Standalone Power Networks Disrupt Traditional Grid Models (AI Translation)
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文｜财新周刊 范若虹
By Fan Ruohong, Caixin Weekly
孤网是指不与大电网相连，完全自给自足的供电模式。电力作为二次能源具有实时平衡、较难存储的特性，因此单一电源会被认为不安全，需要大电网作为“蓄水池”托底。
An isolated grid refers to a self-sufficient power supply model that is not connected to the main grid. As electricity, being a secondary energy source, requires real-time balancing and is difficult to store, relying on a single power source is considered unsafe. Hence, a large grid is needed as a "reservoir" backup.
孤网供电模式并不新奇。此前，中国一些高耗能企业如山东魏桥铝业就拥有自备电厂，即是类似的孤网供电模式。不过，传统孤网运行大多用煤电支撑，可以连续运行、供电稳定，但风光供电孤网模式的巨幅波动，在目前储能技术条件下还极难熨平，安全性、稳定性都存在巨大挑战。
The isolated grid power supply model is not a novel concept. Previously, some high energy-consuming enterprises in China, such as Shandong Weiqiao Aluminum, already had self-supplied power plants, which operate under a similar isolated grid model. However, traditional isolated grid operations are mostly supported by coal power, providing continuous operation and stable power supply. In contrast, the significant fluctuations of wind and solar power isolated grids are extremely difficult to smooth out given the current state of energy storage technology, posing substantial challenges to safety and stability.
孤网的好处显而易见。一方面，全球对“碳达峰、碳中和”（下称“双碳”）的能源转型追求仍在前行，欧盟等经济体对绿电的需求持续增长；另一方面，孤网分布式供电的模式，有助于解决中国西北部大规模上马的新能源消纳率低的现状。
The benefits of an isolated grid are apparent. On one hand, the global pursuit of energy transition goals, namely "carbon peak and carbon neutrality" (hereinafter referred to as "dual carbon"), continues to advance, with economies like the European Union experiencing a continuous rise in demand for green electricity. On the other hand, the isolated grid model of distributed power supply helps address the low integration rates of newly established large-scale renewable energy projects in Northwest China.
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- Isolated grids offer self-sufficient energy models bypassing the main grid, proving beneficial amid rising green electricity demand, achieving cost efficiency, and supporting localized power in energy-intensive industries.
- By 2024, China's wind and solar capacity will exceed 1.41 billion kW, doubling since 2021, but challenges remain in fully integrating new energy sources due to grid capacity and cost issues.
- Green electricity networks, despite providing cost advantages and supporting industrial shifts, still face systemic barriers like grid reliance for stability and unresolved subsidy distribution issues.
An isolated grid refers to a self-sufficient power supply model operating independently from the primary grid, challenging due to electricity's real-time balancing requirement and storage difficulties, making reliance on a single source risky. Traditionally, high energy-consuming enterprises, like Shandong Weiqiao Aluminum in China, utilized self-supplied power plants under this model, predominantly supported by coal, ensuring continuous and stable power. In contrast, isolated grids powered by wind and solar pose significant challenges due to existing energy storage technology limitations, impacting safety and stability. [para. 1][para. 2]
Isolated grids offer notable benefits in supporting the "dual carbon" goals, with increased demand for green electricity, such as in the European Union. In China, specifically in Northwest regions, this model helps mitigate low integration rates of large-scale renewable projects. By 2024, China's installed wind and solar capacity is projected to hit 520 million and 890 million kilowatts, respectively, reflecting significant growth. Eliminating grid transit fees and cross-subsidies, these networks drastically cut electricity costs for energy-intensive businesses, promoting isolated grid ventures. For instance, the Yuanjing Chifeng Project's power generation costs were markedly lower than Chifeng City's grid's industrial rates, sparking interest among companies in isolated grid experimentation. A green electricity micro-grid could revolutionize industrial practices and industry layouts, expanding to diverse industrial manufacturing areas. [para. 3][para. 4][para. 5][para. 6]
However, challenges persist, with provinces like Qinghai facing power mismatches—oversupply during the day and shortages at night, necessitating substantial imports, affecting cost advantages. Similar issues occur in Inner Mongolia, Gansu, and Sichuan, as massive wind and solar base projects launch, quickly surpassing installation goals, but overwhelming the grid's capacity. Coal power’s dominance is declining as wind and solar rise, causing regulatory challenges. Green electricity surpluses contrast the rising demand for such energy, complicating cost reductions due to high voltage investments and losses in long-distance transmission. Europe sees the green grid as key to carbon reduction; in China, abundant "abandoned" green power offers potential, easing the load on major grids and prompting exploration into isolated networks, aiding grid connection frustrations in regions like Xinjiang and Qinghai. [para. 7][para. 8][para. 9][para. 10]
