
accounting for 24% (581 GW) of world capacity by 2035.
Moreover, China’s wind generation capacity will grow by
1200% from 2010 to 2035, when it will reach 533 GW.
According to Yimin Wang, Director of Smart Grid for
SGCC, in order to support the nation's wind power
development plan, SGCC aims to integrate 100 million KW
of wind power and 5 million KW of solar power by 2015.
Through 2010, SGCC has invested $6.3 billion to construct
23,200 kilometers of power lines for wind power integration
and integrated over 28.26 million KW of wind power
installed capacity, with maximum overall grid load of 4.2%.
This translates to a two-fold increase each year, for five
consecutive years.
The SGCC’s recent launch of the world’s largest battery –
storing 36 megawatt hours of energy and taking up the
size of a football field –also marks a significant step in
Smart Grid development. The battery, fed by a 100
megawatt wind farm and a 40 megawatt solar farm, is
predicted to increase renewable integration efficiency by
5-10 percent, as it can store energy during peaks in
production and the supply power when demand is
highest. China’s energy storage capacity will only
increase as more of these batteries are built and as
China’s electric vehicle fleet is integrated into the grid.
Within the time frame of the 12th Five-Year Plan, the State
Grid Corporation plans to build a backbone of ultra-high
voltage power transmission infrastructure, connecting
large coal, hydro and nuclear plants, as well as large scale
new energies projects with key load centers, bringing
energy allocation to a new level, and pushing forward
large scale wind power development and usage. Experts
estimate that 100-200GW transmission capacity will be
required for delivering electricity over long distance from
west to east and from north to south in the next 15 years.
The existing grid structure in China, which is primarily based
on 500KV AC and ±500KV DC backbones, is insufficient for
serving the purpose.
Companies are starting to team up with SGCC in order to
get their feet in the door in the developing markets of
China. For example, GE, the Chinese Academy of
Science and SGCC have embarked together on a
Standardization Project in January, 2011. The project
covers electricity charging and discharging technology for
EVs, large-capacity storage systems and network
technology, as well as other related Smart Grid
technology systems. Kandi, a player in the Electric Vehicle
industry, has announced plans to form a strategic alliance
with SGCC.
In conclusion, any company with ambitions to enter or
gain market share in China’s Smart Grid space would be
remiss not to carefully follow the plans and actions of
SGCC.
10 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
SGCC Enterprise Standards Relevant to Power Consumption
figure 9
Technology Area Standard Short Description
AMI
Q/GDW 376.1 Communication protocol between master station and terminals
Q/GDW 376.2 Interface for local communication module of concentrators
Q/GDW 377 Technical specification for security and protection
Smart Consumption
Service
GB/T 50314-2206 Smart building design criterion
Q/GDW Z 620 Functional requirements of smart community; Specification for information exchange interface between
home appliance and power grid; Technical specification for communication interface of smart home
Electric Vehicles
Q/GDW 235 Communication protocol for EV off board charger
Q/GDW 397 Technical requirements of EV off board charging/discharging devices
Q/GDW 400 Technical specification for EV charging/discharging billing devices
Distributed Generation
Q/GDW 480 Technical specification for integration of distributed energy source to power grid
Q/GDW 564 Technical specification for integration of energy storage system to distributed grid
Source: SGCC Presentation, Practice of Smart Power Consumption in Chinese Smart Grid, February 8, 2012
11 Zpryme Smart Grid Insights | March 2012
China: State Grid Corporation of China Profile
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved.
Zpryme Credits Editor
Tibor Sarlos
Managing Editor
Sean Sayers
Research Lead
Stefan Trifonov
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