State Grid Corporation of China aims to build a world "super grid"

China Energy Storage Network: From a technical point of view, this vision is achievable, but the plan faces considerable geopolitical obstacles. Although the super grid may never be built, larger and larger regional grids will certainly emerge.

The world's largest power company, State Grid Corporation of China, is on an acquisition spree. As Bloomberg reports, the company is "actively shopping" for power assets in Australia as it looks to expand its international portfolio. State Grid has already acquired companies in countries including Italy, Brazil and the Philippines. But the company's goals extend beyond just investing. It's all part of a larger plan that Liu Zhenya, chairman of State Grid, is promoting. He believes that if it works, it will curb global warming, create millions of jobs and bring about world peace by 2050.

According to the plan, these power grid companies will connect with power grids in other countries and regions to build a global energy internet, obtain electricity from wind power facilities in the Arctic and large-scale solar power generation facilities in the African desert, and then distribute the electricity to every corner of the world. Liu Zhenya said that building a global energy internet has huge economic, social and environmental benefits, will promote the construction of a community with a shared future for mankind, and make the world a "global village" with blue skies and green land.

This is, of course, a wild idea. If this so-called global energy internet concept was proposed by someone else, it would probably not attract much attention. But Liu Zhenya is no one else. He is the chairman of the world's richest power company. Last year, State Grid's operating net cash flow reached $50 billion, which means that the company has enough financial resources and political status to put its development goals on the international energy agenda.

Last September, Chinese President Xi Jinping personally called for discussions on building a global energy internet. Leading research institutions including the Argonne National Laboratory and the Edison Electrical Institute have participated in a series of meetings to discuss the conditions required to build a global energy internet. Regardless of whether the global energy internet is eventually built, the technology behind Liu Zhenya's grand vision is already changing the way electricity is produced and transmitted in the coming decades.

In fact, the concept of a "supergrid" dates back to at least the 1970s, when high-voltage direct current (HVDC) technology was invented, which can transmit electricity over long distances with less power loss than traditional AC systems.

High-voltage transmission technology is still not widely used in North America. But it is becoming increasingly popular in developing countries where power generation facilities, such as hydroelectric dams, are often far from end customers. China, the world's largest electricity consumer, spent $65 billion in 2014 to upgrade its grid to ultra-high voltage lines, in part to transmit wind power from remote areas to fast-growing coastal cities.

In some ways, the cross-border extension of power grids seems natural. More than a decade ago, a German organization proposed the Desertec grid plan, which would transmit solar power from North Africa to Europe. In 2012, Masayoshi Son, chairman of Japan's Softbank, proposed the "Asian Supergrid" idea, which would rely on giant wind farms in Mongolia to supply power to South Korea, Japan, China and even Russia. Earlier this week, State Grid officially signed a memorandum of understanding with Softbank, Korea Electric Power and Rosetti PJSC to conduct a feasibility study on the construction of a cross-border power supply project.

All of these plans would be a boon to wind and solar companies. But because the envisioned grids are regionalized, they would still face the uncertainties involved in relying on renewable energy. In theory, a global power interconnection linking power generation facilities at the North and South Poles and the equator should solve this problem. In practice, a global energy interconnection would be a “sun never sets” system that delivers power day and night, rain or shine.

The key question is how to manage such a system. Liu Zhenya has written a massive and highly technical book to promote the idea, which states that the Global Energy Internet would not have a central power distribution management agency, but would distribute power on demand through a smart grid similar to the Internet. As the earth rotates and different regions reach peak energy demand throughout the day, the Global Energy Internet would automatically adjust power distribution.

Technically, the vision is achievable. Today, electricity can be transmitted over longer distances than ever before, and smart grid technology is developing rapidly. But Liu's vision faces considerable geopolitical obstacles, including laws that prohibit importing electricity from abroad (such as Japan's). In addition, China seems unlikely to convince Arctic countries to accept Chinese energy investment.

Then there is the cost. State Grid estimates that building a truly global grid would cost $50 trillion. This would require international cooperation over the next few decades. At a time when short-termism and nationalism are on the rise around the world, this possibility seems very remote.

Nevertheless, there is no reason to underestimate Liu Zhenya's ambition. Although the super grid may never be built, larger and larger regional grids will certainly appear. The United States, which is gradually transforming its aging power grid, has a unique advantage in developing its own power grid or leading the construction of regional power grids. This idea of ​​the Chinese may be worth learning from.

Original title: State Grid wants to build the world's "super grid"