March 5, 2010 - China plans to spend much more than the U.S. or Europe on building out its grid to meet its massive population’s growing energy needs. Projections for China’s budget on smart grid spending is over $7 billion, compared to the US Department of Energy’s projection of $4.5billion.  

On Thursday, IBM announced details of various pilot projects underway with China’s massive government-owned utility, State Grid Corporation of China and other partners. Those projects range from managing the flow of power from nuclear plants and massive wind farms to transmission and distribution grids to managing energy efficiency down at the consumer level, including electric vehicles.

“We’ve expanded from smart grid, to look at the energy value chain, from the supply source all the way down to the consumer source,” is how Bradley Gammons, IBM’s vice president of energy and utilities sales and distribution, put it to us in a phone interview from Beijing. In particular Gammons said that IBM has been looking more closely at the consumer and the role the consumer will play as a dispatchable demand response resource as they adopt electric vehicles. 

Smart grid industry watchers will be interested to see which companies IBM partners with. The Chinese government requires that its wind power projects have at least 70 percent made-in-China components, and observers have noted that State Grid and other massive government-owned utilities will be making similar pushes to help domestic companies get a piece of the smart grid pie.

Gammons noted that State Grid has already announced technology standards for manufacturers who want to build some of the 170 million smart meters it wants to deploy over the coming years. While U.S. smart meter makers Itron and Echelon are possibilities,  major Chinese meter makers such as Jiangsu Linyang, Sanxing Technology and Wasion are also possibilities.

One thing’s for sure—whatever China does in smart grid, it’s going to do in a big way, whether it’s with the help of the likes of IBM and GE, or with its own home-grown industry. While the United States is expected to invest some $36 billion in renewable energy in the next 10 years, China is projected to spend $208 billion, according to the International Energy Agency.

As for smart grid, the Department of Energy has directed some $4.5 billion toward smart grid projects to take place over the coming years, while in China, government spending on smart grid-related technologies was to reach over $7billion this year alone.