By Dr ML Chan, PhD, China Executive Director of Smart Grid Cooperative, JUCCCE, China, and Vice President, Asia Business Development, Quanta Technology, USA

China is ready! Having deregulated the generation market and reorganised the industry into State Grid and South China Grid, China has invested heavily in ultra high voltage (UHV) transmission grid. Now that this national treasure of UHV transmission grid is close to completion, China is ready to focus her attention on Smart Grid. As a matter of fact, State Grid Corporation of China, the ultimate authority on the electric power delivery grid, is getting ready to announce her support for Smart Grid in late May.

A Smart Grid is an overlay of information technology (IT) on electric power grid. The resulting electric grid will possess high visibility; utility system operators will know precisely what is happening on the grid, how healthy the grid assets are and how to operate the grid so that it is efficient and carbon friendly. By using communications infrastructure, utility operators enhance system and economic efficiency (in O&M and capital investment), improve system reliability and integrity, efficiently utilise renewable generation resources, and become environmentally sustainable operations. These constitute the main business drivers for Smart Grid.

The major characteristic of Smart Grid is the cross fertilisation of data, which made possible the availability of business intelligence for making better planning and operation decisions for the electric grid. Such business intelligence would not have been available prior to the implementation of Smart Grid. The reason is that the database would have been inaccessible either because people did not know about its availability, or because the data were not readily available in digital form. With Smart Grid, for instance, an operator knows instantly those customers that experience service disruptions, the causes for the disruptions, the automatic switching actions to restore services if feeder reconfiguration could resolve the fault on the line, or the precise locations for dispatching crews to repair the faulted equipment.

Smart Grid covers all three sectors of the grid – transmission, distribution and customer sectors. In China, State Grid Corporation of China (SGCC) has constructed an infrastructural backbone for the bulk power grid. SGCC also leads the world in deploying synchrophasor measurement unit (PMU) systems. China is leading the world in this Smart Grid application. It provides an extremely high degree of system reliability and security to the transmission grid, especially in light of the need to accommodate the resource intermittency associated with the proliferation of wind and solar PV farms at remote areas.

At distribution systems, China is lagging behind the utilities in developed nations such as the US, Europe and HongKong/ Singapore. Grid automation is not prevalent. That includes feeder automation for system reliability improvement and integrated volt/var control functions to enhance system efficiency. AMI systems are not commonly installed to provide the computer and communications infrastructure that can support these distribution automation functions.

At the customers’ end, no full-scale AMI systems are deployed. This makes it very hard to implement demand response programmes, where customers can modify their energy usage in response to real-time pricing of electricity. It also does not readily integrate dispersed renewable and PHEVs.

To realise the full benefits of Smart Grid, China needs to focus on the distribution and customer sectors. It is quite apparent how Smart Grid should be best implemented at distribution systems. Installing distributed intelligence local control systems for feeder switching, Distribution Management Systems, asset condition monitoring, and distribution automation functions do not require substantial social infrastructural changes. There are clear business cases for distribution utilities to pursue Smart Grid.

However, for the customer sector, China needs to address major policy changes before she can fully realise the benefits from Smart Grid. Three factors are at work. First, the electricity tariff should reflect its time varying nature. In other words, the energy market should be healthy to encourage full competition.

The electricity price should also reflect congestion that might occur at different transmission lines. Second, customers should be sufficiently educated to change their energy usage in light of time-varying electricity prices (i.e., real-time pricing). Currently that culture does not exist in China, partly because the true cost-of-service for electricity has not been incorporated into the postage stamp rates.

Third, the implementation of Smart Grid has to include rural villages and communities. It should not be limited to cities. Currently, cities are “crowded, flat and hot”, suffering from all the problems that come with being overcrowded. Cities simply cannot continue to absorb the constant influx of rural folk; it is not sustainable. Rural people go to cities to look for jobs because many villages have very limited, and unreliable, electric service. These villagers do not get to be educated as city folk do because they do not have sufficiently reliable electric supply. They do not have easy access to the Internet for higher distance learning. They do not gain aspiration as to what they want to do. They do not see much prospect for living in their villages. They aspire to go to cities and make higher incomes than they can get in their villages. Yet what they get in cities are low paying jobs that do not contribute as much to China’s GDP on a per capita basis; they end up working as waiters and waitresses (or fuwuyuan) in restaurants, because they do not have good education. Their influx to cities further congest cities to the point that it is simply not sustainable in the long run.

