2012 China Smart Grid Construction Investment Outlook

Transcription

1 SGT Insights. January 30, China Smart Grid Construction Investment Outlook Lihui Xu Jochen Alleyne SGT Research SmartGridTimes&Consulting SGT Insights China Smart Grid Construction Investment Outlook

2 Executive Summary Following China s three stage smart grid plan (Table 1.1) gradual deployment, China s smart grid construction investment enters into a large scale phase in Table 1.1 Segment Stage 1 ~ ( ) Stage 2 ~ ( ) Stage 3 ~ ( ) China s Three Stage Smart Grid Plan planning & trial phase full-scale construction phase leading & enhancing phase Target To establish master plan, carry out key technology research and key equipment development, and proceed with demonstration projects. To formulate standards and requirements for strong and smart grid, to evaluate construction progress based on the needs and technical development of smart grid, continuously amend development plan, and construct smart grid in fullscale. To evaluate the construction of smart grid in fullrange, further enhance the capability of China s strong and smart grid in an all-around way, based on application needs and technical development. (Source: State Grid Corp. of China) In 2011, the State Grid Corporation of China s (SGCC) fixed assets investment rose to RMB billion yuan (US$52.37 billion), up 13.5 percent from the same period last year. The power grid investment was RMB billion yuan (US$47.87 billion), an increase of 14 percent from the same period last year. In 2012, SGCC is expected to complete the fixed asset investment of RMB billion yuan (US$53.3 billion), with a power grid investment of RMB billion yuan (US$49.11 billion), an increase of 2.58 percent. China Southern Power Grid Co., Ltd. (CSG) will invest RMB 100 billion yuan (US$15.85 billion) in the smart grid construction. Most of the investments will go to two main fields, power transmission construction (including Ultra High Voltage projects) and power grid upgrading in rural areas. Current Situation In 2012, SGCC is speeding up smart grid construction, especially Ultra High Voltage (UHV) projects. Huainan-Shanghai UHV AC (Alternating Current) project will be starting the invitation to tender in Q Hami-Zhengzhou ±800 UHV DC (Direct Current) project has received permission to deploy from the National Development and Reform Commission (NDRC). Ningdong-Zhejiang UHV DC project has received approval by the National Energy Administration (NEA) for preliminary work. The power grid upgrade projects for rural area this year is at a crucial stage. Based on the previous deployment from NDRC, the State Grid investment of RMB billion SGT Insights China Smart Grid Construction Investment Outlook - 2 -

3 yuan (US$7.74 billion) for rural grid upgrading works will be ended by The problem of 96,000 households with a population of 400,000 without electricity will be solved after the upgrade is completed. Therefore, the rural power grid upgrading task in 2012 would be exceptionally heavy. In 2011, SGCC deployed million smart meters. SGCC plans to finish 37 million smart meter installation this year, meaning the amount of smart meter installations will drop by percent from the same period last year. At present, China is at a stage of rapid development of industrialization and urbanization. China's electricity demand is expected to continue to grow rapidly at a rate of 8.5 percent annually over the next two years. However, a tight power supply will occur again this year due to increasing demand and stagnant growth in new power plants. The maximum load of the State Grid region is expected to reach 635 million kilowatts and the power shortage during the summer peak period will reach 49 million kilowatts. The maximum shortages from North China, East China and Central China Power Grid respectively are 10 million, 25 million and 14 million kilowatts. Jiangsu Province and Zhejiang Province account for 17% of the maximum load with shortages of 13.4 million and 9.3 million kilowatts. China Southern Power Grid (CSG) also revealed at the 2012 Southern Power Grid power supply and demand situation symposium that the whole power network in its region will continue shortages throughout the year due to flood season and insufficient generating capacity. The maximum shortage is between 8 million to 14 million kilowatts during the summer peak period. The biggest shortage is at Guangdong Province. Chinese power grids location by region refers to the following Map of China Power Grids (Figure 1.1). SGT Insights China Smart Grid Construction Investment Outlook - 3 -

4 Figure 1.1 Map of China Power Grids (Source: State Grid Corp. of China) Regarding smart substation, the construction requires major investments as it involves a large amount of equipment and application of high-end technologies. SGCC gave special emphasis to the construction of smart substations at its mid-year capital construction conference. The 74 pilot smart substations which are part of the first two phases of State Grid s pilot programme have completed the bidding process, and 20 smart substations are already operating. The construction of additional smart substations is expected to continue at an accelerated pace over the next several years. Regional Smart Grid Construction Investment China has two state-owned power grid companies. One is the State Grid Corporation of China (SGCC), the other is the China Southern Power Grid Company Limited (CSG). Headquartered in Beijing, SGCC is the largest state-owned electric power transmission and distribution company in China as well as in the world. SGCC s power network operation covers 26 provinces, autonomous regions and municipalities with subsidiaries of North China, East China, Central China, Northeast China and Northwest China. SGT Insights China Smart Grid Construction Investment Outlook - 4 -

5 CSG is the second large state-owned enterprise in China. Its distribution covers China's five southern provinces including Guangdong, Guangxi, Yunnan, Guizhou and Hainan. CSG is headquartered in Guangzhou, Guangdong Province. The following Map of China (Figure 1.2) shows the location of Chinese provinces by region. Figure 1.2 Map of China (Source: SGT Research) SGT Insights China Smart Grid Construction Investment Outlook - 5 -

6 The table below (Table 1.2) indicates each province and city smart grid construction investment. Table 1.2 List of Chinese Provinces Smart Grid Construction Investment In 2012 Power Grids Provinces & Cities Investment (billion yuan) Beijing Tianjin 5.79 North China Hebei 8.5 Shanxi Shangdong Shanghai Jiangsu 6 East China Anhui Zhejiang Fujian 20 Hubei 12 Hunan State Grid Crop. of China Henan Central China Jiangxi Sichuan 26 Chongqing 9.3 Heilongjiang Northeast China Liaoning Jilin Shangxi Ganxu Northwest China Qinghai Ningxia 2.5 Xinjiang Xizang 2.88 China Southern Power Grid Guangdong 25.2 Shenzhen Guangxi 6.68 Hainan 2.21 Yunnan Guizhou 15 (Source: State Grid Corp. of China) SGT Insights China Smart Grid Construction Investment Outlook - 6 -

7 About SGT Research SGT Research is a global market research and advisory firm serving the smart grid industry value chain including electric power infrastructure, renewable energy, clean technologies and capital investment. SGT Research provides strategic consulting services including analysis of market drivers, business models and technology trends for smart grid development. SGT Research also provides market entry services for smart grid firms seeking opportunities in China. With SGT Research s local and international experience, clients will have added competitive advantages of bringing high-value products and services to the Chinese market faster. Canada 305A, McMaster Innovation Park, 175 Longwood Road South, Hamilton, Ontario L8P 0A1 ca@sgtresearch.com T: (Toronto) F: Boston us@sgtresearch.com T: Beijing 5F, Building B, S.P. Tower, Tsinghua Science Park (TusPark), Beijing, China, bj@sgtresearch.com T: SGT Insights China Smart Grid Construction Investment Outlook - 7 -