Is China’s UHV network working?

Utilisation of China’s ultra-high-voltage (UHV) power transmission lines, designed to send excess electricity in remote interior regions to coastal centres battling worsening air pollution, has been lower than expected, according to analysts.

The high-capacity UHV lines, more efficient and economic for long-distance transmission, are expected to cost state-owned State Grid Corporation more than 600 billion yuan (HK$711 billion) to build until 2020. But they’ve also turned out to be no panacea for the nation’s renewable power distribution bottlenecks.

“Utilisation of the UHV lines remains below expectations [due to] many factors … such as the performance of connected generation plants, constraints in the local power grids, [hydro power resource] conditions, as well as [power] demand conditions,” Hu Xinmin, senior manager at Hong Kong-based industry consultancy The Lantau Group, said in a report.

“As such, efficiently coordinated planning of grid and generation [capacity], under changing economic and regulatory conditions, will become even more important to ensure better utilisation of fuel, environmental and capital resources.”

Citing figures from State Grid, which has a power distribution monopoly in all but five southern regions in mainland China, he noted its first three UHV lines, commissioned between 2009 and 2012, had reached capacity utilisation of only 21 per cent to 56 per cent in 2014.

China is the first nation with the stated ambition of using UHV power lines as the “core” to inter-connect its regional power grid networks into a “strong and smart” national network, a strategy championed by State Grid around a decade ago.

To meet this original 2020 target, China would need to more than double its UHV development effort, which seems unlikely given the challenges.

In 2009, State Grid officials said it had “fully grasped the core technology” of UHV power distribution, and planned to plough some 600 billion yuan into UHV lines by 2020.

In 2013, it outlined an eight-year plan to build 37 UHV lines totalling 89,000km by 2020, of which 11 would be built by the end of last year, and 19 by the end of next year.

By the end of last year, only eight lines with a total length of 11,900km were in operation.

“To meet this original 2020 target, China would need to more than double its UHV development effort, which seems unlikely given the challenges,” Hu wrote.

He said the slower-than-planned progress was due to a likely divergence in views between the National Energy Administration (NEA), the sector’s regulator, and State Grid on the desired degree of inter-connection between regional grid networks, slowing power demand growth, planning delays and system integration challenges.

Judging from the pattern of project approvals, he said the NEA seemed to prefer strengthening regional grids at this stage rather than inter-connecting regional grids as originally planned by State Grid, due to reliability risks.

“State Grid’s vision to synchronise regional power grids is almost certainly not being taken seriously,” he said, adding the United States also had “virtually no prospect” of fully integrating regional grids since costs outweighed benefits.

Dennis Ip, head of utilities and renewables research at Daiwa Capital Markets, said in a report that rapid deceleration in China’s power demand growth and rising power generation overcapacity had also played a role in delaying the progress of UHV lines expansion, with local governments in consumption centres cutting power imports to protect local power plant operators suffering from falling utilisation.

Wind and solar farm operators’ hopes that the construction of UHV lines would bring significant relief to the distribution bottlenecks they face in sending power out from wind- and solar energy-rich but sparsely-populated northern regions have also been dashed.

Ip said on average only 10 per cent to 20 per cent of the transmission capacity of UHV lines could be used to send wind and solar power, since it was intermittent in nature and required the mixing of conventional electricity, like coal-fired power, whose output was more stable throughout the day.

He noted even the UHV line linking Hami in Xinjiang and Zhengzhou in Henan province, which sourced as much as 40 per cent of input from renewable energy, had suffered from low utilisation since it was commissioned in early 2014, and it was under repair and maintenance half of last year due to damage caused by huge load fluctuations.