no mechanism to coordinate the actions of these
institutions. All institutions in the electricity
sector are overseen by central government.
The Chinese transmission system comprises a
set of partially interconnected provincial transmission systems, with some additional interconnections at the regional level. State Grid
Corporation of China and China Southern Power
Grid are in charge of regional interconnectors,
while the regional grid companies control interconnectors between provinces, and provincial
grid companies manage the transmission network
within their provinces.
The Chinese transmission grid is operated by
provincial grid companies. Electricity dispatch and
trading centres develop generation schedules and
manage congestion. The provincial grid companies
schedule annual and monthly generation and also
manage ancillary services. Scheduling of generation is determined by provincial governments
based on an allocation of operating hours, rather
than on need. This causes significant curtailment of
renewable electricity, if alternative generators are
scheduled to operate at times of high renewable
output. In 2015, total renewable curtailment
amounted to 1.6% of China’s electricity demand.
Figure 37 shows the structure of the Chinese power
sector before and after the 2002 reform. The reform
aimed to aggregate the provincial markets into six
regional markets, but this is still in progress.
(2) Transmission investment
Network planning follows a top-down process.
The National Development and Reform Commission’s (NDRC) five-year plans define general
network investment programmes. These programmes are aimed at driving economic growth,
rather than meeting reliability or economic efficiency targets. Provincial governments and local
NDRC branches refine these general investment
programmes for their administrative territory,
typically without stakeholder consultation.
In line with the multilevel structure of the grid
companies, investment in the transmission network
follows a multilevel structure. State Grid Corporation of China and China Southern Power Grid
invest in interconnectors between regions, while
the regional grid companies invest in interconnectors between provinces, and provincial grid companies are responsible for the transmission network
Fig. 37 Structure of the Chinese electricity system. Note
State-owned companies are in red, privately-owned
companies are in blue; SGCC is the State Grid
Corporation of China and CSG is China Southern Power
Grid. Source Vivid Economics
Special Report 1: A Study of China’s Energy Supply Revolution
105
institutions. All institutions in the electricity
sector are overseen by central government.
The Chinese transmission system comprises a
set of partially interconnected provincial transmission systems, with some additional interconnections at the regional level. State Grid
Corporation of China and China Southern Power
Grid are in charge of regional interconnectors,
while the regional grid companies control interconnectors between provinces, and provincial
grid companies manage the transmission network
within their provinces.
The Chinese transmission grid is operated by
provincial grid companies. Electricity dispatch and
trading centres develop generation schedules and
manage congestion. The provincial grid companies
schedule annual and monthly generation and also
manage ancillary services. Scheduling of generation is determined by provincial governments
based on an allocation of operating hours, rather
than on need. This causes significant curtailment of
renewable electricity, if alternative generators are
scheduled to operate at times of high renewable
output. In 2015, total renewable curtailment
amounted to 1.6% of China’s electricity demand.
Figure 37 shows the structure of the Chinese power
sector before and after the 2002 reform. The reform
aimed to aggregate the provincial markets into six
regional markets, but this is still in progress.
(2) Transmission investment
Network planning follows a top-down process.
The National Development and Reform Commission’s (NDRC) five-year plans define general
network investment programmes. These programmes are aimed at driving economic growth,
rather than meeting reliability or economic efficiency targets. Provincial governments and local
NDRC branches refine these general investment
programmes for their administrative territory,
typically without stakeholder consultation.
In line with the multilevel structure of the grid
companies, investment in the transmission network
follows a multilevel structure. State Grid Corporation of China and China Southern Power Grid
invest in interconnectors between regions, while
the regional grid companies invest in interconnectors between provinces, and provincial grid companies are responsible for the transmission network
Fig. 37 Structure of the Chinese electricity system. Note
State-owned companies are in red, privately-owned
companies are in blue; SGCC is the State Grid
Corporation of China and CSG is China Southern Power
Grid. Source Vivid Economics
Special Report 1: A Study of China’s Energy Supply Revolution
105