Clean energy will account for 80% of the future matrix of the global energy internet

What is the hottest concept in the energy industry right now? I believe many people would choose the global energy internet. The pace of this concept from its rise to reality seems somewhat unexpected.

In September 2015, Chinese President Xi Jinping delivered an important speech at the United Nations Development Summit, proposing to build a global energy internet, promote clean and green ways to meet global electricity demand, and elevate energy interconnection to a joint action involving the world. This is another major initiative proposed by President Xi Jinping after the Belt and Road Initiative, which is a historical transcendence and major innovation of the traditional energy development concept.

UN Secretary-General Ban Ki-moon, UN Assistant Secretary-General and founder of the UN Global Compact, Andrew Cole, and International Energy Agency Executive Director Fatih Birol highly praised this, saying that "this is one of the strongest voices from China."

After November 2015, around the construction of the global energy internet, relevant Chinese units hosted the China-US and China-EU technical equipment seminars in Chicago, the United States and Berlin, Germany, respectively, and held a high-level seminar on global energy internet investment and financing in Hong Kong. China's exploration and practical work in building the global energy internet has been fully recognized and strongly responded by the international community.

From strategic conception to joint action

"For the global energy internet, it is necessary to place the intelligent energy utilization scenario in the context of global energy allocation," Lin Hongyu, deputy director of the Global Energy Internet Office of State Grid Corporation of China, told the Outlook Think Tank Observer, "because this is due to the actual needs of world energy development."

The development of clean energy has become a global consensus. According to statistics, the world's hydropower resources exceed 10 billion kilowatts, land wind power resources exceed 1 trillion kilowatts, and solar energy resources exceed 100 trillion kilowatts. Developing only 0.05% of them can meet the energy needs of future human society.

A more practical option is, on the one hand, to implement clean substitution in energy development, replacing fossil energy with clean energy such as solar energy and wind energy, and promoting the transformation of the energy structure from being dominated by fossil energy to being dominated by clean energy; on the other hand, to implement electric energy substitution in energy consumption, increase the proportion of electric energy in terminal energy consumption, and build a new global energy pattern with electricity as the core, integrating energy transmission, resource allocation, market transactions, information interaction, and intelligent services.

Lu Qiang, an academician of the Chinese Academy of Sciences, pointed out that the global energy internet strategic concept is a grand strategy to explore collaborative solutions to global energy and environmental problems. It is a feasible and truly top-level design. It will lead us onto a bright path of energy development and utilization that involves international collaboration and resolves the basic contradiction between the continued growth of energy demand and the continuous improvement of the living environment.

According to the analysis of State Grid Corporation of China, by building a global energy Internet and meeting global electricity demand in a clean and green way, the proportion of clean energy will reach 80% by 2050, which can replace fossil energy equivalent to 24 billion tons of standard coal each year and reduce carbon dioxide emissions by 67 billion tons.

This will have global and strategic significance for promoting energy revolution, responding to climate change, and achieving coordinated development of the world economy, society, and environment. For this reason, State Grid Corporation of China, as the most important practitioner of the global energy Internet, proposed that the construction of the global energy Internet can be generally divided into three stages.

The first stage is domestic interconnection: from now until 2020, we will accelerate the development of clean energy and domestic power grid interconnection in various countries, and significantly improve the power grid configuration capabilities, intelligence levels and the proportion of clean energy in various countries.

The second stage is intra-continental interconnection: from 2020 to 2030, the development of large-scale energy bases within the continent and cross-border interconnection of power grids will be promoted to achieve large-scale, wide-ranging and efficient optimization of clean energy within the continent.

The third stage is intercontinental interconnection: from 2030 to 2050, we will accelerate the development of the "one pole and one channel" (Arctic wind power, equatorial solar energy) energy bases, basically build a global energy Internet, achieve the goal of clean energy dominance on a global scale, and comprehensively solve the world's energy security, environmental pollution and greenhouse gas emissions.

This is not a fantasy. The interconnection of the world's major power grids is currently being accelerated, which in a sense verifies the feasibility and inevitable trend of building a global Internet: the world has formed three super-large interconnected power grids in North America, Europe, and Russia-Baltic Sea. China has achieved nationwide interconnection except for Taiwan. Interconnection plans such as the European Super Grid, the Northeast Asian Interconnected Grid, and the "Desert Plan" for transmitting electricity from North Africa to Europe are being actively promoted. These will become important components of the global energy Internet.

Wang Yimin, assistant to the general manager of State Grid Corporation of China and director of the Global Energy Internet Office, said that the Global Energy Internet represents new investment opportunities in the next few decades, with the characteristics of high returns and stable income.

Many international financial institutions have begun to focus on the business model, operation model and profit model of the Global Energy Internet, and have made some significant progress. These experiences will lay a solid foundation for future cooperation and are expected to promote the progress of the Global Energy Internet.

State Grid Corporation of China predicts that by 2050, when the global energy internet is initially built, the cumulative investment will exceed US$50 trillion, forming several trillion-dollar investment sectors, giving rise to numerous emerging industries and bringing rich returns to global investors.

In this regard, Carolina Ferreira, head of power and public utilities in Latin America at Santander Bank, said that due to the time difference effect, there is great potential for integrating the north and south power grids in Latin America. Currently, there are 6 bilateral power projects, 7 cross-border interconnection projects, and 2 cross-border optimization and improvement projects in the Latin American power industry. From 2016 to 2018, the length of transmission lines auctioned in Brazil alone exceeded 13,800 kilometers, with an investment of more than US$6.1 billion; since 2008, the Brazilian market has raised a total of US$74 billion in equity financing.

More convincing are the successful cases of energy interconnection. The most typical case is the UK-Belgium submarine cable project, which was started in 2015. The proposed regulation of the project allows an upper limit of 13.76% and a lower limit of 1.52% in terms of return rate. In addition, the UK-France and UK-Norway submarine cable interconnection projects will complete financing and start operation in 2019.

In Asia, China has built 18 cross-border transmission channels with neighboring countries. By the end of 2015, more than 17.6 billion kWh of electricity had been imported from Russia through three cross-border lines. Large-scale global energy Internet investment will be rewarded through the price difference of power resources and time difference benefits. For example, the price of hydropower in Xinjiang, China and Russia's Far East is less than 0.3 yuan/kWh, and after adding the ultra-high voltage transmission fee of about 0.1 yuan/kWh, there is still a large price difference between the transmission to East China and the local minimum on-grid electricity price of 0.46 yuan/kWh. According to the United Nations, regional interconnection in Southeast Asia can save $200 billion from 2005 to 2025, and European energy interconnection can bring cost savings of 14 billion to 45 billion per year.

"Building a global energy internet is an unprecedented huge system project. Faced with unlimited business opportunities and prospects, we still need joint efforts and cooperation from all parties." Wang Yimin said, "Common problems mainly focus on three aspects: market mechanism, standard system and technical needs." For example, how to focus on accelerating the research of advanced, efficient and safe clean energy power generation technology, flexible transmission technology, energy storage technology, large power grid control and modern information and communication technology.

The solution proposed by State Grid Corporation of China is to take the lead in establishing the world's first international cooperation platform for global energy internet in the near future. This will strengthen cross-national, cross-regional, cross-industry and cross-field cooperation among governments, industry organizations, social groups and energy companies, and jointly solve the policy, market, technology and funding issues involved in the global energy internet, so as to achieve mutual benefit, win-win and common development.

Original title: Clean energy will account for 80% of the future matrix of the global energy internet