Targeted outcome: Regional electricity systems capable of integrating high penetration of
renewables, and the use of surplus power, while
connecting millions of electric vehicles.
In order to achieve such an outcome, the
complexity of connecting electricity systems
across borders via interconnectors requires governments to take the lead in several areas. China
and its regional partners require harmonised
national electricity markets to trade electricity
effectively through interconnectors. The avoidance of stranded assets and ensuring the future
connection of high renewable supply with high
demand regions requires regional planning to
avoid lock-in and lock-out. Further, as electricity
markets become increasingly interconnected the
risks of cyberattack are best mitigated by
strengthening regulations across jurisdictions.
Staggered smart EV charging, such that
demand is spread over the evening when drivers
return home to flatten and reduce peak demand,
requires international standardisation of charging
infrastructure. Scaling up the deployment of
lithium-ion stationary battery storage requires
alignment of investment strategies towards
lithium-ion.
To achieve such an outcome China could
adopt two distinct strategic cooperation
pathways:
(1) regionally connected, coordinated and secure
electricity markets enabling cross-border trade
of electricity through interconnectors; and
(2) international cooperation to accelerate smart
management of EV electricity demand and
vast deployment of cost-effective electricity
storage.
9.2 Strategic Regional Forums
to Drive Reforms
The BRI could provide a platform for the
regional planning of interconnectors, as well as
working with international partners to learn and
implement crucial lessons in the electricity market reforms required to connect electricity markets effectively. Working in partnership with
ASEAN Plus Three could enable greater participation and buy-in from regional partners. On EV
charging and deployment of affordable storage,
IRENA is well placed to host a China-led initiative to drive the agenda internationally.
9.3 Rationale for Action
While both strategic pathways facilitate the shift
from molecules to electrons—improving air
quality and maintaining reliability of electricity
supply—further benefits, or win-wins, for China
and its international partners can be identified.
China can benefit from opportunities to export
surplus electricity and reduce electricity costs
through grid interconnection and balancing:
regional electricity trade saves consumers money
and decreases capacity margin requirements for
China and its partners. Cooperation on energy
interdependence can build trust among partners,
creating wider benefits.
Internationally standardised smart EV charging stations reduce all countries’ EV deployment
limits by lowering peak demand, while removing
limits to interoperability between various EV and
charging infrastructure manufacturers—enabling
China to export more EVs. Further, China and its
partners benefit mutually from the reduced need to
strengthen grid capacity and the increased potential this allows for more renewables. Lower EV
integration limits improve air quality in cities,
which is especially important for China, while
reduced EV import costs benefit China’s partners.
As the global leader in lithium-ion, solar
photovoltaic and wind turbine manufacturing,
China will benefit from increased exports.
9.4 Strategic Pathways
(1) Regional cross-border trade of electricity
China could use the BRI to establish two
multilateral clubs that would work in parallel
to enable interconnector-facilitated crossborder trade of electricity. This may be
more effective working in partnership with
the ASEAN Plus Three forum. The first club
Special Report 5: International Energy Cooperation and Governance
657
renewables, and the use of surplus power, while
connecting millions of electric vehicles.
In order to achieve such an outcome, the
complexity of connecting electricity systems
across borders via interconnectors requires governments to take the lead in several areas. China
and its regional partners require harmonised
national electricity markets to trade electricity
effectively through interconnectors. The avoidance of stranded assets and ensuring the future
connection of high renewable supply with high
demand regions requires regional planning to
avoid lock-in and lock-out. Further, as electricity
markets become increasingly interconnected the
risks of cyberattack are best mitigated by
strengthening regulations across jurisdictions.
Staggered smart EV charging, such that
demand is spread over the evening when drivers
return home to flatten and reduce peak demand,
requires international standardisation of charging
infrastructure. Scaling up the deployment of
lithium-ion stationary battery storage requires
alignment of investment strategies towards
lithium-ion.
To achieve such an outcome China could
adopt two distinct strategic cooperation
pathways:
(1) regionally connected, coordinated and secure
electricity markets enabling cross-border trade
of electricity through interconnectors; and
(2) international cooperation to accelerate smart
management of EV electricity demand and
vast deployment of cost-effective electricity
storage.
9.2 Strategic Regional Forums
to Drive Reforms
The BRI could provide a platform for the
regional planning of interconnectors, as well as
working with international partners to learn and
implement crucial lessons in the electricity market reforms required to connect electricity markets effectively. Working in partnership with
ASEAN Plus Three could enable greater participation and buy-in from regional partners. On EV
charging and deployment of affordable storage,
IRENA is well placed to host a China-led initiative to drive the agenda internationally.
9.3 Rationale for Action
While both strategic pathways facilitate the shift
from molecules to electrons—improving air
quality and maintaining reliability of electricity
supply—further benefits, or win-wins, for China
and its international partners can be identified.
China can benefit from opportunities to export
surplus electricity and reduce electricity costs
through grid interconnection and balancing:
regional electricity trade saves consumers money
and decreases capacity margin requirements for
China and its partners. Cooperation on energy
interdependence can build trust among partners,
creating wider benefits.
Internationally standardised smart EV charging stations reduce all countries’ EV deployment
limits by lowering peak demand, while removing
limits to interoperability between various EV and
charging infrastructure manufacturers—enabling
China to export more EVs. Further, China and its
partners benefit mutually from the reduced need to
strengthen grid capacity and the increased potential this allows for more renewables. Lower EV
integration limits improve air quality in cities,
which is especially important for China, while
reduced EV import costs benefit China’s partners.
As the global leader in lithium-ion, solar
photovoltaic and wind turbine manufacturing,
China will benefit from increased exports.
9.4 Strategic Pathways
(1) Regional cross-border trade of electricity
China could use the BRI to establish two
multilateral clubs that would work in parallel
to enable interconnector-facilitated crossborder trade of electricity. This may be
more effective working in partnership with
the ASEAN Plus Three forum. The first club
Special Report 5: International Energy Cooperation and Governance
657