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2008 Report on China's Power Grid Construction
Market Avenue, Oct 2008, Pages: 61
Although Chinas general electricity generation has been increasing by more than 10% almost every year since 2000, the construction of power grids have been unable to satisfy the demand for power. The annual growth rate of Chinas investment in grid construction has often been single digit, and in some years it was only 2%. As a result, there have been frequent blackouts along Chinas coasts since 2002.
To make power grids safe and to improve the efficiency of power transmission, Beijing started paying great attention to the construction of a state grid since 2006. According to the countrys 11th 'Five-Year Plan', RMB1,200bn would be invested in grid construction from 2006 through 2010, which means that the average yearly investment is more than RMB240bn, 90% more than in the 10th 'Five-Year Plan' period.
One of the major problems for Chinas power industry is that the best resources for power generation are often in remote regions, far from most power consumers. Data show that more than two-thirds of the developable hydropower is in the mountainous Tibet and surrounding areas such as Sichuan and Yunnan provinces, while two-thirds of minable coal resources are in Shanxi, Shaanxi, and Inner Mongolia. To deal with the problem caused by geographic distribution of resources, Beijing prefers to build a UHV power grid, with which power could be supplied in large quantity to distant places without too many cables. Consequently, trans-regional UHV power grids would be the focus of this round of construction. The investment by China from 2006 through 2020 in UHV power grid is expected to be RMB406bn, out of which RMB256bn would go to AC grid and RMB150bn DC.
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