State Grid's 2020 plan for ubiquitous power Internet of Things is released and is about to enter the comprehensive construction stage

When darkness falls in the east, there is light in the west. The State Grid Corporation of China has just issued the "Notice on Further Strict Control of Grid Investment", announcing the end of the era of large-scale grid investment. The company is about to enter the stage of comprehensive construction of ubiquitous power Internet of Things, and its investment is expected to double in 2020.

On December 2, State Grid Corporation of China issued the "Outline of Key Construction Tasks for Ubiquitous Power Internet of Things in 2020", which will focus on carrying out 40 key construction tasks in eight directions, including energy ecology, customer service, production operation, business management, enterprise middle platform, smart Internet of Things, basic support, and technology research in 2020.

Key construction tasks include ubiquitous dispatching and control for multi-dimensional coordination of sources, grids and loads, optimization of marketing and distribution, marketing 2.0, a new generation of electricity trading platform, a new generation of dispatching automation system, smart supply chain, data middle platform, resource business middle platform, "State Grid Cloud", 5G construction and application, etc.

2019 is the year of exploration and pilot of the ubiquitous power Internet of Things, and the investment scale is expected to be close to 20 billion. In 2020, the construction of the ubiquitous power Internet of Things will be fully rolled out, and many institutions predict that the investment is expected to double. People familiar with the matter told Nengjian that the investment scale in 2020 is close to 50 billion.

The era of large investments in traditional power grids has ended and the stage of comprehensive construction of ubiquitous power Internet of Things has begun, which means that the transformation of the power grid has entered a stage of rapid development.

Grid transformation

As early as the first round of power system reform in 2002, my country's power industry had already achieved "separation of power plants from the grid", forming a multi-seller structure on the power generation side. However, the reform was not thorough. In order to control electricity prices, the state did not achieve separation of transmission and sales, and the power grid took on the work of selling electricity nationwide. For power plants, the grid is the only buyer and can try to lower prices; for users, the grid is the only seller and can raise prices. In the end, the grid became the biggest winner in this round of power reform.

In March 2015, the Central Committee issued Document No. 9, “Several Opinions on Further Deepening the Reform of the Electricity System (Central Committee [2015] No. 9)”, which triggered a new round of reform of the electricity system. This round of reform of the electricity system is aimed at the overall power system including power generation, transmission and distribution, sales and consumption, and the power grid is only one of the links. Since electric energy is highly dependent on physical transmission equipment, the physical monopoly of the power grid will not be completely broken. The reform of the power grid is aimed at its jurisdiction (stripping the only power sales agency of the power grid and returning the power grid to its original function of transmission and distribution), as well as its operation and profit-making methods (through the reform of transmission and distribution prices and the determination of power grid charges).

The idea of ​​this power system reform is to "control the middle and release the two ends", control the transmission and distribution functions of the power grid, form a competitive pattern of more buying and more selling, establish a power market, and restore the commodity attributes of electricity. Through the construction of the power market, the establishment of relatively independent trading institutions, the focus on the reform of transmission and distribution prices, and the promotion of reforms on the power sales side, the realization of power marketization will be assisted. Once electricity becomes a real commodity, when there is a serious imbalance between electricity consumption and supply, it can create new productivity, resolve excess electricity, and adjust the structure of power energy production and consumption. The reduction of electricity prices will become a direct reflection of the reform.

The advancement of power system reform has broken the position of the power grid as a monopoly electricity seller, and the profits of the power grid have been greatly reduced. In addition, the "Government Work Report" in 2018 and 2019 proposed to reduce the general industrial and commercial electricity price by 10%, and a number of subsequent measures were introduced, all of which are closely related to the profits of power grid companies.

Take State Grid Corporation of China as an example. This year, State Grid Corporation is facing unprecedented pressure. Its revenue growth rate has declined across the board, and its overall profit has shrunk significantly. It is already facing a loss-making situation. The losses of its provincial companies are constantly expanding, and the cumulative loss amount is expected to exceed 10 billion yuan.

Therefore, in early 2019, in order to cultivate new growth momentum, adapt to the trend of accelerated integration of traditional industries and the Internet, give full play to the resource advantages of power grid companies, actively develop platform value-added services and emerging customer-side businesses, and explore the huge blue ocean market of digital economy, State Grid proposed the strategy of building a ubiquitous power Internet of Things, and the power grid began to transform.

Ubiquitous Development

In order to change the loss-making situation of traditional power grids, State Grid and China Southern Power Grid have issued documents to determine investment based on output, strictly control the scale of power grid investment, focus on efficiency and benefits, and strengthen power grid investment management.

State Grid will strictly control investment and will inevitably significantly reduce low-efficiency projects such as civil engineering and primary projects, shift investment to ubiquitous power Internet of Things related industries, increase informationization, intelligentization and other strategic transformation necessary projects, and significantly optimize the investment structure.

With the widespread application of Internet of Things technology in the national power grid, digital distributed systems will become the norm in the energy field, and the number of IoT terminals will grow exponentially. They will be connected to the network through sensor technology, communication technology and computer technology.

2019 is the year of exploration and pilot of ubiquitous power Internet of Things. The investment scale is expected to be close to 20 billion. Orders in related industrial chains continue to increase, bringing significant growth to the performance of the industrial chain.

From September to November 2019, the State Grid has conducted three consecutive informatization biddings, the pace of construction has significantly accelerated, special investments in the ubiquitous power Internet of Things have been implemented one after another, and orders in the industrial chain have continued to rise. Taking NARI as an example, the growth rates of new orders in the first nine months, the first ten months, and the first eleven months of 2019 were 6%, 7.8%, and 10%, respectively. Orders continue to accelerate, and 2020 will usher in significant performance elasticity.

In 2020, the construction of ubiquitous power Internet of Things will be fully rolled out in the State Grid.

At the platform level, data middle platforms at the headquarters and provincial levels are expected to be completed, and the power grid resources business middle platform and customer service business middle platform will be initially built; at the network level, 5G construction and application are expected to become one of the key directions; at the terminal level, a smart IoT system covering equipment, customers, and supply chains will be initially built, and the demand for a new generation of smart meters is expected to increase; at the application level, the marketing 2.0 system and the new generation of electricity trading platform are vigorously promoted.

In summary, the investment in the entire ubiquitous power Internet of Things is expected to double in 2020. People familiar with the matter told Nengjian that the investment scale of the ubiquitous power Internet of Things in 2020 is close to 50 billion.

The agency predicts that the State Grid's investment in the ubiquitous power Internet of Things will continue to grow, while the investment in traditional power grids will continue to decline. Suppliers around the traditional power grid industry chain will have to re-examine the embarrassing situation they will face.

As the world's largest public utility company, State Grid Corporation of China has an annual revenue of more than 2.5 trillion yuan and total assets of nearly 4 trillion yuan. It has always been among the top 500 companies in the world. It invests hundreds of billions of yuan in power grid construction every year and purchases huge amounts. Over the past decade, there have been thousands of traditional power equipment suppliers doing power grid business.

With the transformation of the power grid, these traditional power industry chains that were once built around the "centralization and assetization" of the power grid must either adapt to the change in power grid investment style or face being eliminated.