Is China’s ‘global energy internet’ plan growing in power? Yes, but not as President Xi Jinping envisioned
  • For six years, China has been pushing the idea of a worldwide network of supergrids, a reality that could arrive regardless as countries tackle climate goals

Ever since President Xi Jinping pitched the idea of a “global energy internet” to the United Nations six years ago, China has been trying to persuade the world to build the high-voltage highways that would form its backbone. That plan to wrap the planet in a web of intercontinental, made-in-Beijing power lines has gone pretty much nowhere. Yet the fortunes of so-called supergrids appear to be turning, if not on quite the spectacular, Bond-villain scale Xi first envisaged.

China has both a manufacturing and technological edge in ultra-high-voltage direct current (UHVDC) transmission lines, and has taken a lead in proposing global technical standards and governance for them. If Xi’s plans are ever realised, those are advantages that some believe could have profound geopolitical implications, granting China power and influence similar to that which the United States gained by shaping the global financial system after World War II.

Yet it is not China that is driving renewed interest in cables that can power consumers in one country with electricity generated hundreds, even thousands of miles away in another. Instead, carbon-neutrality commitments, technological advances and improved cost incentives are accelerating a broad expansion of renewable power generation.

Coal, gas and even nuclear plants can be built close to the markets they serve, but the utility-scale solar and wind farms many believe essential to meet climate targets often cannot. They must be located wherever the wind and sun are strongest, which can be hundreds or thousands of miles from urban centres. Long cables can also connect peak afternoon solar power in one time zone to peak evening demand in another, reducing the price volatility caused by mismatches in supply and demand as well as the need for fossil-fuelled backup capacity when the sun or wind fade.

China aims for greener energy mix with higher non-fossil fuel target

As countries phase out carbon to meet climate goals, they will have to spend at least US$14 trillion to strengthen grids by 2050, according to Bloomberg New Energy Finance. That is only a little shy of projected spending on new renewable generation capacity and it is increasingly clear that high- and ultra-high-voltage direct current lines will play a part in the transition. The question is, how international will they be?

In April, the European Union set up a working group to help supersize its grid, already the world’s most developed international system for trading electricity, with goals including development of a multi-nation offshore network for wind farms. Denmark in February announced plans to construct one piece, a US$34 billion artificial energy island that will sit at the heart of a hub-and-spoke transmission system. With an eventual targeted capacity of 10 gigawatts, the project would add two-thirds to Denmark’s total existing generation capacity, too much to serve only its home market.

An impression of the artificial energy island in Denmark, surrounded by offshore wind turbines, 260 metres (850 feet) in height. Photo: The Danish Energy Agency

Even in the US, which has lagged on grid integration – as the deadly, multiday blackout in Texas revealed in February – interest is stirring. A March report from Breakthrough Energy, a group funded by Microsoft founder Bill Gates, offered scenarios for transcontinental high-voltage direct current (HVDC) lines to unite the three still-separate US grids.

US President Joe Biden’s infrastructure proposal includes US$100 billion for power grids and would establish a new Grid Deployment Authority “to spur additional high-priority, high-voltage transmission lines” along federal highways, although it is not certain how much of that will make it through Congress. And a study commissioned by agencies in Canada, Mexico and the US on the potential to connect their grids is due to be published this year.

For people who have been promoting the idea of supergrids for years, it feels as though the winds have turned in their favour. “I think our time has come,” says Mika Ohbayashi, director of the Renewable Energy Institute. The Tokyo-based organisation was set up in the wake of the 2011 Fukushima nuclear disaster by Softbank Group founder Masayoshi Son. Its mission is to promote a Northeast Asia supergrid that would connect China, Japan, Mongolia, Russia and South Korea. “I cannot imagine a Japan in 2050 which is still isolated from everywhere else,” says Ohbayashi.

Mika Ohbayashi, director of the Tokyo-based Renewable Energy Institute. Photo: Renewable Energy Institute

Europe has been building HVDC connectors to allow the controlled supply of power from one nation’s AC grid to another for decades. In 2018, European countries traded just over 9 per cent of their electricity across borders, compared with less than 2 per cent in the Americas and 0.6 per cent in Asia, according to the International Energy Agency. The trade tends to reduce prices by increasing competition. It also boosts resilience, ensuring that should one nation’s grid suffer a catastrophic outage, it could simply draw from others to keep the lights on.

