In an effort to find ways to satiate the country's hunger for power supplies in 2005, China's two electricity distributors are to heavily invest in building ultrahigh-voltage power grids from this year, in a bid to upgrade the country's power transmission facilities. The investment strategy was revealed by the two companies last week in interviews.

China is expected to continue suffering from power shortages, largely due to insufficient coal supplies this year, the China Electricity Council said last month. Hardest hit by blackouts will be the eastern, southern and northern areas.

In order to help alleviate the situation, the State Grid Corp of China (SGCC), China's largest power grid builder, and the operator of more than half the power-starved economy's electricity distribution, has hammered out an investment of 107 billion yuan (US$12.9 billion) to construct and repair its grids, the company's 2005 work plan released earlier this year stated.

China Southern Power Grid Corp (CSG), the second-largest electricity distributor, will spend 30.5 billion yuan (US$3.7 billion) improving its power transmission capacity in the five provinces it serves - Guangdong, Guangxi, Guizhou, Yunnan and Hainan.

A large proportion of the two companies heavy investment will be injected into the construction of the ultrahigh-voltage power grids, they said when interviewed.

No specific figure, elaborating on the proportion was given, with both citing that construction is a "long-term task."

The State Grid Corp has made ultra high-voltage grid construction its core business operation for the time being and a "strategic objective" in the long run, said the company.

"The construction (of an ultrahigh-voltage power grid) is the most pressing task for our company, and we should rev up efforts to achieve successful completion of the project," Liu Zhenya, president of SGCC, told the company's 2005 annual work conference in January.

The power grid giant is in talks with China's local power transmission equipment manufacturers for research and production of the necessary equipment for the ultrahigh-voltage grid, said insiders.

Through the new grid, the largest electricity distributor in China plans to connect the regional power grids in different areas of the country, and enhance the cross-region electricity transmission capacity to a designed total of 200 million kilowatts. This will go some way to attempting to balance the power generation disparities in different regions, said the company.

In the South, China Southern Power Grid (CSG), the country's second largest power web weaver, will begun building the pilot section of the 1,000-kilovolt power grid to transmit electricity from Yunnan's Zhaotong to Huidong in Guangdong in the second half of the year, a senior officer surnamed Yin from CSG's news center told China Daily last week.

The project, currently in the preparatory stages, will feed the worst black-out hit province of Guangdong, said Yin.

Part of the country's West-East Electricity Power Transmission Project - an undertaking to transmit electricity from the resource-rich western areas to the hungry, developed eastern areas affected by power shortages - the scheme is as equally important as the country's West-East Gas Pipeline project.

Along with CSG's ultrahigh-voltage grid project, the company also expects 22 key power transmission projects to go on stream by the end of the year, 15 of which will be completed by mid-2005, Yin told China Daily.

The ultrahigh-voltage power grid is an electricity transmission network to transmit electricity at a voltage higher than 500 kilovolts, said experts.

It will improve the transmission capacity of the network to enable electricity transmission across long distances, and at the same time reduce electricity losses incurred in transmission.

Currently, China's power grid framework is mainly based on the 500-kilovolt system, said industry insiders. But it is falling far short in terms of ability to meet the country's expanding power generating needs.

"The soaring demands of power consumption and fast-growing power plant construction, a result of the country's robust economic development, has put much pressure on China's over-loaded power grid system," said Wang Xiaohui, power industry analyst with CITIC Securities.

By the year 2020, China will need an electricity installed capacity of 1 billion kilowatts from the current 500 million kilowatts, a 100 percent increase, official statistics show.

The country's power grid has long lagged behind.

During the Eighth Five-Year plan (1991-95) and Ninth Five-Year plan (1996-2000) periods, China's power grid investment took a humble 13.7 percent and 37.3 percent respectively of the aggregate spending in the power sector, compared with the more than 55 percent in the developed countries, research by SGCC revealed.

Analysts applauded the move by the two electricity distributors to build a ultra high-voltage power grid nationwide, saying it will be conducive to securing the country's electricity distribution and solving power generation imbalances in different regions.

"The nationwide ultrahigh-voltage power transmission framework, for example, will be an easy and important means of transmitting power from those provinces which have high power generating capacities, such as Sichuan, to electricity-hungry places like Guangdong," said CITIC's Wang. "It is also an economical way to alleviate the power shortages." he added.

The State Electricity Regulatory Commission, the power industry's watchdog, predicted last month China will see a balance between power supply and demand by 2006.

The technology involved in the ultrahigh-voltage power grids are cutting edge, said experts, with to date only Russia and Japan having built such grids. Some fast-developing economies, such as India and Brazil, have begun research and development work in the field.

(China Daily March 21, 2005)