Can the energy Internet be put into practice?

China Energy Storage Network: With the first batch of 55 national-level "Internet +" smart energy (energy internet) demonstration projects gradually being implemented across the country, China is ushering in a new era of urban development with efficient use of clean energy. The National Development Energy Research Institute and the Green Energy Think Tank initially estimated that the energy internet pilot demonstration project will be of great significance in increasing the proportion of renewable energy, promoting the opening of the energy market and industrial upgrading, and forming a new economic growth point.

Energy Internet, or "Internet +" smart energy, can be generally understood as: multiple production lines + centralized dispatching center + transportation channels + consumer terminals, production is carried out according to different user needs, and products are distributed to respective application terminals through centralized allocation. The interconnected production lines include both traditional fossil energy and distributed renewable energy. This is a super-integrated energy network, most of which is electricity, but also includes some heat, cold, gas and other energy sources. All energy is uniformly allocated and complemented with the support of advanced power electronics technology, information technology and intelligent management technology to form an intelligent and shareable energy supply system.

Figure: Composition of Energy Internet

Energy transformation promotes the "trend" of energy interconnection websites

Under the background of global energy transformation and green development, the problems brought by the traditional energy supply system have gradually become prominent, and a more efficient and environmentally friendly future energy system will be increasingly respected. Driven by a new round of global scientific and technological revolution and industrial transformation, the energy Internet has become a "hot spot" and is expected to usher in opportunities for rapid development and become the protagonist of the energy field in the new era. According to the international research organization Accenture, by 2020, the total market size of my country's energy Internet will exceed US$940 billion, accounting for about 7% of the GDP of that year.

my country's energy internet construction began in 2015. According to the goal of the "Guiding Opinions on Promoting the Development of "Internet +" Smart Energy" jointly issued by the National Development and Reform Commission, the National Energy Administration, and the Ministry of Industry and Information Technology, a number of major key technologies and core equipment will be mastered from 2016 to 2018, energy internet technology will reach the international advanced level, and the energy internet market mechanism and market system will be initially established; from 2019 to 2025, the energy internet industry system will be initially established, becoming an important driving force for economic growth, and a relatively complete energy internet market mechanism and market system will be established.

Figure: Characteristics of Energy Internet

According to a survey conducted by the National Energy Research Institute and Green Energy Think Tank, as of May 2017, there were nearly 4,000 domestic companies registered for energy internet. As of June this year, a total of 284 energy internet projects have been reported to the Ministry of Industry and Information Technology, with a total investment of approximately 349.8 billion yuan.

In terms of the number of projects and investment amounts, state-owned enterprises are the main force in energy internet projects. State-owned enterprises applied for 157 projects with an investment amount of 197.621 billion yuan, accounting for 56% of the total amount; private enterprises applied for 83 projects with an investment amount of 89.781 billion yuan, accounting for 21%. The rest included project applications from local governments, scientific research institutions, etc., accounting for 23%.

Figure: Number of energy internet projects applied for by state-owned enterprises, private enterprises, local governments and scientific research institutions

Figure: Capital investment of each applicant in energy internet projects (unit: 100 million yuan) and proportion

Demonstration projects explore solutions

In March 2017, the National Energy Administration announced that 55 projects in 23 provinces and regions including Beijing, Hebei, Shanxi, Inner Mongolia, Jiangsu, Anhui, Shandong, Hubei, Guangdong, Shaanxi, Xinjiang, Sichuan, and Qinghai were selected as the first batch of "Internet +" smart energy (energy Internet) demonstration projects. The total investment amount of the selected 55 energy Internet demonstration projects is 74.5 billion yuan. It covers a variety of models such as city, park, and cross-regional comprehensive energy Internet demonstration, electric vehicles, flexible trading of green resources, and big data. Through the application of demonstration projects, the difficulties of technology and development models will be overcome, and various energy Internet models and business entities will be cultivated to form norms and standards, so as to accumulate feasible reference samples for large-scale application across the country in the next step.

Figure: Distribution of the first batch of energy internet demonstration projects

The investment entities of the first batch of demonstration projects include 31 state-owned enterprises with an investment amount of 37 billion yuan; 11 private enterprises with an investment amount of 21.2 billion yuan; and others include 13 local governments and scientific research institutions with an investment amount of 16.3 billion yuan.

Figure: Investors of the first batch of energy internet demonstration projects

Figure: Types of the first batch of energy internet demonstration projects

At present, among the first batch of demonstration projects, 11 have started construction and 4 have been basically completed. The successful application of the project will undoubtedly achieve the practical significance of promoting regional economic development and also take the first step in driving the transformation of regional energy structure. For some investment companies, they attach more importance to accumulating experience through demonstration projects, and the strategic significance of early layout is greater than the purpose of profit.

Laying a solid foundation: challenges and opportunities coexist

However, the "trend" is time-limited. While it is important to seize the initiative and take advantage of the momentum, if you want to gain an unshakable market position, you urgently need to gradually improve the basic support.

Through the current development and specific operations of the first batch of demonstration projects, it can be seen that the most obvious problem is the restrictions on the implementation of new practices and new ideas by existing laws and regulations. Secondly, local governments have played a decisive role in the process of project promotion, and most of the projects actively promoted by local governments can be implemented faster; third, the degree of cooperation from the power grid is also crucial. As a key link in the energy Internet, the inherent concept of the power grid on renewable energy should be gradually changed; fourth, enterprises should actively carry out technological innovation and business model innovation, create new business forms, and strengthen user-side training; fifth, from planning and design, equipment selection, technical standards to actual operation and maintenance, relevant departments need to promote the establishment of standards and technical specifications as soon as possible.

Energy Internet has important practical significance and far-reaching strategic significance for solving the problem of clean energy consumption nearby, improving the comprehensive utilization efficiency of energy, and building a clean, low-carbon, safe and efficient modern energy system. At this stage, my country's energy Internet development policy system has been basically established. Through policy guidance and incentives, the market enthusiasm has been fully mobilized and the rise of energy Internet has been promoted. In the future, industrial development will rely more on technological progress and market operation. Among them, distributed energy intelligent production and access technology, mature large-scale energy storage technology and developed energy trading network platform will determine the development speed of energy Internet.

The wind blows sometimes and stops sometimes. The energy Internet stands at the forefront of the times. It has an advantageous position but also faces many difficulties. The experimental demonstration effect of the energy Internet will have to wait until the acceptance in 2018 to see the results.