New energy consumption has become the proposition of the times and the construction of a new power system is imminent

China Energy Storage Network News: Cailian Press (Beijing, reporter Xu Haidong) reported that the construction of new energy is in full swing, and the construction of a new power system is imminent. The Central Economic Work Conference held at the beginning of the month once again proposed "increasing the capacity to absorb new energy". In the view of Tang Guangfu, an academician of the Chinese Academy of Engineering, the power system is the core of future energy transformation. "Wind, light, water, nuclear and other energy sources must be converted into electricity, and energy storage and hydrogen energy also need to be converted through electricity. The volatility and randomness of new energy generation are bringing huge challenges to the safety of the power system."

In March this year, the 9th meeting of the Central Financial and Economic Commission pointed out that it is necessary to "deepen the reform of the power system and build a new power system with new energy as the main body." Industry insiders pointed out that the construction of a "new power system" requires the power system to further move towards the direction of clean power supply, flexible system, digital system, and electronic power system, which will also become the main line of investment in the A-share power sector in 2022.

Distribution: The accelerated access of new energy makes intelligent distribution network a key requirement

Reconstructing the power system is a necessary requirement for the large-scale development of new energy. However, new energy power generation is inherently random, volatile, and intermittent. How can traditional power systems adapt to the access of a high proportion of new energy?

Mr. Li, a senior expert in the power grid industry and deputy director of a core power equipment and control system group research institute, pointed out to Cailianshe reporters that the pressure on the power grid is increasing. In rural power grids, the first factor to be affected is photovoltaic power generation in the entire county. The power grid will assume the obligation to absorb distributed power sources in the distribution network, change some physical grids and configuration functions, including transformers, cables and other devices, and also need to improve the level of intelligence. Edge computing will play a greater role in intelligence. In terms of urban distribution networks, electric vehicle charging piles are continuously connected to the power grid's distribution network, which poses new challenges to the power grid's power supply capacity. The dispatching of the power grid company's distribution network load and the flexibility of the power grid need to be greatly improved, which requires corresponding intelligent means to improve its overall response speed and power supply capacity.

Deng Yongkang, chief analyst of Minsheng Securities Electric New Energy, said that during the "14th Five-Year Plan" period, the Southern Power Grid has planned to invest about 670 billion yuan, of which the distribution network investment accounts for about 48%, while the previous distribution network investment accounted for about 40%, indicating that the distribution network and distribution network intelligence have become the focus of attention. CICC's latest research report also pointed out that the functional form of the distribution network will evolve from a one-way passive network to an active network with interactive supply and demand. The equipment side should focus on primary equipment, primary and secondary fusion equipment, secondary equipment, smart energy management and other fields. People in the power industry told Cailianshe reporters that the distribution network needs to continue to improve the large-scale application level of intelligent terminals such as primary and secondary fusion equipment and live robots. In addition, there are currently many demonstration projects for the upgrading of distribution networks in China. For example, the 220 kV Binzhou Guoji Substation has demonstrated the integration of the distribution network radiation power consumption side by building new infrastructure under the new power system such as photovoltaic stations, energy storage stations, and electric vehicle charging stations.

Statistics show that there are nearly 100 A-share listed companies in the power transmission and distribution sector, which are classified into different sub-segments such as primary equipment, primary and secondary integrated equipment, secondary equipment, and smart energy management. Since the beginning of this year, the performance of many listed companies in the industry, such as Sifang Co., Ltd. (601126.SH), Beijing Ke Rui (002350.SZ), and Shuangjie Electric (300444.SZ), in the first three quarters showed that the main business income and profits have achieved substantial growth, showing the high prosperity of the power distribution equipment industry.

Transmission end: UHV flexible DC becomes the main grid investment focus

Regarding investment opportunities in the main power grid, the above-mentioned core power equipment group experts pointed out that in order to better absorb new energy while maintaining the stability of the power grid, the power chain must first be able to absorb a wider range of power, that is, ultra-high voltage. "During the 14th Five-Year Plan period, AC ultra-high voltage will be built along with the entire flexible DC back-to-back transmission mode, and will also bring some intelligent needs. The grid dispatching will be expanded from the past intra-provincial balance to inter-provincial balance, and the setting and control logic of the overall grid dispatching will change accordingly."

Industry experts further pointed out that "multi-energy complementary power supply system + UHV DC transmission channel" is the mainstream solution for new power systems for new energy, and a new round of UHV project construction in China will be carried out on a large scale. Data show that by the end of 2020, the State Grid's inter-provincial transmission capacity reached 230 million kilowatts, and the proportion of clean energy transmission reached 43%; the Southern Power Grid's west-to-east power transmission capacity exceeded 58 million kilowatts, and the proportion of clean energy transmission exceeded 80%. During the "14th Five-Year Plan" period, the scale and intensity of resource allocation by the power grid will be significantly enhanced. The China Electricity Council predicts that by 2025, the scale of inter-regional and inter-provincial power flow will increase to about 370 million kilowatts. The "China Energy and Power Development Outlook 2020" released by the State Grid Energy Research Institute predicts that the capacity of my country's inter-regional transmission channels will further reach 400 million kilowatts and 500 million kilowatts in 2035 and 2060.

Industry analysts at CICC pointed out that driven by the three major application scenarios of ultra-high voltage hybrid direct current, flexible direct current back-to-back and deep offshore wind power transmission, the total investment in direct current transmission projects is expected to exceed 400 billion yuan during the 14th Five-Year Plan period, of which the total market demand for converter valves, IGBTs, thyristors, etc. is 45 billion yuan in five years, bringing sufficient flexibility to related industrial chain companies.

According to the current "14th Five-Year Plan" of State Grid and Southern Grid, the industry generally expects that about 10 UHV DC lines will be started in China from 2021 to 2025. The total cycle of a single UHV project is usually 2-2.5 years, which means that UHV bidding may start in the first half of 2022, and UHV will start production and suppliers will start to recognize revenue in the second half of the year. Therefore, the performance of NARI (600406.SH), XJ Electric (000400.SZ), Pinggao Electric (600312.SH), and Perry Electric (300831.SZ) deserves special attention.

Grid side: Digital transformation is imperative

A power grid professional told Cailianshe reporters that the production organization model adopted by the traditional power system is "source follows load", using a precisely controllable power generation system to match a basically measurable power consumption system, and rolling adjustments in actual operation to achieve safe and reliable operation of the power system. However, in the future, new energy will become the main body, and both the power generation side and the user side will become uncontrollable, which will fundamentally change this model, and digitalization is the direction of its transformation.

The so-called digital transformation of power grids is to use new generation digital technologies such as cloud computing, big data, the Internet of Things, mobile Internet, artificial intelligence, and blockchain to digitally transform traditional power grids, give full play to the role of data as a production factor, and use data flow to lead and optimize energy flow and business flow. According to the "Digital Power Grid White Paper" released by the Southern Power Grid, after the digital transformation of the power grid, "electricity + computing power" will be used as the core to drive the coordinated dispatch of large-scale renewable energy, forming a digital platform for new energy that is observable, measurable, and controllable, which will be conducive to increasing the joint optimization dispatch of wind, solar, water, fire, and storage, and maximizing the consumption of clean energy.

Tang Guangfu, an academician of the Chinese Academy of Engineering, also said that through the deep integration of digital technology and physical systems, the "digital empowerment" of the power system can be achieved. The power system needs to improve the level of digital analysis and strengthen the coordination and control capabilities of the power grid; promote the interaction between supply and demand of multiple users and improve the level of demand-side management; strengthen the integration of digital and equipment and improve the level of equipment intelligence.