Smart Grid in China to see $100 Billion Investment as Intermittent Wind Energy Penetration Rises

China is seeing the world’s largest increase in electricity capacity with an average of 2 coal plants being built in one week.The rate of power capacity increase is truly astounding with more than 100 GW capacity being built in a year.Most of the power is using coal energy as a source.However the increasing carbon emissions and shortage of coal production is forcing China to look at different sources of renewable energy.While Nuclear Energy is getting a big boost,Wind Energy has been the fastest growing market in energy.Wind Energy will increase to 50% of the global capacity this year drawing major wind turbine producers like GE,Gamesa,Suzlon.Hydro Capacity is being built again as China is missing its target on energy efficiency.

Increasing amounts of Wind Energy and Solar Energy will require elements of a Smart Grid.Solar and Wind Energy are generated in bursts during different parts of the day which make an intelligent transmission capacity with storage capability essential at higher penetration rates.China’s electricty capacity is going to double in the next 5 years to around 1500 GW from 850-900 GW at present.This will require a huge increase in transmission capacity creating a huge market for electricity equipment giants like Siemens,ABB,Areva and Alstom.China also has the opputunity of creating a a Smart Grid as it builds Transmission Capacity form Scratch.Almost $100 Billion is going to be spent over the next 5 years attracting even IT firms like IBM and Cisco.IBM has already tied up with Chinese cities to roll out a pilot program.Note Smart Grid Technologies are still in their infancy.Chinese investment in Smart Grid will allow development of these technologies giving a huge boost to companies winning Smart Grid Projects in China.The Chinese Market despite its size is a highly competitive market with local companies competing mainly on price.Local companies that are benefiting from the Grid Investment are

Chinese Smart Grid Companies

1. Tianwei Baobian
2. Tebian Electric Appliance
3. Henan Pinggao Electric
4. XJ Electric
5. Changyuan Group.

Firms eyeing gold in China’s smart-grid rollout

These new technologies, known as ‘smart grid’, are estimated to be a nearly $100 billion opportunity over the next five years and would easily exceed the $45 billion China is spending on 3G telecommunications technology over the same period.

With total power capacity set to reach 1,430 gigawatt by 2015 from 874 gigawatt at the start of 2010, China has to figure out how to bring trillions of kilowatt hours of power to more than a billion customers, sometimes over very long distances.

The installation of smart meters alone will be worth $3.1 billion in 2011, up from $2.4 billion this year, according to estimates by the China Electricity Council — and foreign firms are already looking to supply comp

The State Grid, which covers 26 of China’s 31 provinces, said this month it will invest 1.7 trillion yuan on new power routes over the period, laying 337,000 km of new delivery capacity of 110 KV or more and building a system that will be “basically smart” by the end of 2015, pulsing with information as well as power.

China would have to handle as much as 600 GW of renewables by 2020 — and much of it consists of “intermittent” sources like hydro, wind, and solar.