June 2017 TLG on Since the publication of our previous UHV Lines: Shaping the Future of China’s Power China’s UHV Sector Landscape in January 2016, China has made significant progress constructing and commissioning Ultra High Voltage (UHV) projects approved in 2015 and 2016. Grid: Exporting However, China has granted no new approvals to date in 2017. Power in an In this edition of TLG on, we update our views on China’s expanding UHV grid, comment on more recent developments, including the current pause, and suggest possible new Age of directions for future UHV projects. Overcapacity Key Points • As of March 2017, China’s UHV network stretched across 18,000km; a further seven projects currently under construction will extend this out to 30,000km. The 13th Five Year Plan has overseen a major expansion of the network, but the grid still lags original plans. • The recent apparent pause in further UHV approvals reflects several factors. First, the technical challenge of interconnecting China’s vast power system cannot be underestimated. Second, UHV expansion is likely producing less benefit than originally expected due to slowing growth in electricity consumption and the near ubiquitous problem of overcapacity. Finding a suitable province that can receive surplus power has become harder as almost all provinces now have some degree of oversupply or prefer to build their own capacity to meet expected future demand Hu, X & Yao, I (2017) China’s UHV Grid: in order to retain both tax revenue and employment opportunities. Ambitious Exporting Power in an Age of Overcapacity. TLG On 4(6) The Lantau Group (HK) Limited renewable targets have only exacerbated this oversupply. • Development plans for coal, hydro and renewable capacity additions all affect the prospects for new UHV projects. The cancellation of new coal capacity will likely TLG on is The Lantau Group’s in-house journal addressing current energy issues, and their delay associated UHV projects while renewable generation capacity may not be policy and economic implications, facing the reliable enough to support UHV lines unaided. Further, while Sichuan and Yunnan Asia Pacific region. provinces are both capable of substantial hydro additions, there appears to have been little appetite to approve new UHV lines out of these provinces. At least part Editors: Leo Lester and Mike Thomas of the problem lies in poor national and regional coordination. Power planning lies with different levels of authorities, and this exacerbates the problems of coordinating Please contact Leo ([email protected]) successful inter-provincial power flows as each province independently seeks to for more information on the series, or if you would like to submit an abstract or manuscript build out its own new capacity, reducing any need for power imports or the UHV for consideration. lines that would carry it. 1 | The Build-Out Has Continued In total, China had commissioned fourteen UHV projects by the end of March 2017. Six of these were alternative current (AC), with a total route length of about 4,000km and a combined transmission capacity of nearly 39GW. The other eight were direct current (DC) projects with a combined route length of 14,750km and a total capacity of 55.6GW. Together, these new lines had, as of the end of March 2017, brought China’s total UHV transmission route length close to 19,000km, with a nationwide capacity of 94GW. At the end of March 2017, 1 China’s total UHV An additional seven other UHV projects are under construction. Six of these (with a transmission route length was combined length of 10,331km and capacity of 55GW) use DC technology, and all but one are expected to be completed by the end of 2017. The DC project connecting roughly 19,000km, with a Dianxibei (in Yunnan province) to Shenzhen will be commissioned first on a monopolar2 capacity of 94GW. Projects basis in 2017 and will achieve bipolar status in 2018. The seventh project is an AC line currently under construction connecting Yuheng in Shaanxi to Weifang in Shandong; it will be China’s longest UHV will boost this to over AC project to date. 30,000km and 155GW. When all these UHV projects are commissioned, China’s overall UHV transmission route length will reach over 30,000km, and total capacity will exceed 155GW. This marks a significant increase in both length and capacity over the current UHV grid (see Table 1 for a list of past and current UHV grid expansion projects). Of this total, 98GW was either commissioned after 2015 or remains under construction. This represents three quarters of the 130GW of inter-provincial and inter-regional transmission capacity planned for in the 13th FYP Electric Power Development Plan (covering 2016 to 2020).3 Clearly China has stepped up its UHV development activity to an