Analysis: To tackle climate change, China must overhaul its vast power grid

Seamless Green China (Holdings)

19/05/2021 08:17

* China to peak carbon emissions by 2030, neutral by 2060
    * Pledge could have major impact on global warming
    * Upgrading China's electricity grid is a major hurdle  

    By Muyu Xu and John Geddie
    BEIJING/LONDON, May 19 (Reuters) - One of the most pressing
challenges for China to meet its pledge to cap carbon emissions
this decade and pivot toward renewables is overhauling its
electricity grid, the world's largest, officials and analysts
say.
    Beijing's surprise announcement last year that it would hit
peak emissions by 2030 and become carbon neutral by 2060 could
presage the biggest reduction in projected global warming of any
climate commitment to date, researchers say.  urn:newsml:reuters.com:*:nL3N2GK3I9
    But building new solar plants and wind farms is the easy
part, analysts say. Upgrading the system that transmits that
green power to faraway consumers could be five times more
costly, and depends on rapid technological progress.
    "When we talk about the challenges, most people focus on the
(electricity) grid," said Chunping Xie, an expert on China's
policies on climate change and energy at the London School of
Economics and Political Science. "It's the first step in this
long journey."
    Investments in China's grid and other associated costs are
expected to exceed 6 trillion yuan ($896 billion) over the next
five years, Mao Weiming, former chairman of State Grid, said in
a speech in October.
    China, the world's biggest electricity generator, power
consumer and carbon emitter, has said it is aiming for renewable
power to account for more than 50% of its total electricity
generation capacity by 2025, up from 42% now. 
    This mainly involves pivoting to solar and wind energy and
away from coal, of which China is the biggest global consumer.
Beijing plans to more than double its solar and wind power
capacity to 1,200 gigawatts (GW) by 2030, from 535 GW now.  
    Such a drastic swing from coal, which generates a stable
baseload power supply, to renewables, which can fluctuate with
weather conditions, could play havoc with China's electricity
network, officials say.
    A senior manager in charge of dispatch at China's State Grid
 STGRD.UL  - the world's largest utility, which manages 75% of
the country's network - told Reuters the system had already
"reached its ceiling" of how many renewable sources it could
handle and still maintain stable operations. The official asked
to remain anonymous as he is not authorised to talk to the
media.
    But China, which runs the world's largest power system, with
a total installed capacity of 2,201 GW compared with 1,107 GW in
the United States, is pressing on. 
    By 2030, it has said it will force grid operators to buy at
least 40% their of power from non-fossil fuel sources, up from
around 28% now.
    
    MAJOR COSTS
    Alex Whitworth, a research director at Wood Mackenzie, said
that the pace of grid investment would most likely be maintained
until the end of the decade, and would be five times higher than
the cost of building additional renewable plants in that period.
    The major costs involve new power lines, re-tooling hundreds
of coal plants as backup generators, and ramping up storage
capacity, analysts and officials say.
    At least seven new ultra-high voltage power lines would be
built over the next five years to better connect the country's
far western regions, where solar, wind and hydropower plants are
mainly located, to China's big cities, the State Grid said.
China has 29 such lines already.
    That buildout could cost an estimated $34 billion. 
    "We have reached a consensus that China will preserve coal
plants, but only for emergency uses," said Shu Yinbiao,
president of Huaneng Group, China's second-largest power
generation firm, and a former State Grid president. 
    But China is struggling to promote costly modifications to
coal plants allowing them to offset gyrations in renewable
power. It typically costs 150 million yuan ($23.27 million) to
upgrade a 300-megawatt coal plant. 
    Only about 10% of coal-fired power plants in China have been
modified, according to data from State Grid and China
Electricity Council.
    "China will need to establish a mechanism to make coal power
unfavourable in the renewables' booming moment," said Zhang
Shuwei, a director at Draworld Energy Research Centre.
"Otherwise China is not able to advance its green agenda."
    
    TECH PROBLEMS 
    Power storage is another obstacle.
    Bing Han, a senior research analyst at IHS Markit, expects
China to need about 120 GW of energy storage to support
additional solar and wind power needs by 2030. That is four
times more than the 32.3GW capacity in place as of 2019,
according to China Energy Storage Alliance.
    For battery storage, Wood Mackenzie's Whitworth said China
is expected to install 47 GWh by 2030, more than four times the
total global storage capacity today.
    But it is not just a question of cost. Chinese officials
have said they are worried about slow technological
developments. 
    "Power storage technology has not realized revolutionary
progress," said Li Gao, director of Climate Change Department at
the Ministry of Ecology and Environment at a media briefing in
April.
    Michal Meidan, director of the China Energy Programme at the
Oxford Institute for Energy Studies, said "geopolitical
tensions" and "technological rivalry" between China and Western
countries could also hinder the collaboration needed to improve
Beijing's storage capacity. 
    "It's not to say China cannot innovate, but it could take
longer until China has its home-grown innovation," she said.
    Other analysts questioned China's commitment to renewable
power plans given its lack of clarity on phasing out coal and
continued expansion of new power plants. China put 38.4 GW of
new coal-fired power capacity into operation in 2020, more than
three times the amount built elsewhere around the
world. urn:newsml:reuters.com:*:nL4N2K81R0 urn:newsml:reuters.com:*:nL1N2LR0BN
    But all agreed tackling the power system is an essential
first step of a project critical to the future of the planet.
    "The world just can't achieve climate targets without
China," said LSE's Xie. "China's role in the world is now of a
magnitude that makes its actions in the immediate future
critical to how the world goes forward."
($1 = 6.4463 Chinese yuan renminbi)

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China's power system    https://tmsnrt.rs/2RiT3P9
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 (Reporting by Muyu Xu in Beijing and John Geddie in London,
additional reporting by Nina Chestney in London; Editing by
Gerry Doyle)
 ((muyu.xu@thomsonreuters.com; +86 10 56692117;))