Smart Grids Open Up New Opportunities

Chinese Government Recognizes Importance of Smart Grid Development

Traditionally, the electric power system is structured in a chain of distinct, sequential phases from generation, transmission, transformation, distribution, to consumption. Comparatively, the ring structure of an ICT-based, integrated smart grid allows the functions of each phase to be changed as directed by transmitted information and service flows.

In August 2016, China’s State Council issued the 13th Five-Year National Science and Technology Innovation Plan (2016-2020). The Plan calls for the accelerated implementation of major national scientific and technological projects to meet goals set for 2030. The Plan states that China should lead in making strategic breakthroughs in fields, such as: Aircraft engines and gas turbines; deep-sea stations; quantum communications and computing; brain science; cyberspace security; deep space explorations and spacecraft maintenance systems; seed industry innovation; clean and efficient coal use; smart grids; integrated space-terrestrial information networks; Big Data; smart manufacturing and robotics; healthcare; new materials research, development, and application; and environmental governance in the Beijing-Tianjin-Hebei region.

In July 2015, the Guiding Opinions on Actively Promoting the ‘Internet Plus’ Action Plan, promoted by the State Council in China, put forward specific ‘Internet Plus’ smart energy actions. Key initiatives included smart energy production, distributed energy networks, new energy consumption modes, and new communications facilities for smart power grids. Guided by this action plan, China would set up green electricity transaction service areas, advocate intelligent energy use among consumers, promote Power Fiber-To-The-Home (PFTTH), optimize the information communications system for Energy Internet, and encourage new businesses such as household energy efficiency management that rely on smart power grids. A specific priority is the development of green energy networks that integrate energy storage facilities, the Internet of Things (IoT), and intelligent electricity consumption facilities as well as derivative services such as carbon trading and Internet finance.

China has two major power grid companies: State Grid Corporation of China (SGCC) and China Southern Power Grid Co., Ltd. (CSG). SGCC has a customer base of over 1.1 billion, while CSG serves a population of over 230 million. SGCC and CSG ranked No. 2 and No. 100, respectively, in the 2017 Fortune Global 500. Leading ICT vendors such as Huawei have played a vital role in making power grids smarter and more digital, and made great contributions to the thriving smart grids.

Modernizing the electric power system constantly reinvents the traditional electric power system using ICT technologies. In China, power grids are endlessly evolving from the earliest manual dispatching, to automated dispatching, to the current smart grids, and even to the future Energy Internet.

SGCC’s Practice for Smart Grids

Over the past decade, a new era of ICT technologies represented by cloud computing have played a key role in China’s transformation to smart grids. Proof of this can be illustrated by how SGCC has experienced dramatic changes from 2006 to 2016 (see figure below). By using ICT technologies and smart grids, SGCC reports a decrease in line loss rates from more than 8 percent in 2006 to less than 6.3 percent in 2016. 

SGCC’s investments in grid digitization also keep increasing year after year. From 2016 to 2020, SGCC plans to invest USD 54 billion in grid digitization, accounting for 18 percent of the total power grid investments. An important portion of these ICT investments is expected to cover smart meters, the Internet of Things (IoT), and Internet infrastructure.

As of June 2017, approximately 430 million smart meters were deployed in SGCC’s Advanced Metering Infrastructure (AMI). A hybrid network architecture, including optical fiber, wireless, and wired connectivity, was installed to centrally manage and collect data from these smart meters. SGCC is now the world’s largest user of smart meters. Nationwide, SGCC can easily understand the consumption details of enterprises and residents and properly arrange electricity loads for stable power supply. For the coming Energy Internet, consumers will monitor and control each household appliance in real time, as well as understanding the history of household electricity consumption.

In China, the ‘Internet Plus’ Action Plan as well as cloud computing and Big Data strategies are being implemented at an accelerated pace — and ICT technologies are a core driving force to upgrade traditional industries and propel emerging industries. After two Five-Year Plans (2006 to 2010 and 2011 to 2015), SGCC set up a 3-city data center and integrated information platform to pave the way for building a corporate-level information system with a solid foundation for creating an integrated IT resource cloud.

In April 2017, SGCC officially launched an ‘SGCC Cloud’ that is built on an SGCC Cloud platform (or cloud platform) with various supporting applications. The SGCC Cloud consists of the Enterprise Management Cloud, Public Service Cloud, and Production Control Cloud (called ‘three clouds’).

The Enterprise Management Cloud targets resources and services such as analytics, decision-making, and general management. The Public Service Cloud deals with extranet resources and services, including marketing, customer service, and eCommerce. The Production Control Cloud handles resources and services for operational control and management.

The cloud platform behind the three clouds centrally manages IT resources, including facilities, data, services, and applications. Benefits include better information storage, transmission, integration and sharing, higher levels of service integration, faster application rollouts, better user experience, and more reliable system operation.

The SGCC Cloud is deployed in the 3-city central data center and 27 provincial (municipal) data centers. In 2016, SGCC started the trial use of the Enterprise Management Cloud and the Public Service Cloud in its headquarters and nine local power companies. During the trial use, the cloud platform components were deployed, and as many as 12 types of applications such as line loss and integrated team management were migrated to the cloud.

