Smart grid is developing rapidly, with both opportunities and risks (Part 2)

Smart grid development direction: active distribution network investment space is large

　　The development trend of the distribution network is: emphasizing stable control and power quality under the two-way power flow state after the introduction of distributed energy; emphasizing user interaction. With the increase in measurement points and real-time requirements, the background software will face truly massive data, and mobile Internet technology will enable inspection, maintenance, inspection and remote office to be integrated (active distribution network).

　　The possible future directions of distribution networks are: the integration and intersection of distributed smart microgrids and distribution networks; ring distribution networks (a revolution in relay protection); DC distribution networks and AC/DC hybrid distribution networks.

　　The specific directions are as follows: 1. Strengthen monitoring. Adopt more economical, reliable and advanced sensing, communication and control terminal technologies to realize real-time and comprehensive monitoring of the operating status of the distribution network, the status of asset equipment and the reliability of power supply, and realize the observability of the distribution network. 2. Improve reliability and power quality. Research on the control theory and methods of intelligent distribution networks to realize self-healing control of power grids; research on the operation control and protection technology of distributed power sources in the distribution network to optimize the coordinated dispatching of all links of generation, transmission, distribution and use; research on the use of power electronics technology to realize power quality control and flexible distribution of electric energy, reduce losses, and improve power supply reliability and power quality. 3. The positioning of the State Grid Corporation of China on the intelligent distribution network: covering all distribution network equipment as the basic consideration; comprehensive utilization of information resources as an important means; distribution network dispatching/production command as the main application; and improving the level of distribution network management as the main purpose.

　　Smart distribution network investment logic

　　The construction goals of smart distribution networks include three aspects: reducing losses, ensuring power quality and power supply reliability. Since power quality and losses are mutually dependent, and losses are often accompanied by a decrease in voltage quality, the goal of smart distribution networks is to improve power quality and enhance power supply reliability.

　　Energy saving and intelligence are long-term topics in the power grid. Grid companies pay more attention to power supply reliability, while energy saving is more of a user's concern. Many energy saving preconditions are the improvement of power quality. We put the consideration of intelligence at the top of our investment. Specifically, improving power supply reliability includes online monitoring of distribution equipment and distribution network automation:

　　We estimate that the distribution network automation market will be RMB 30 billion in 2013, RMB 34 billion in 2014 and RMB 38 billion in 2015. Among them, the intelligent terminals (FTU/TTU/DTU) are expected to be RMB 1.6 billion in 2013, RMB 2.2 billion in 2014 and RMB 3 billion in 2015; the distribution network management system is expected to be RMB 1.2 billion in 2013, RMB 1.5 billion in 2014 and RMB 2 billion in 2015; other ring network cabinets, outdoor pole-mounted vacuum switches, intelligent transformers, etc. are expected to be RMB 27.2 billion in 2013, RMB 30.3 billion in 2014 and RMB 33 billion in 2015.

　　Another major market is the online monitoring market for distribution equipment, including online monitoring systems for distribution cables (feeders), online monitoring systems for distribution switches, online monitoring systems for distribution switch cabinets, online monitoring systems for distribution transformers, and online monitoring systems for distribution network power quality. We estimate that the market capacity for online monitoring of distribution networks is about RMB 1 billion, and will increase at a rate of about 10% per year.

　　Other opportunities to watch

　　Other opportunities worth noting in the future smart distribution network include: provision of overall solutions for distribution networks, application of Internet of Things concepts in distribution networks, single-phase grounding fault location technology in distribution networks, personal safety protection in distribution networks, solutions to DC distribution networks and related issues, and the development and promotion of energy storage batteries.

　　Smart grid construction promotes the development of PLC market

　　The so-called PLC is one of the main products in the automation control system. The current construction and development of industrialization emphasizes automation, reduces manpower input, and improves production efficiency. Therefore, PLC also has a great role in promoting the development of industrial automation. Now, with the construction of the global smart grid, the development of Schneider PLC will gain greater development.

　　The reason is that, as the name implies, smart grid is intelligent and will have instant automatic control functions after construction is completed. Obviously, to achieve this goal, PLC technology is indispensable. Therefore, it can be said that the construction of smart grid has opened up a huge market for PLC and provided broad prospects.

　　In the past two years, the domestic economic growth trend has slowed down, the overall world economic situation has been weak, and the size of the PLC market has declined. The introduction of relevant national guidelines on the development and construction of the Internet of Things will greatly promote the development of the PLC industry. I believe that in the near future, the PLC industry will recover and gain a larger market share.

　　As the main means of information collection and control at the current stage, PLC technology can play a key role in the construction of the Internet of Things. At the same time, as the main communication method in the smart grid, PLC will definitely be adopted as a standard in information collection equipment in various places, which will also promote the development of PLC. In addition, foreign demand has also shown a certain recovery momentum. It is believed that the expansion of foreign markets will promote the development and growth of the domestic PLC industry.

　　Experts predict that in the next three years, my country's smart grid construction activities will reach a peak, and related smart meters, concentrators and other remote low-voltage PLC systems will gradually become popular with the popularization of smart grids. The market demand for PLC is relatively stable. Therefore, it can be said with certainty that the development prospects of Schneider PLC are generally optimistic.