To provide a solution to this downward spiral, Smart Grid should be embraced in the rural areas. Through Smart Grid, villages can become essentially net zero energy communities. The communities can incorporate renewable resources (e.g., biofuel, wind and solar PV), energy efficiency, energy storage, PHEVs, to enjoy highly reliable electric services. Villagers can enjoy better health, and more highly educated resources can be produced. Entrepreneurs can decide to take advantage of these resources (e.g., human resources and highly reliable electricity) to build data centres at villages, thus offering high paying employment opportunities near where villagers live. Income levels at villages would rise, and villagers would not have the desire to flood the cities. In addition, the national asset – the ultra high voltage transmission lines from the west to east – will be preserved; it will not need to be tabbed as the primary vehicle to supply electricity to all the villages along its way.

Meanwhile, the practical implementation of Smart Grid in China will mostly likely occur in several stages. The transmission grid has already embarked on its journey on Smart Grid. Advanced application programmes to mine the data from synchrophasor measurement units (PMUs) will emerge. More PMUs will be installed. The transmission grid will be planned and operated optimally and reliably to accommodate the intermittent renewable resources of wind and solar farms.

Next, China will focus on Smart Grid for the distribution systems. This is where it is at now. Distribution utilities will use Smart Grid technologies to improve their operational efficiency, enhance their system reliability and power quality, reduce their carbon footprint, integrate renewable resources and PHEVs, and optimise their capital investment.

Concurrently, China will also begin to examine how to include the customers into the electricity market so as to implement Smart Grid at the customer sector. This will be a longer journey than the distribution sector’s. It is going to involve re-examination of the electric market design and to introduce the concept of real-time pricing tariff to customers. Therefore, AMI systems in their fullest sense may not be implemented in the immediate future. But the integration of renewable resources (e.g., rooftop solar PV and micro-wind turbines as part of distributed energy resources, DER) and PHEVs at the customer level will begin soon. This will require utilities to interface with building energy management systems that might be supplied by energy service companies (ESCOs) in cities. Of course, distribution utilities will also need to design programmes to attract ESCOs to deliver these resources.

It should be noted that the communications infrastructure in cities is usually ready – every apartment unit in high rises has access to broadband internet. Prepaid meters for different utility services are the norm. Thus, the challenges that face the AMI implementers in US, Canada, Europe, Australia and other developed countries may not be as daunting.

Enabling technologies are critical to the success of Smart Grid vision. They include advanced sensors (e.g., micro-processorbased devices such as AMI meters, intelligent electronic devices, IEDs), enterprise IT systems for integrated data management, communications infrastructure to support all the data transfer, and a holistic culture within utility companies (i.e., no more departmental silos). These technologies can be shared by different Smart Grid applications.

This is especially the case for implementing Smart Grid at the distribution systems and eventually at the full customer level. Therefore, while unlikely to implement the full portfolio of customer-focused AMI systems in the near term, China utilities will most likely need to pursue all these enabling technologies now to attain their Smart Grid vision, and in the process prepare themselves for the ultimate, full Smart Grid that includes customers.

The Smart Grid is critical to the economic boom of China. It will induce much investment by the China private sector. It will create many jobs. It will enhance GDP growth. It will significantly reduce the carbon footprint. It will make China the leading electric grid in the world. Above all, Smart Grid implementation will also greatly benefit the world. China’s market power will quickly resolve the interoperability issue – ability for devices to communicate data with one another and to provide electrical standard outputs/inputs. It will also improve the economics of Smart Grid since the cost of products will most likely be drastically reduced, again because of the inexpensive production cost in China and impact on competition. Let us help make it happen in China!