extraordinary degree. Table 1: The Building of China’s UHV Grid - UHV Projects Commissioned or Under Construction as of March 2017 UHV Project Approval Construc- Commis- AC/ Voltage Length Capacity Dominant Fuel Date tion Start sion Date DC (kV) (km) (MW) at Source Date Jindongnan- Aug-06 Dec-06 Jan-09 AC 1000 650 5000 Coal Nanyang-Jingmen Yunnan- Dec-06 Dec-06 Jun-10 DC ±800 1374 5000 Hydro Guangdong Xiangjiaba- Apr-07 Dec-07 Jul-10 DC ±800 1907 6400 Hydro Shanghai Jinping-Sunan Nov-08 Dec-09 Dec-12 DC ±800 2059 7200 Hydro Nuozhadu- Jul-11 Dec-11 Sep-13 DC ±800 1413 5000 Hydro Guangdong Huainan-Zhebei- Sep-11 Oct-11 Sep-13 AC 1000 650 6000 Coal Shanghai Southern Hami- May-12 May-12 Jan-14 DC ±800 2210 8000 Coal + Wind + Zhengzhou Solar Xiluodu-Zhejiang Jul-12 Jul-12 Jul-14 DC ±800 1680 8000 Hydro Fuzhou-Zhejiang Mar-13 Apr-13 Dec-14 AC 1000 603 6800 Nuclear North Huainan-Nanjing- Apr-14 Nov-14 Dec-16 AC 1000 780 6000 Coal Shanghai Ximeng-Jinan Jul-14 Nov-14 Jul-16 AC 1000 730 9000 Coal + Wind Ningdong- Aug-14 Nov-14 Aug-16 DC ±800 1720 8000 Coal + Solar Zhejiang Mengxi-South Jan-15 Mar-15 Nov-16 AC 1000 608 6000 Coal + Wind + Tianjin Solar Yuheng-Weifang May-15 May-15 expected AC 1000 1049 6000 Coal Jun-17 Jiuquan-Hunan May-15 Jun-15 Mar-17 DC ±800 2388 8000 Coal + Wind + Solar 1 A further project (approved in January 2016; construction started in April 2016; expected start date in June 2017) is unusual iin being wholly within a single province, linking seven power stations to the Ximeng substation, which goes on to feed the Ximeng-Jinan UHV AC and Ximeng-Taizhou UHV DC lines. The UHV link is not used for long-distance transmission and is excluded from our discussion. 2 This means that the transmission capacity will be half of the designed capacity initially. 3 See NDRC and NEA, The 13th Electric Power Development Plan of China, 2016. 2 | UHV Project Approval Construc- Commis- AC/ Voltage Length Capacity Dominant Fuel Date tion Start sion Date DC (kV) (km) (MW) at Source Date Jinbei-Nanjing Jun-15 Jun-15 expected DC ±800 1100 8000 Coal 2017 Ximeng-Taizhou Oct-15 Dec-15 expected DC ±800 1641 10000 Coal + Wind 2017 Shanghaimiao- Dec-15 Dec-15 expected DC ±800 1238 10000 Coal + Wind + Shandong 2017 Solar Zhundong- Dec-15 Jan-16 expected DC ±1100 3324 12000 Coal + Solar Huainan end of 2017 Dianxibei- Dec-15 Feb-16 expected DC ±800 1828 5000 Hydro Shenzhen bipolar 2018 Zhalute- Aug-16 Aug-16 expected DC ±800 1200 10000 Coal + Wind Shandong 2017 TOTAL 30,152 155,400 Source: TLG based on various government publishes and media reports. The latest development of China’s UHV systems is shown in Figure 1. Figure 1: China’s UHV Systems Completed, Under Construction and Proposed Ximeng Mengxi Jinbei East West Beijing Beijing Inter-region grid connections: Jingbian Jinzhong Jina unlikely under current planning Shijiazhuang conditions n Weifang Jindongnan Yubei Ya’an to Changshou: development Lianyungang is likely on hold as an alternative Xuzhou 500kV route is under construction Nanyang Taizhou Huainan Nanjing Suzhou Wanxian Ya’an Wannan Huxi Jingmen Wuhan Zhebei Leshan Zhezhong Changsha Wenzhou Fuzhou AC Substation UHV AC in Operation UHV AC under construction UHV AC approved UHV AC proposed Zhalute Zhundong Hami (North) Hami (South) Ximeng Mengxi Shanghaimiao Jingbei Jiuquan Ningdong The destinations of Qingdao these lines are unlikely under current Qingzhou market conditions Zhengzhou Linyi Nanjing Taizhou Suzhou Wuhan Large hydropower Fengxian capacity and high Chengdu Yubei Xuancheng curtailment rates raise Xiangjiaba Shaoxing the need for more export Xiangtan Jinping transmission capacity Jinhua Dianxibei Xiluodu DC Terminal Chuxiong Guangzhou UHV DC in Operation Nuozhadu UHV DC under construction Shenzhen Jiangmen UHV DC approved UHV DC proposed Source: Government and press releases, TLG analysis. Note: Provincial colours denote regional grids. Taupe ellipses denote major power demand load centres. 3 | Despite this apparent progress, however, the overall development still lags State Grid’s original UHV targets for 2020.4 Moreover, it is clearer now that several UHV projects which previously appeared highly likely to gain approvals are no longer being actively considered. For example, the NEA’s approval of the third 500kV transmission corridor The UHV grid’s rapid between Sichuan and Chongqing as a solution to Sichuan’s hydropower surplus has led development still lags original to the cancellation of the UHV AC line from Ya’an (Sichuan) to Wuhan (Hubei). Neither 2020 targets. The problem Sichuan nor Chongqing is short of power, even in the dry season. With its substantial lies in finding destination hydropower, Sichuan is looking for export destinations, especially for during the wet markets willing to accept the season.