China’s State Grid Focused on Ensuring Supply Over Green Goals

2 Jul 2023

State Grid Corp. of China will give more importance to safeguarding against blackouts rather than focusing on their ultimate objective of reducing carbon emissions in the country's power sector.

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This was the statement made by Xin Baoan, the executive chairperson of the biggest utility company globally. He was part of a discussion panel during the World Economic Forum's Annual Meeting of the New Champions in Tianjin on Tuesday.

Confronted with the idea of an extremely hot summer, which is already putting a strain on China's efforts to revive its fragile economy, the organization responsible for distributing electricity to over 80% of the nation has firmly emphasized that their primary focus is to ensure continuous power supply and maintain smooth operations in factories.

Xin, addressing the conference commonly referred to as the Summer Davos, emphasized the importance of adhering to the path of environmentally-friendly and innovative energy. However, he highlighted the need to prioritize the timely fulfillment and consistent provision of resources.

State Grid has the same goals as the government. Last year, President Xi Jinping emphasized the importance of developing new energy sources while maintaining the existing infrastructure. China's emissions-heavy infrastructure will continue to be utilized in the foreseeable future.

During the current summer season, intense temperatures and increased utilization of air conditioning units are leading to a significant surge in the demand for electricity during peak hours. In Baotou, a major production center for renewable energy in Inner Mongolia, a few solar factories have been compelled to decrease their output due to constraints on power supply. Xin cautioned that further inadequacies might potentially arise.

"There has been a significant rise in energy usage in China," he remarked. "By 2023, the overall power demands will be met, however, specific areas may experience minor shortfalls during times of high demand."

While striving to avoid power failures, State Grid is simultaneously allocating resources to various technologies in order to diminish dependence on fossil fuels. These technologies entail extensive power transmission infrastructures, sizable facilities for energy storage, and locations for electric vehicle charging, as stated by Xin. The results have been impressive so far, as China has successfully incorporated unprecedented amounts of renewable energy into its grid without causing any excessive strain.

But there are still many tasks at hand. According to BloombergNEF, to achieve net zero by 2050, an average of $136 billion per year will need to be invested in the power grid. China aims to reach this milestone ten years later. In the previous year, approximately $75 billion was allocated towards grid improvements.

Opponents have stated that State Grid and its affiliated company China Southern Power Grid Co. must enhance the connectivity between various areas to guarantee a consistent power supply, without resorting to constructing additional coal-powered plants. Xin stated that his company is approaching this responsibility with utmost seriousness.

"Being the biggest energy corporation in China, we are contributing towards the shift in energy sources and constructing a distinct power infrastructure in China," he stated.

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