But it is the need for long-distance transmission that is driving a lot of the interest in supergrids right now, as the dash to replace fossil fuels with renewable energy gathers pace. That’s especially true for offshore wind farms, seen as a key growth area for renewables. Although converting from AC to DC and back again at each end of a cable is expensive, lower loss rates mean that HVDC power lines become economical over distances greater than about 800km above ground, and 50km for buried and submarine cables.

Hornsea 1, currently the world’s largest offshore wind farm, is 120km off the British coast. Dogger Bank, an even bigger British project once complete, will be 8km further. And with the development of turbines on floating platforms, there are few limits on how far wind farms can be pushed out to sea. Last month, Hitachi ABB Power Grids, a major provider of HVDC technology, launched a new line of transformers developed specifically for floating turbines.

From a US perspective, this is something to be worried about
Phillip Cornell, energy specialist, Washington’s Atlantic Council, on the State Grid Corporation of China’s recent buying spree

HVDC cables can also make viable the construction of remote, power plant-size renewable installations on land. Mongolia’s Gobi Desert is at the heart of the Northeast Asia supergrid project promoted both by China and Ohbayashi’s institute. In theory, the Gobi has potential to deliver 2.6 terawatts of wind and solar power – more than double the entire installed power-generation capacity of the US – to a group of Asian powerhouse economies that together produce well over a third of global carbon emissions. The Gobi’s potential remains largely unrealised, in part because there is currently little means to deliver the power produced there beyond Mongolia’s tiny market.

The same goes for the US, where with the right infrastructure, New York could tap into sun- and wind-rich resources in the South and Midwest.

An even more ambitious vision would access power from as far afield as Canada or Chile’s Atacama Desert, which has the world’s highest known levels of solar power potential per square metre. Jeremy Rifkin, a US economist who has become the go-to figure for countries looking to remake their infrastructure for the digital and renewable future, sees potential for a single, 1.1 billion-person electricity market in the Americas that would be almost as big as China’s. Rifkin has advised Germany and the EU, as well as China; Xi’s vision of a global energy network is straight out of his 2011 book, The Third Industrial Revolution.

US economist Jeremy Rifkin. Photo: Hindustan Times via Getty Images

Persuading countries to rely on each other to keep the lights on is tough, but the universal, yet inter­mittent nature of solar and wind energy also makes it inevitable, according to Rifkin. “This isn’t the geo­politics of fossil fuels,” owned by some and bought by others, he says. “It is biosphere politics, based on geography. Wind and sun force sharing.”

If transcontinental, submarine electricity super-highways indeed lie in our shared future, China is showing the way. In December, it completed a US$3.45 billion, 1,560km-long, 800-kilovolt UHVDC line to carry solar- and wind-generated power from the high Tibetan plains to China’s centre. That followed construction of a 1.1 million-volt cable that can transmit up to 12,000 megawatts of power – a little more than the entire installed generation capacity of Ireland – from the deserts and mountains of Xinjiang province to the doorstep of Shanghai, almost 3,200km east. (High-voltage cables are classed as 500 kilovolts and above while ultra-high voltage – a Chinese speciality – operate at 800 kilovolts or above.)

The global supergrid effort has been spearheaded by Liu Zhenya, a former head of the State Grid Corporation of China (SGCC), who chairs the Global Energy Interconnection Development and Cooperation Organisation (Geidco), a UN-backed body based in Beijing. Geidco’s phased plan starts by strengthening national grids and moves on to building regional networks, before finally – around 2070 – completing construction of a full 18-channel Earth-spanning grid.

Workers on the Shandong to Hebei UHV looped network project on November 22, 2018 in Rizhao, Shandong province, China. Photo: Getty Images

SGCC, which is the world’s largest utility, has been on a buying spree that is enabling it to do some of that first-stage strengthening. Since 2008, it has acquired stakes as high as 85 per cent in electricity distribution companies in the Philippines, Portugal, Australia, Hong Kong, Brazil, Greece, Italy and, last year, Oman. Other Chinese companies have also been buying shares in foreign grids.

“From a US perspective, this is something to be worried about,” says Phillip Cornell, an energy specialist at Washington’s Atlantic Council. “It isn’t that ‘I will cut off your power,’ like Russia cut off gas supplies to Europe in 2006, or like Opec in the 70s. But the equation with the global financial system is a good one. You are laying down the backbone of countries’ power systems, and there is a lot of hardware and software involved. All of a sudden, you are in a Chinese ecosystem.”