During the duration of 13th Five-Year Plan (2016-2020), SGCC will finish building the SGCC Cloud. Specifically, SGCC will train an expert team to master the core technologies of cloud computing to accelerate new service innovation, flexible resource allocation, smarter use of data, more efficient service integration, and accelerated application development, taking SGCC’s IT usage to new levels.

Embracing the Energy Internet of the Future

According to the Guiding Opinions on Actively Promoting the ‘Internet Plus’ Action Plan issued by China’s State of Council, Energy Internet will be a hot topic over the next decade by using an Internet mindset to make energy networks as open, equal, shareable, and interactive as the Internet. Analogous to Local Area Networks (LANs), Wide Area Networks (WANs), and backbone networks, the Energy Internet has three levels: Home Energy Internet, City-wide Energy Internet, and Global Energy Internet.

Home Energy Internet — specifically Home Energy Management Systems (HEMS) — help to easily understand the electricity use of household appliances, and properly monitor and utilize various energy resources such as water, electricity, gas, and heat. City-wide Energy Internet efficiently and appropriately allocates various energy resources across entire cities for maximum emission reduction and energy conservation. Global Energy Internet connects energy networks around the globe. All the three levels of Energy Internet are impossible without advanced ICT technology support.

Home Energy Internet: In accordance with files such as Guiding Opinions on Promoting the Development of ‘Internet Plus’ Smart Energy and the Notice on Organizing and Implementing Pilot Projects of ‘Internet Plus’ Smart Energy (Energy Internet), the National Energy Administration in China takes charge of the application, review, and approval of pilot projects related to ‘Internet Plus’ Smart Energy (Energy Internet). The first batch of pilot projects is now underway. Centralized data collection from water, electricity, gas, and heat meters was implemented for approximately 2.6 million users by the end of June 2017. At present, many companies in China have begun pilot projects for Home Energy Internet. Examples include a fiber optic network based on the existing power distribution network, and routing the Optical Fiber Composite Low-voltage Cable (OPLC) from the distribution room in the community to the in-building distribution box, and then to the household. All these pilot projects pave the way for deeper use of ICT technologies on power grids. As of June 2017, these pilot projects had covered approximately 20 million users and created high-speed communications channels for better home energy management and Internet usage. In particular, Liaoning Electric Power Company of SGCC has undertaken China’s key project to research and try key technologies for Power Fiber-To-The-Home (PFTTH). Currently the project is running smoothly. Upon completion, home users will benefit from a transmission speed of up to 1 Gbit/s.

City-wide Energy Internet: With the growing popularity of smart cities, City-wide Energy Internet is starting to gain momentum. In the pilot City-wide Energy Internet project in Tianjin City, electricity generated from enterprises rather than traditional power plants is incorporated into the electric power grid along with photovoltaic, solar, and geothermal heat. These enterprises have deployed a special system to monitor power generation, allocate electricity among office buildings and other areas, and understand the operating details of different power generation modes and energy storage. Electric power flow, service streams, and information flows are converged to achieve the desired interconnection results. For example, Jiangsu Electric Power Company of SGCC has been selected to research a friendly, interactive supply-and-demand system between urban users and power grid. Upon completion of this project, the overall energy consumption of urban users will go down by over 5.5 percent, and the peak-valley load difference of electricity usage will be decreased by over 5.8 percent.

Global Energy Internet: In September 2015, President Xi Jinping delivered a speech titled “Seek Common and Sustainable Development and Forge a Partnership of Win-Win Cooperation” at the UN Sustainable Development Summit, in which he stressed that China’s proposed global energy network would meet the global power demand with clean and green alternatives. In May 2017, President Xi delivered another speech titled “Work Together to Build the Silk Road Economic Belt and The 21st Century Maritime Silk Road” at the opening ceremony of the Belt and Road Forum (BRF) for International Cooperation in Beijing in which he urged his audience to capture opportunities presented by changes in the energy mix and the advancements of energy technologies to develop global interconnections and achieve green and low-carbon footprints. The scope for Global Energy Internet lies in the fields such as wind power, photovoltaic, and thermal power generation. Countries along ‘One Belt, One Road’ often experience energy shortages, which seriously constrain their further growth. If China’s advanced technologies and equipment can be exported to these countries, this will help accelerate energy transportation between countries, building a solid basis to boost economic growth. The Global Energy Interconnection Development and Cooperation Organization (GEIDCO) initiated by SGCC has been set up in China. Of GEIDCO’s first 17 board members, Huawei is the only ICT solutions provider. With its leading expertise, Huawei is dedicated to providing strong ICT support for global energy management characterized by better connected global energy backbone networks and space-air-ground integrated networks.

Digital transformation has started to disrupt and change electric power systems. ICT technologies have become the ‘nervous system’ of power networks. New energy sources and energy storage technologies (for coal, oil, gas, water, and nuclear) are developing; and new-generation ICT technologies such as cloud computing, Big Data, the IoT, and mobility are helping to increase energy utilization. The electric power system will transform to smart grids and Energy Internet in the future, and the convergence of ICT and smart grids will grow faster over the next decade to create unparalleled opportunities for enterprises and the entire electric power industry. A better future is awaiting us.