Isolated grids offer self-sufficient power models for enterprises, minimizing reliance on the main grid. Despite appearing mutually beneficial, existing grid systems face disruptions. The State Grid Corporation of China and China Southern Power Grid, key power suppliers, rely on interconnected models and significant investments in ultra-high voltage lines—since 2002, reforms have infused competing models and economic dynamism, yet physical grid-user connections persist. Pricing models have induced cross-subsidies, complicating isolated network establishment. Isolated power models mirror enterprise-owned plants, reducing main grid dependence, especially among large users, impacting revenue. Amid challenges, regions explore integrating "Source-Grid-Load-Storage," aiming to bolster green power investments. [para. 11][para. 12][para. 13][para. 14]
Chifeng Project exemplifies a dynamic coupling of renewable energy with chemical production, defying conventional continuous-production chemical industry norms. Aligning production with variable renewable outputs enables fully green products and cost cuts. If wind and solar power costs drop to 0.15 yuan per kWh, it could stimulate green hydrogen and ammonia production expansions. Inner Mongolia exemplifies potential with favorable wind and solar costs, supporting large-scale green hydrogen development. Projects like Yuanjing Chifeng depend heavily on green electricity, requiring main grid support, which incurs systemic fairness issues due to cross-subsidy shifts. Resolving these could advance isolated grid deployments, aligning with new power systems. [para. 15][para. 16][para. 17][para. 18][para. 19]
- Shandong Weiqiao Aluminum
山东魏桥铝业 - Shandong Weiqiao Aluminum operates a self-sufficient power supply model with its self-owned power plants, akin to the "island grid" system. Traditionally supported by coal power, these plants ensure continuous and stable electricity supply. The "island grid" model at Shandong Weiqiao Aluminum exemplifies how high-energy-consuming enterprises can benefit from such self-reliant power systems, bypassing the main grid and reducing electricity costs.
- Envision Group
远景 - The article mentions Envision Group in the context of its Chifeng project, which has achieved a wind and solar power generation cost of less than 0.2 yuan/kWh. This is significantly lower than the average industrial electricity price in Chifeng City. Envision is exploring green hydrogen and ammonia manufacturing to create new applications for wind power and cultivate new customers for its wind turbines.
- State Grid Corporation of China
国家电网 - The State Grid Corporation of China (State Grid) is one of the two major grid companies in China, covering 26 provinces, serving over 11 billion people, and accounting for 88% of the country's land area. It operates an interconnected power system that requires significant investment, with an annual investment exceeding 600 billion yuan. As of 2024, it has built 38 ultra-high-voltage lines, ensuring electricity supply across a vast region.
- China Southern Power Grid
南方电网 - China Southern Power Grid covers Guangdong, Guangxi, Yunnan, Guizhou, and Hainan provinces, as well as being connected to Hong Kong, Macau, and Southeast Asian grids. It serves an area of 100,000 square kilometers and a population of 2.72 billion. As of 2024, its fixed asset investment reached 173 billion yuan, with total assets exceeding 1.23 trillion yuan. The company has constructed 19 ultra-high voltage transmission channels.
- 2021：
- Coal-fired power accounted for over 60% of installed capacity and over 70% of electricity generation. Wind and solar power installed capacity surpassed thermal power.
- End of 2023：
- Provinces began exploring application paths for vast amounts of new energy that couldn't be consumed locally through integrated projects combining generation, grid, load, and storage.
- Since the end of 2023：
- Several provinces including Inner Mongolia, Xinjiang, Qinghai, Jiangxi, Guangxi, Jilin, Henan, and Jiangsu introduced 'Source-Grid-Load-Storage Integration' pilot schemes.
- By July 2024：
- China surpassed its goal of 1.2 billion GW of wind and solar installed capacity, reaching this milestone six and a half years ahead of the 2030 target.
- By 2024：
- China's total installed capacity for wind and solar power generation will reach 520 million kilowatts and 890 million kilowatts, respectively.
- As of the end of the third quarter of 2024：
- The total assets of the State Grid Corporation stood at 5.54 trillion yuan.
- November 2024：
- A document released by the Inner Mongolia Autonomous Region Energy Bureau states the cost per kilowatt-hour for wind energy is approximately 0.15 to 0.2 yuan, with solar energy costing about 0.2 to 0.25 yuan.
- End of 2024：
- The total installed capacity of wind and solar power nationwide reached 1.41 billion kW.
- Within the next five to ten years：
- Officials from the Energy Research Institute of the National Development and Reform Commission believe the green electricity micro-grid model may truly take off.
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