To reduce power demand during peak usage periods, communications and metering technologies inform smart devices in the house, factory, or business building when energy demand is high and track how much electricity is used and when it is used. Electricity prices increase during peak usage periods, and decrease during low-demand periods. The end user will tend to consume less during peak usage periods if it is made possible for users and user devices to be familiar with the high price premium for using electricity at peak periods. When end users see a direct economic profit to become more energy efficient, it is more likely that they will make wise decisions on consumption.
Based on the U.S. Department of Energy's Modern Grid Initiative report, a smart grid should be able to heal itself; motivate consumers to actively participate in operations of the grid; resist attack; provide power of a higher quality that will save money wasted due to power blackouts; accommodate all generation and storage options; and enable electricity markets to flourish.
In China, The Eastern China Grid Corp., a subsidiary company of the State Grid Corp of China (SGCC), started feasibility research on "smart grid" technology in October 2007. Zhenya Liu, General Manager of the SGCC, China's largest power grid builder, met with the U.S. Secretary of Energy on April 24, 2009. Liu said that "the SGCC is constructing ultra-high and extra-high voltage direct current (+/-800 kV, +/-500 kV) and alternating current transmission systems (1000 kV, 500 kV, 220 kV), and coordinating the development of a smart grid based on information technology and automation technology."
Known as the largest utility in the world, the SGCC serves 26 provinces and 1.08 billion people throughout China. The SGCC released that it is speeding up the construction of the power network on May 7, 2009.
According to Pinky Wang, Consultant of Energy and Power System practice, Frost & Sullivan China, the smart grid in China focuses more on the transmission side than the distribution side at present. Based on the fact that coal is the main energy source in China and coal mines are far away from the main load centers, it is the right choice that the power grid development be focused on the transmission network. China has been constructing a unified national power grid network. The project includes what is known as the West-East Electricity Transfer Project, which includes three major west-east transmission corridors construction. The transmission capacity of each corridor will be 20 GW by 2020. Through these transmission grids, electricity distributors in China will bond regional power grids in different areas of the country and improve cross-region electricity transmission ability. This will balance the power generation disparities in different regions.
Frost & Sullivan foresees that smart grid will play more and more important roles in the development of China's national economy in the future. Strong and robust smart grids can solve the current problems and improve the economy of electricity supply, saving energy, ensuring a high-quality power supply, and serving environment protection.
SGCC has made power grid construction its core business operation for the time being and a strategic objective in the long run. In developing a power grid for the transmission network, SGCC has been deploying several technologies, such as a Wide Area Measurement System (WAMS) and an information system integration project.
WAMS uses the phasor measurement unit (PMU), based on the Global Positioning System to develop the stability of power grids. SGCC is building a WAMS and by 2012 plans to have PMU sensors at all generators of 300 MW and above and all substations of 500 kV and above. SGCC has been deploying extensive fiber-optic networking throughout Chinese high-voltage substations. This network amounts to over 1 million km of fiber-optic channels. In recent years, SGCC has been applying the SG 186 project, an information system integration project.
According to Wang, there will be a lot of business opportunities for smart grid–relevant industries, such as smart metering systems, power storage devices, telecommunication devices, and software.
She concludes, "The development speed of smart grids in China depends on these key decision makers of state grid. In the future, the best way to occupy the Chinese smart grid market is to form alliances between several relevant companies and provide a bunch of solutions for the implementation of smart grid in a special area, as General Electric, Cisco Systems, and Silver Springs Networks teamed up to work on the Miami smart-grid in the United States."
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