China to export electricity along the New Silk Road

In tune with its One Belt, One Road initiative, China is positioning itself as a formidable energy exporter, targeting markets that span from Germany to India along the New Silk Road.

Two factors are driving Beijing’s ambitions of emerging as a regional electric supply hub. First, China is already a surplus power producer following a decade of continuous investments at home in all forms of energy. Since 2004, when it suffered chronic outages that threatened to restrain its manufacturing, the Chinese went into overdrive, investing heavily in hydro and coal-fired plants, apart from escalating development of nuclear and renewable energy.

Second, China has mastered ultra–high voltage (UHV) technology, which has allowed State Grid, China’s state-owned power behemoth, to transmit electricity from production centres in West — in places such as Xinjiang — to coastal industrial centres in the faraway east.

“China has the technical capacity to increase the voltage to 1500 kilovolts, so that it can transport power 8,000 km away. And it is financially viable to expand,” Liu Zhenya, State Grid head, has been quoted as saying.

Now, with Xinjiang in western China as the hub, China has the proven technological heft to transmit electricity as far as Germany.

The Financial Times quoted Mr. Liu as saying that his company was eyeing other potential markets such as Pakistan, India and Myanmar. Last week, State Grid also tied up with South Korea’s utility Korea Electric Power, SoftBank of Japan and Russia’s Rosetti PJSC to study the feasibility of establishing an “Asian Supergrid.”

The study would culminate the 2012 proposal of Masayoshi Son, chairman of Softbank, who had visualised the Supergrid that would source power from Mongolia’s huge wind farms and supply renewable power to South Korea, Japan, China and possibly Russia.

While focusing on the One Belt One Road for now, Mr. Liu has even more ambitious plans. Bloomberg News is reporting that State Grid is “actively in bidding” for power assets in Australia, hoping to add them to a portfolio of Italian, Brazilian and Filipino companies. The idea is to connect these and other power grids to a global grid that will draw electricity from windmills at the North Pole and vast solar arrays in Africa’s deserts, and then distribute the power to all parts of the world.