Will new power grids gain trust if China’s provinces?

Will new power grids gain trust if China’s provinces?

The State Grid Corp of China (SGCC), the nation's largest electricity transmission company, has signed an agreement with the Tibet Autonomous Region government to form a power company, namely the Tibet Power Co. Ltd.

Tibet Power Co. Ltd will enjoy a series of preferential policies, so as to achieve the goal of providing electricity to every rural household in the country by 2010, the end of the 11^th Five-Year Plan. It will also serve as the main body for the central government's financial support for power construction in the region. The new company will be jointly invested by SGCC and the local government. Being the larger stake holder, SGCC will invest more than RMB 200 billion this year to help promote hydropower development, develop new energies, and expand the grid network and power supply coverage in the region.

The SGCC plans to invest over 200 billion yuan this year in a further effort to provide electricity to every rural household in the country during the 11th Five-Year Plan (2006-10). It invested 176 billion yuan to extend its grid in 2006, up 47% year-on-year. The company last year began to build China's first ultra-high voltage transmission line, the country's first move to transmit power over a long distance using 1,000-kilovolt (kV) alternating current.

The line, which will stretch 653.8 kilometers and cross China's Yellow River and the Hanjiang River, will transmit power produced in Shanxi Province, China's largest coal production base, to Nanyang city of Central China's Henan Province and then on to Jingmen city of Central China's Hubei Province. With an estimated cost of over 5 billion yuan, the grid is designed to have a rated voltage of 1,000-kV, and a transmission power of 5 million kilowatts.

The SGCC has also built 30 exchange stations that play an important role in building a power system by optimizing allocation. China's grid companies are now investing billions of yuan to connect power networks. Two giant companies, the SGCC and China Southern Power Grid Co Ltd, are increasing expansion of the nationwide power grid, which will involve a total investment of more than 1 trillion yuan during the 11th Five-Year Plan. Expansion of the grid will mainly focus on the West to East Power Transmission Project, said Wang Yonggan, secretary of the China Electricity Council.

Formerly know as “State Power Corporation”, SGCC operates both the electric grid and power plants all over mainland China. Currently, it focuses on connecting and expanding the power networks around the country and while doing so, it seems that China is playing the electricity card to gain more regional legitimacy. What will be the effect of giving more autonomy to independent power producers? After Tibet, who else will benefit from Chinese massive potential in the energy sector?