State Grid Corporation of China should be allowed to connect regional power grids with ultra-high voltage (UHV) transmission lines as it would help lower power prices nationwide and reduce smog caused by coal-burning in coastal regions, its chief says.
The power distribution firm's chairman, Liu Zhenya, told a panel discussion on the sidelines of the Chinese People's Political Consultative Conference a UHV line linking Xinjiang to Shanghai could result in a kWh price of 10 fen (12 HK cents) to 20 fen, a roughly 25 per cent savings on power sold in Shanghai.
Adding generators' on-grid coal-fired power selling price of 25 fen per kWh in Xinjiang to an estimated transmission cost of 13 fen, the total cost amounted to 38 fen when the power reached Shanghai, he said.
This compares to Shanghai's current on-grid power price of 50 fen to 60 fen per kWh.
"If this is deployed on a big scale, power prices nationwide will come down," he said.
Sending coal-fired and clean energy from solar and wind resource-rich western regions to consumption centres in central and coastal areas would help cut air pollution, which has worsened in recent years and was one of the central government's top policy priorities, he said.
State Grid estimates that if its UHV grid connection plan is fully implemented, central and eastern regions' readings of PM2.5, the particles of pollution thought to be most harmful to health, would fall by 28 per cent by 2020 compared to 2010's levels.
Liu said State Grid has already commissioned five UHV pilot projects since 2005.
The company said in 2009 it planned to build many more UHV lines to create a highly interconnected national grid network by 2020, which analysts estimated would cost about 600 billion yuan.
The ultra-high voltage lines' investment cost per unit of transmission capacity is estimated to be around 30 per cent less than current high-voltage lines. But industry executives and analysts said State Grid, the monopoly power distributor in all but the mainland's five southern provinces, has been facing difficulties getting approval for new projects due to concerns an interdependent national network would pose a security risk.
They noted Russia and Japan had developed UHV pilot programmes several decades ago, but did not pursue them commercially.
"China has a loosely interconnected system with highly regionalised distribution networks," said Robert Blohm, a Beijing-based independent energy industry consultant who had advised the government.
"The more integrated the system, the more vulnerable it is to failures caused by human or natural causes."