Such ecosystem concerns led the US to pressure allies to bar China’s Huawei Technologies from participating in the building of 5G networks. In the age of the internet of things, electricity grids and communications networks will increasingly provide access to each other, an assumption that lies at the heart of Xi’s global energy plan. “Is there potential for back-door access by the Chinese state?’’ asks Cornell. “There is certainly a lot of access to consumer information – and you can imagine that, in future, would create a lot of leverage.”
To integrate such large amounts of renewables into the grid, you can talk about battery storage and other things, but grid transfer is still the most cost-effective and efficient
Jan Vande Putte, analyst, Greenpeace

If the US has not voiced the kinds of security concerns over Xi’s global grid push that it has over Huawei, that is probably because China has struggled to get its ambitions off the ground. Of the 125,000km of high-voltage grids Geidco mapped in a 2019 report, little has been built. The first stage of a Pakistan-China link, due to go live later this year, marks an exception.

The Northeast Asia supergrid, for now, remains a desktop project. The Asian Development Bank’s seven-nation Greater Mekong Subregion Power Trade and Interconnection initiative has made slow progress since its launch in 1992.

After some heavy-handed selling of supergrids in speeches and conferences – Liu has likened them to intercontinental ballistic missiles and boasted that China would set global technical standards – Beijing has begun to soft-pedal some of the more controversial proposals. One example: to create a centralised inter­national body that would direct and oversee the operation of a global grid. A Geidco representative declined to discuss the supergrid plans. Instead, she provided Liu’s speeches and reports describing the potential for a Global Energy Interconnection to end the climate crisis and produce a “global win-win”.

The Teesside Wind Farm, England, near the mouth of the River Tees off the North Yorkshire coast. Photo: PA Images via Getty Images

Ohbayashi says Japanese politicians still don’t dare even hint at the possibility that they might volunteer to hook the nation’s energy system to China’s. A Japanese energy plan released in April would double power flows between the nation’s still siloed domestic grids, but said little about connecting to other countries.

If these supergrids do not get built, it will be because their time has both come and gone. Not only are they expensive, politically difficult and unpopular – they have to cross a lot of backyards – their focus on mega-power installations seems outdated to some. Distributed microgeneration as close to home as your rooftop, battery storage and transportable hydrogen all offer competing solutions to the delivery problems supergrids aim to solve.

In China’s vision of an energy internet, these are not mutually exclusive. Jan Vande Putte, a Brussels-based energy analyst for the environmental lobby Greenpeace, concurs. “All this will be needed, but none will be enough,” he says. “To integrate such large amounts of renewables into the grid, you can talk about battery storage and other things, but grid transfer is still the most cost-effective and efficient,” he says, adding that the EU and others are likely to move incrementally, with recognisable supergrids emerging only after 2030.

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Gerhard Salge is chief technology officer at Hitachi ABB Power Grids, formed last year when Japan’s Hitachi bought 80 per cent of Swedish-Swiss ABB’s power grid business for US$6.85 billion. He has no doubt that demand for the multi-thousand ton AC/DC converters his company builds will grow. “We need to go massive into wind, into the best solar locations, and also the best onshore wind – to the desert in Chile or to Northern Russia in the Arctic wind zones, where you have permanent wind blowing all year,” Salge says. In Britain, ABB Hitachi is building a cable from Yorkshire to a unit of the Dogger Bank offshore wind farm.

Other mega-projects may take a while, though. For Mongolia, becoming the Saudi Arabia of wind and solar power might seem an irresistible opportunity. The government is publicly in favour, but after it moved the regulatory goalposts on early investors, efforts to build more renewable generation have stalled, says Aida Sitdikova, director for energy and natural resources in Russia, the Caucasus and Central Asia at the European Bank for Reconstruction and Development, which has invested in several Mongolian wind and solar projects.

“For a supergrid to take off, the country has to show that it can build renewables, can attract investment and has the appropriate regulatory environment,” says Sitdikova. Mongolia has yet to meet those tests. Last year, it did agree to develop new power generation capacity for export to China – but by building a new coal-fired plant.

More cross-border networks of high-voltage power lines are likely to be built, despite all the obstacles and competition from new technologies, says Josh Novacheck, a researcher in the grid systems group of the US Department of Energy’s National Renewable Energy Laboratory. Yet that is more likely to follow the incremental, organic model that historically was followed by the US electricity grids, he says, rather than any Chinese long march.

“I definitely see that path forward happening,” says Novacheck, “instead of any large centralised plan of: ‘Let’s globalise this.’”