Power operators ramp up share of non-fossil fuels in energy mix

China's major power grid operators have seen an increasing share of electricity generated from nonfossil fuels in the past three quarters, as the country forges ahead in cutting coal consumption and increasing the use of renewable energy in its power mix.

State Grid Corp of China, the largest power provider in the country, said its newly grid-connected power capacity generated by new energy has reached 41.74 million kilowatts during the first three quarters of the year, up 39.1 percent compared with the same period a year ago. The utilization rate reached 97.4 percent, up 0.1 percentage points, it said.

It vowed to continue investing in grid construction this year with 473 billion yuan ($73.5 billion) in investment, up 2.71 percent year-on-year.

China Southern Power Grid, one of the country's two major power grids whose business covers Guangdong province, the Guangxi Zhuang autonomous region, Yunnan province, Guizhou province and Hainan province, said the five regions have consumed 540 billion kilowatt-hours of clean energy during the first nine months, with the renewable energy generation efficiency reaching 99.81 percent, up 0.22 percent year-on-year.

Newly added installation of new energy reached 3.31 million kilowatts. The company also plans to step up digital power grid construction to make sure its percentage of non-fossil energy power generation accounts for 60 percent by 2025 to around 100 million kilowatts, it said.

The two companies vowed to enhance trans-provincial clean energy power transmission, advance consumption of clean energy and promote electric power through innovations in grid technology.

China has pledged to build a new electric power system where the share of new energy resources keeps rising, and work toward an optimized distribution of clean electricity generation on a broad scale in a recently released action plan for carbon dioxide peaking before 2030.

The government will make vigorous efforts to boost the overall adjustable capacity of the electric power system, expedite construction of flexible power sources, incorporate enterprise-affiliated power plants, the load of traditional energy intensive industries, interruptible industrial and commercial load, electric vehicle charging grids, and virtual power plants into the power system, build resilient smart electrical grids, and make grids more secure and reliable, it said.

Analysts said the country's continuous construction of ultrahigh-voltage (UHV) transmission lines, which usually transmit energy at more than 800,000 volts and above, could enable the country to rely more on renewable energy.

UHV transmission lines, which could double the voltage of conventional high-voltage lines and allow them to transmit up to five times more electricity at minimal energy loss along the way, are considered the answer to China's energy imbalance.

Wei Hanyang, a power market analyst at research firm BloombergNEF, said the State Grid region has accommodated 39 percent more renewable energy without compromising their general utilization rate, meaning a more robust grid-network structure and greater use of the transmission channels.

"It helps provide continued confidence for investors on further build out of wind and solar," he said.

China Southern Power Grid, on the other hand, has played out a high utilization of clean power plants, because its dominant generators are based on hydropower, Wei added.

"Hydropower can provide a stable and proper output to the grid channels. Coming up, the regions will see more installation of wind and solar, and thus slightly more challenges on accommodating them," he said.

China has been at the forefront of UHV technology for over a decade, with its first such line going into operation in 2009 and a current network of more than 30 lines.

As power generation using renewable energy requires the grid network to be steadier and quicker in response due to the volatility and unpredictability of new energy, it is necessary to build a new power system with new energy as a principal component to help the government achieve its carbon peak and neutrality ambitions, said Wu Baoying, chairman of the Energy Development Research Institute under China Southern Power Grid.

The State Council, the country's Cabinet, has recently unveiled a plan to build a new type of power system featuring a gradual increase in the proportion of new energy sources and promoting the large-scale optimization of clean power resources.

New grid channels shall include at least 50 percent of renewable energy and the government will also strictly control the proportion of coal in interprovincial power delivery.

Wei said the move will gradually clean up the power mix in both coastal regions and the western and central parts of China by releasing more room for renewable developments and better securing their dispatching.