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State Grid to Spend US$100b on Network
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China's flagship grid company, the State Grid Corp of China (SGCC), said it will spend 800 billion yuan (US$98.6 billion) over the next five years to upgrade the country's electricity transmission network.


"The total investment will be equally divided from this year to 2010, which translates into 160 billion yuan (US$19.7 billion) each year," a company official, wishing to remain anonymous, told reporters.


State Grid plans to almost double its electricity-selling volume to 2,200 billion kilowatt-hours within the next five years.


It also aims to increase its revenue to 1.1 trillion yuan (US$135.6 billion) by 2010 from last year's 721.4 billion yuan (US$89 billion), Liu Zhenya, president of SGCC, told the company's annual conference.


The Beijing-based electricity distributor last year made a net profit of 14.4 billion yuan (US$1.8 billion), by selling 1,464.6 billion kilowatt-hours of electricity. Its 2005 net profit increased by 45 per cent from the previous year.


Its new investment will be used to build transmission lines and enhance existing ones, State Grid said.


A major investment project is the ultra high-voltage transmission line of over 800 kilovolts, which will be able to transport electricity from resource-rich areas, such as the north and west, to the energy-guzzling east and south. It could substantially reduce electricity loss incurred during the transmission process.


The company put a 750-kilovolt line into operation in September last year, linking Guanting, in Qinghai Province, with Lanzhou, Gansu Province. It was one of the world's top transmission projects, with the highest voltage built at the highest altitude, State Grid said.


Sources earlier said another two 1,000-kilovolt lines for transmitting from Yulin, in Shaanxi Province, to Wuhan, Hubei, and from Anhui's Huainan to Shanghai are also in progress.


The massive investment plan is in line with the building of new power plants across the nation to drive the fast-growing economy.


Li Qionghui, a director with SGCC's research arm, predicted that China would almost double its electricity generating capacity to 1,000 GW (gigawatts) by 2020 from last year's 510 GW.


China Huaneng Group, the country's biggest power firm, said last week it planned to increase capacity to 80 GW (gigawatts) within the next five years, from last year's 43.2 GW.


State Grid invested more than 100 billion yuan (US$12.3 billion) last year, the company said. About 20,000 kilometres of transmission lines with a capacity of over 200 kilovolts came on stream.


This year, the company plans to put another 20,000 kilometres of electricity distribution lines into operation, and its profit is expected to grow by 18 per cent, SGCC said in a statement.


China, the world's second-biggest energy consumer after the United States, last year used 2,475.4 billion kilowatt-hours of electricity, a year-on-year increase of 13.6 per cent. Areas that suffered from electricity shortfalls are concentrated in north, east, south and central regions, State Grid said.


The situation will be greatly alleviated by next year, as new power generation facilities are started and new transmission lines become operational, said Wang Yonggan, secretary-general of the China Electricity Council, an industry consortium for power producers.


State Grid said electricity demand will be balanced by supply this year and next, except for a light shortage in the western parts of the Inner Mongolia Autonomous Region, southern Hebei Province and Shanxi Province.


"Particular regions, such as East China's Shandong Province, will see a supply surplus," State Grid said.


(China Daily January 24, 2006)


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