Billions invested in grid's modernization

China Southern Power Grid has pledged to continue investing in digital power grid construction, including a digital grid across Guangdong, Yunnan, Guizhou and Hainan provinces and the Guangxi Zhuang autonomous region.

The company, one of the country's two major power grids, said it will invest more than 26 billion yuan ($4.1 billion) in the construction of a digital power transmission network, the core of a new power system, during the 14th Five-Year Plan period (2021-25). It would ensure that the power system operates safely and stably, and optimizes the allocation of resources on a large scale.

By applying artificial intelligence, big data, simulation modeling and the internet of things, the network is expected to be more responsive in operation and dispatch, while digitalization can also provide support to the grid network's systems for early detection of problems and intelligent intervention, it said.

This is also in accordance with the government's blueprint for the development of the digital economy, which aims to increase the contribution of core digital economy industries to 10 percent of the GDP by 2025.

According to the 2022 Government Work Report, China aims to boost its global competitiveness in advanced technologies such as semiconductors and AI. To promote digital transformation, large companies are encouraged to focus on the integration of new technologies such as 5G and artificial intelligence with China's real economy. Analysts forecast that the use of data will help transform the country's electric power grid into an innovation engine.

The company's work on grid digitalization is aligned with the recent strategy laid out for a modern energy system during the 14th Five-Year Plan by the National Development and Reform Commission and National Energy Administration. The strategy specified digitalization as a key part of business model innovation in the energy sector, said Wei Hanyang, a power market analyst at research firm BloombergNEF.

According to the modern energy system plan, China's share of nonfossil energy consumption will increase to around 20 percent by 2025, and the proportion of non-fossil power generation will be around 39 percent by then. The country is also expected to develop high-quality solar and wind power on a large scale. Priority would be given to local development and utilization while speeding up the construction of decentralized wind and distributed photovoltaic power in load centers and surrounding areas.

"As renewable power gains a higher penetration in the grid, it is compelling to integrate it smartly with other power sources and deal with intermittency automatically," said Wei.

Intermittency means that many forms of renewable energy, like solar and wind, do not consistently produce energy at all hours.

A digital power grid will better facilitate the consumption of power increasingly produced by clean energy while further facilitating China's ambition to achieve a carbon peak by 2030 and carbon neutrality by 2060, he said.

"China Southern Power Grid also has two major pilot projects on power trading in Guangdong and Yunnan provinces, which provide both challenges and opportunities for the country's in-depth digitalization of its power networks," he added.

The company will substantially increase the degree of intelligent operation in its digital power grid, its digital operational efficiency and its network security protection and operation and maintenance level by 2025. That will lead to it becoming a world-leading utility company and benchmark for digital transformation, the company said.

The digital network will better support a new power system that gradually increases the proportion of new energy utilization, which is expected to further boost the industry's prospects amid the nation's progress toward carbon neutrality, said Meng Zhenping, president of the company.

China Southern began the planning and construction of a digital power network during the 13th Five-Year Plan period (2016-20), laying a solid foundation for the company's digital transition.

As a pilot digital project, the power network in Guangdong allows the digital power network to support macroeconomic analysis, environmental management and poverty alleviation enhancement in Guangdong province.