that intelligently manages power using secure
communications and advanced power electronics. The German eTelligence project used Internet technologies to build a real-time electricity
balancing and trading system, which manages
intermittent, fluctuating levels of energy output
using load adjustment to integrate new energy
sources with the grid. It also provides a real-life
example of how energy allocation can be adjusted using a real-time electricity trading system.
And in China, the State Grid Corporation has
initiated the concept of the “global energy
Internet”, a globally connected smart grid that is
designed to allow clean power transmission
through ultra-high voltage transmission systems.
There are many other pilot projects that are
focused on achieving optimal integration of distributed energy and microgrids. For instance,
GCL’s distributed micro-energy grid and ENN’s
Ubiquitous Energy Network (UEN) are both
examples of a complementary regional
multi-energy Internet that works across an
extended industry chain. GCL has mainly
focused on solar photovoltaic and combined heat
and power, although it also operates in natural
gas and smart energy; while ENN is mainly
focused on fuel gas and the processing of fuel gas
for power generation and cooling and heating
services.
For traditional power grid businesses, the
Energy Internet brings significant challenges. In
particular, the deregulation of the distribution
network and the openness and sharing that are
inherent in the Energy Internet will significantly
weaken these companies’ control of the grid. The
availability of more competitive products and
services will result in high-value customers
leaving traditional power grid companies; this
can already be seen in the continual customer
loss that major grid companies in other countries
have suffered after electricity market reform.
Traditional power grid enterprises therefore need
to: (i) change their mindset to one of active
competition, maintain their strength on the
demand side of the distribution network, and
proactively develop integrated energy services
like combined cooling, heat and power; (ii) develop clean energy on the supply side and in
alignment with the relevant national policies; and
(iii) focus on and incubate promising and competitive industries to rapidly connect the value
chain. In short, traditional power grid companies
need to transform themselves and become more
competitive in the market.
For traditional power generators and other
types of energy company, the era of the Energy
Internet provides both opportunities and challenges. Power generation companies can gradually move from being behind the scenes to take
centre stage and interact directly with customers.
They need, however, to diversify their business
portfolio. As demand growth for power slows
down, power generation companies will need to
adjust their business rapidly, because they are no
longer competing solely with other power generation businesses, but with companies along the
entire power value chain. To stay ahead in the
Energy Internet, traditional power generation
companies will need to focus on clean and distributed energy, and proactively develop integrated energy services that provide decision
support for the demand-response system. In
brief, they should be customer-oriented and target the end-user market.
For new energy companies, the Energy
Internet will bring substantial financial benefits;
many of these companies have already achieved
fame and wealth from it. The conservative
approach of the traditional energy companies,
which often translates into a wait and see strategy, means that they have yet to show up fully as
competitors. New energy companies should,
therefore, take advantage of this opportunity and
capitalise on their strengths by developing
benchmark projects and industry standards, in
readiness for a future counter-attack by the
energy majors. In short, new energy companies
should develop a flexible approach in order to
proactively guide industry trends.
For power equipment companies, the Energy
Internet undoubtedly poses higher demands on
those implementing the Made in China 2025
strategy. For these companies, their top priorities
are to address the weak integration of energy and
the Internet, and to support and drive improvement in power equipment manufacturing. They
Special Report 4: China’s Energy System Revolution
407
communications and advanced power electronics. The German eTelligence project used Internet technologies to build a real-time electricity
balancing and trading system, which manages
intermittent, fluctuating levels of energy output
using load adjustment to integrate new energy
sources with the grid. It also provides a real-life
example of how energy allocation can be adjusted using a real-time electricity trading system.
And in China, the State Grid Corporation has
initiated the concept of the “global energy
Internet”, a globally connected smart grid that is
designed to allow clean power transmission
through ultra-high voltage transmission systems.
There are many other pilot projects that are
focused on achieving optimal integration of distributed energy and microgrids. For instance,
GCL’s distributed micro-energy grid and ENN’s
Ubiquitous Energy Network (UEN) are both
examples of a complementary regional
multi-energy Internet that works across an
extended industry chain. GCL has mainly
focused on solar photovoltaic and combined heat
and power, although it also operates in natural
gas and smart energy; while ENN is mainly
focused on fuel gas and the processing of fuel gas
for power generation and cooling and heating
services.
For traditional power grid businesses, the
Energy Internet brings significant challenges. In
particular, the deregulation of the distribution
network and the openness and sharing that are
inherent in the Energy Internet will significantly
weaken these companies’ control of the grid. The
availability of more competitive products and
services will result in high-value customers
leaving traditional power grid companies; this
can already be seen in the continual customer
loss that major grid companies in other countries
have suffered after electricity market reform.
Traditional power grid enterprises therefore need
to: (i) change their mindset to one of active
competition, maintain their strength on the
demand side of the distribution network, and
proactively develop integrated energy services
like combined cooling, heat and power; (ii) develop clean energy on the supply side and in
alignment with the relevant national policies; and
(iii) focus on and incubate promising and competitive industries to rapidly connect the value
chain. In short, traditional power grid companies
need to transform themselves and become more
competitive in the market.
For traditional power generators and other
types of energy company, the era of the Energy
Internet provides both opportunities and challenges. Power generation companies can gradually move from being behind the scenes to take
centre stage and interact directly with customers.
They need, however, to diversify their business
portfolio. As demand growth for power slows
down, power generation companies will need to
adjust their business rapidly, because they are no
longer competing solely with other power generation businesses, but with companies along the
entire power value chain. To stay ahead in the
Energy Internet, traditional power generation
companies will need to focus on clean and distributed energy, and proactively develop integrated energy services that provide decision
support for the demand-response system. In
brief, they should be customer-oriented and target the end-user market.
For new energy companies, the Energy
Internet will bring substantial financial benefits;
many of these companies have already achieved
fame and wealth from it. The conservative
approach of the traditional energy companies,
which often translates into a wait and see strategy, means that they have yet to show up fully as
competitors. New energy companies should,
therefore, take advantage of this opportunity and
capitalise on their strengths by developing
benchmark projects and industry standards, in
readiness for a future counter-attack by the
energy majors. In short, new energy companies
should develop a flexible approach in order to
proactively guide industry trends.
For power equipment companies, the Energy
Internet undoubtedly poses higher demands on
those implementing the Made in China 2025
strategy. For these companies, their top priorities
are to address the weak integration of energy and
the Internet, and to support and drive improvement in power equipment manufacturing. They
Special Report 4: China’s Energy System Revolution
407