Smart grid development status in the United States, Asia, and Europe

　　From 2009 to 2012, the United States' smart grid sales calculated by installation price increased at a compound annual growth rate of 35%, reaching $36.5 billion in 2012. Considering the global economic downturn during these three years, these figures are impressive enough. The $36.5 billion in sales also includes renovation business (which has been going on for 10 years) and various measures to enhance the controllability and reliability of power networks.

　　Despite these figures, the popularity of smart grids is far from satisfactory. At present, the main task facing the United States is to establish a smart grid that integrates smart grid systems such as advanced measurement systems (AMI), automatic distribution response, and user-side interfaces with distributed energy and smart buildings. This will greatly improve energy efficiency and achieve the main goal of smart grids - to maximize the use of renewable energy in the power grid while reducing carbon dioxide emissions.

　　The development of smart grid is inseparable from smart meters, so it is necessary to vigorously promote the popularization of smart meters. Fortunately, the technology of smart meters is very mature, or it can be said that the supply side of smart grid is fully prepared.

　　In 2012, U.S. investment in smart grid supply acquisitions and mergers was about $19.5 billion, double the amount in 2011. Venture capital investment reached $779 million. Although smart grid investment declined in 2011, the decline was less than the overall decline in the clean technology industry.

　　The investment structure of smart grids is undergoing a significant change, with the leading role gradually shifting from internationally renowned companies to medium-sized and even smaller professional companies, which are gradually increasing the proportion of smart grids in their business.

　　In addition, a large number of new market players have emerged in the smart grid field, intensifying competition in the field. However, the smart grid industry is still too fragmented, filled with hundreds of companies below the minimum economic scale. Therefore, mergers and acquisitions will continue at the current rate in the next few years.

　　As traditional transmission and distribution suppliers compete or form alliances with new players from the IT, communications and controller industries, the structure of power supply is showing new trends. In the competition in various segments of smart grids, traditional market players have an advantage - but not a dominant position, and they have the financial strength to undertake contracts. It can be said that the overall situation on the supply side of smart grids is good and will not hinder smart grids from realizing their huge potential.

　　Current technology is already capable of meeting the challenges of smart grids. New technologies such as communications and “big data” have been used at scale in other industries but have not yet been proven to work in a smart grid environment.

　　Asia has not yet started large-scale deployment of smart grids, which has both advantages and disadvantages: the advantage is that this creates opportunities for building a relatively unified smart grid system without facing the problem of mixed development; the disadvantage is that this requires larger-scale investment.

　　In general, Asia has greater potential for rapid large-scale deployment of smart grids than Europe and North America, because in many Asian countries, smart grids are part of the main infrastructure, and are planned to provide energy, transportation and communication services through smart grids. Although it has a lot of room for growth, there are a lot of differences in the capacity and capabilities of rural and urban telecommunications networks in Asia, and the deployment progress of smart grids is also uneven.

　　Asian countries that have made great progress in smart grid deployment include Japan, Thailand, Singapore, South Korea and China. Australia, also in the Asia-Pacific region, has also made great progress in smart grid deployment. Most of the equipment installed in these countries is domestically manufactured, but through alliances and cooperation agreements, Western technology has gradually entered the markets of various countries.

　　China's State Grid Corporation will undertake the largest smart grid deployment, with an expected 350 million smart meters installed by 2020. In 2012, China's smart grid investment surpassed that of any other country, including the United States, for the first time.

　　North America had the highest investment in smart grid systems among all regions until 2011, but was overtaken by China in 2012. The American Recovery and Reinvestment Act of 2009 introduced an incentive measure that provided $4 billion in funding for smart grid pilot projects. This move provided strong support for the smart grid supply sector and created opportunities for the establishment of many new companies.

　　The United States may become the largest supplier of smart grid "big data" and win a lot of business from other parts of the world. However, the demand side of the United States faces greater challenges. If this problem cannot be solved, the United States may lag behind other developed countries or regions in its progress in smart grids.

　　Europe has the most favorable policy environment in the world to promote the deployment of smart grids. The EU has implemented policies to improve energy efficiency, install more renewable energy, and plans to reduce greenhouse gas emissions by more than 20% by 2020.

　　However, Europe is currently facing economic adjustment issues and a debt crisis that needs to be resolved urgently, which may delay the realization of energy-saving and emission-reduction goals and the deployment of smart grids.

　　Europe's transmission and distribution industry consists of public and private companies, with large scale and relatively strong economic strength. European manufacturers are leaders in smart grid technology and deployment, so the supply side is strong. However, low standard regulatory policies and interoperability, as well as the fragmented nature of the utility market, have added obstacles to the promotion of technology demonstration projects.

　　In order to achieve full deployment of smart grids, it is necessary to change the existing centralized structure to a hybrid decentralized structure so that all stakeholders can benefit. Micro-generation and microgrids need to be integrated into the power supply system because this can achieve the integration of renewable energy, promote local supply and demand balance, and improve the flexibility, reliability and efficiency of the system.