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China letting down renewables revolution

 By Chris Dalby

China’s infrastructure expansion has become the stuff of modern legend. The Qinghai-Tibet railway tops up at 5,072 meters above sea level. The country doubled its installed solar capacity in 2016 alone. It might, therefore, seem odd to believe any ordinary infrastructure problems could stymie China’s monstrous pace of execution… 

However, its drive for renewable energy has hit a snag. In 2016, the country added 34.54 gigawatts of solar capacity and 19.3 gigawatts of wind capacity. While many Chinese states have shared in this drive, much of this expansion has been focused on the country’s rural northwestern areas. States such as Gansu, Ningxia and Inner Mongolia are ideal locations to power the country’s renewables revolution, especially for wind. Sparsely populated, with plenty of available land and cheap labor, these regions have seen wind farms sprout across their landscape. More companies soon entered the fray and dashed westward for China’s wind rush. Yet, a treacherous lesson awaited them. Ningxia is 1,200 km away from Beijing. Xinjiang is over 3,000 km away. While wind farms were being built, critical grid infrastructure did not follow at anywhere near the same pace. For all of China’s enthusiasm at weaning itself off fossil fuels, this situation has led to astonishing rates of wastage.

China’s National Energy Administration estimated in March 2016 that 33.9 billion kilowatt-hours of wind power had been lost in 2015, due to “low utilization efficiency.” This represents 15 percent of the country’s total wind power output at the time. This problem is multi-faceted. It is not merely an issue of a lack of grid infrastructure but also cuts to the heart of wind power’s viability s a long-term solution. By its very nature, wind is an intermittent energy source. Usually, its peaks and troughs do not sync up with the massive power demands of China’s eastern seaboard and industrial heartlands. This poses large safety risks for a grid either not designed to handle this challenge or not large enough to bear the load. As pointed out by the Institute for Energy Research, China ordered its wind operators to stop increasing its wind power four times in five years due to the losses continuing to mount. China is learning from its experience with wind power.

The Qinghai-Tibet railway tops up at 5,072 meters above sea level

In April 2016, these stopgap measures gained a measure of permanence. In April 2016, the government passed a sweeping measure. Local governments in six provinces and regions (Inner Mongolia, Jilin, Heilongjiang, Gansu, Ningxia and Xinjiang) were ordered to no longer approve any new wind projects until grid coverage had been improved. Stocks of wind developers took an immediate nosedive. By the end of the year, they were truly hurting. For Xie Guohui, an analyst at the State Grid Energy Research Institute in Beijing, this is likely to last as stopping new projects does not reverse current overcapacity. “Even though China will not approve new projects, the scale of existing wind power installations is huge, leaving the grid struggling to cope with it,” he explained. “In the best-case scenario, this policy will help China’s wind power curtailment maintain the same level as it was last year.”

On top of that, it is not just about building new electrical lines or giving them a technological overhaul. Power stations will need a makeover. Hybrid renewable power plants pose the challenge of current technology being quickly obsolete. And wind developers cannot even count on subsidies to help them in the lean times after Beijing scrapped wind power subsidies. So who needs to deal with this? That responsibility falls squarely on the shoulders of State Grid, China’s public electric utility and the largest such company in the world. In recent years, State Grid has caught headlines around the world, not for its progress on the home front but for its international expansion. It took over the Philippines’ national grid in 2007. It bought seven Brazilian transmission companies in 2010. In 2012, it bought 25 percent of Portugal’s own grid. While Chinese ownership of areas seen as being key to national security has raised a few eyebrows, State Grid has no plans to stop.

In March 2016, State Grid made its most ambitious proposal to date, a global renewable energy grid, connecting resources across continents and oceans. Aiming for a start in 2050 and an investment cost of $50 trillion, the grid would cater for up to 80 percent of global electricity demand, according to State Grid chairman, Liu Zhenya. At an international energy conference, Liu said that “clean energy is becoming more economical, so the conditions for building global power interconnection already exist.” He added that “smart grids and ultra-high voltage (UHV) and clean energy are the only way to a green, low carbon, economical, efficient and open energy system with sustainable supply.” This ambition, against the backdrop of wind farms sitting idle in northwest China, has led to concerns that State Grid should perhaps narrow its field of vision, at least temporarily.

The idea of UHV is not new. A 2013 plan spoke of 37 lines being built across 89,000 km by 2020, with 11 to be built by 2015 and 19 by 2017. The result fell short, with only eight lines in operation by late 2015. “Curtailment of wind and now solar from the grid, due to a lack of transmission capacity, remains a huge problem. State Grid’s UHV roll-out is not an automatic cure, as provinces will have few incentives to exchange power between them,” Brian Publicover, Asia correspondent for Recharge, a leading renewable energy news site, told Eniday.

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In 2014, Liu outlined a new plan to couple UHV lines with a smart grid. This seemed to address technological and distance problems at once. State Grid wanted 12 lines to specifically link up resources such as wind parks in northwest China with coastal provinces. But while State Grid put a price tag of 210 billion yuan ($33.7 billion) on it, other estimates warned the final bill might triple. At the time, this was targeted at cutting China’s coal consumption. It ran into political trouble in a country where the coal lobby remains influential and quickly petered out. Despite this opposition, the plan’s essentials would seem to still stand on their own merit.

China is facing an almighty bottleneck. Its electric grid must continue to expand and modernize somehow. Its total power generation capacity is expected to hit 2,073 GW by 2020. “The grid, as it exists, now is old and not particularly responsive compared to the grids in other more developed markets,” commented Publicover. While western provinces have been told to suspend new wind projects, it’s not like their usual economic mainstays are picking up the slack. Coal production is heavily frowned on by a Communist government keen on clearing the pollution choking its cities. The country’s track record suggests a solution to this infrastructure problem will be found. Labor and capital are two things China is not lacking. The economic expansion of the wind industry is also not something Beijing is likely to dismiss. But either way, State Grid is going to be kept busy for the foreseeable future.

SEE MORE: China’s renawable revolution by Nicholas Newman

 

about the author
Chris Dalby
Journalist. Editor. China, Mexico, Latin America, Asia, place branding, Olympics, oil and gas, mining, renewable energy, international politics.