The People's Republic of China (PRC) has a fast growing electricity rate
of demand, (8.3% from 1980 to 1995, and 6% forecast for up to 2020, compared with the USA
and Western Europe rate of about 1.9%). The remotely located huge hydropower schemes require
new transmission lines, plans to construct combined cycle thermal stations (instead of
building new coal fired stations) for environmental and economic effectiveness could mean
new gas pipe lines are also needed to be built. These long distances between supply and
demand centers and the expectations to speed up harmonization of the PRC electricity market,
for operations and capacity expansion planning, therefore raise a number of strategically
crucial policy planning problems. Energy by wire or by pipe and the hydro-thermal generation
mix prompt provoking policy and planning issues for the PRC.
Inevitably with the hydropower and natural gas supplies being located so
far from the demand centers the cost of shipment becomes a decisive operational variable.
The shipment of coal supplies across the PRC to electricity generating sites has been a
constant concern to PRC planners. The costly long HVDC transmission lines will still involve
significant line losses over lengthy distances (10% and more) of several hundred km or
more. Similarly the cost of gas pipelines will be a parallel problem and one that becomes
more complex as harmonization gets considered more seriously. The level of cooperation
and increased interconnectivity between the provinces of the PRC must be planned hand in
hand with the expected type of pool being developed. The tight (very limited electricity
trading) and open (flexible electricity trading is permitted) power pools require very
different amounts of transmission capacity. Free trading across a region can cause congestion
if insufficient load carrying capability is available interfering with using the grid for
reliability. How much integration of these alternative fuel shipment lines should take
place?
The substitution of gas by wire, planning of reserve requirements, accounting
for load diversity across the extents of the PRC, consideration of economies of scale,
and joint planning are each a vital issue that will be assessed in the configuration of
proposed new pools in the PRC.
Phase 1 of the proposal (2002 to 2003), of a planned three year project,
would involve establishing the China-Purdue partnerships, appropriately compiling of the
latest Chinese electricity data-set, and preparing the preliminary regional electricity
market model for specified provinces within China.
