China’s largest utility, State Grid, is leading an initiative to build an interconnected global network of power lines. This network is supposed to transport (renewable) electricity across and between continents in order to balance power demand and supply on a global scale. While this is formally an international effort, in practice, it may serve Chinese interests first and foremost.

Our observations

• China’s largest electric utility, State Grid, is advocating the creation of a Global Energy Interconnection (GEI). This is supposed to become a global network of power lines to connect current and future (renewable) power generation assets, such as hydropower stations and wind parks with regions that have less renewable power of their own. While the idea is a personal priority for President Xi Jinping, it is not just a Chinese dream; it is also supported by the International Electrotechnical Commission and one of the board members of the GEI development organization is former U.S. Secretary of Energy Steven Chu.
• The GEI would consist of ultra-high-voltage direct current (UHVDC) transmission lines. These transport power at voltages of 800kV or more and, because of that, offer lower energy losses (a factor 2-3 lower than conventional Direct Current lines) and save costs and space as fewer parallel lines (and towers) are needed. Together, these factors ensure that distances of several thousand kilometers can be covered, while (supposedly) only adding ~4 cents per kWh (i.e. ~20% of the consumer price) for a connection between Western Europe and hydropower stations in China or solar parks in Africa.
• While the rest of the world still relies on lower voltage transmission lines, China has already built more than 10 UHVDC lines and by 2030, it should have 23. Most of these connect remote hydropower stations with the nation’s coastal cities (e.g. from the Xianjiaba dam to Shanghai). The most powerful of these, a 3,400 kilometer 1,100kV line from Xinjiang to Anhui is still under construction. These and other lines have the capacity to provide more than ten million citizens with power.
• Chinese utilities are investing not only in China itself, but are increasingly turning to foreign projects, both in power generation and transmission. In the past five years, they have invested a combined $102 billion in 83 infrastructure projects in Latin America, Africa, Europe and elsewhere.
• The EU also recognizes the need to build an integrated electric grid to integrate the energy market, secure energy supply (e.g. in case of natural disasters) and optimize the use of renewables. In 2014, the EU called upon member states to make sure that at least 10% of their power generation capacity could be transported to neighboring countries. All but a few (e.g. Spain and Poland) are on course to meet this target by 2020 and new high (but not ultra-high) voltage lines are planned (e.g. the Biscay Bay line between Spain and France).
• Ideas about a European supergrid have been around for years. Some of these plans were geared towards harvesting power from (planned) solar and wind farms in North-Africa. Ideally, such projects (e.g. Desertec and Medgrid) would bring economic development to countries like Morocco and Tunisia and satisfy Europe’s hunger for clean energy.

Connecting the dots

The vision of the GEI is intriguing, as it would (finally) add a truly global dimension to electricity. It used to be difficult and costly to transport electricity and, because of that, generation and use were never far apart. Today, this is already changing on a regional level and a global supergrid would turn electricity into a truly global commodity, which coal, gas and oil already are. In fact, with the global effort to reduce our dependence on fossil fuels, electricity is bound to play a greater role in the global energy system and a globalization of the electricity market would be a somewhat logical next step.However, there is disagreement over the actual need for such a global supergrid. Regional interconnections, on the European level for instance, could suffice to share most of the renewable energy generated. Also, as we have noted recently, much is happening in the area of energy storage (e.g. in batteries, pumped hydropower and compressed air) and this would also reduce the need for global interconnections. From a more ideological point of view, many experts and activists have pleaded for a radical decentralization of the energy system and thus for local and small-scale forms of energy production and local smart-grids to balance (and store if needed) supply and demand. Similar to the Internet, a global supergrid could be explained as a form of decentralization in itself (i.e. connecting everyone to everyone), but in practice, it would instead imply an increasing dominance of mega-sized (hydro-)power stations and energy farms. One of the consequences of such a centralization of the electric grid could be that countries become dependent on it. That is, when cheap and clean power can be imported easily, it will be difficult for (smaller) nations to maintain domestic power generation capacity and remain electricity-independent. For China (and State Grid), the GEI at first glance seems to provide a means to export its UHVDC technology and to win multi-billion-dollar construction contracts around the world. However, there’s also a clear geopolitical angle to this story. Similar to its other infrastructure-oriented mega-scheme, China’s Belt and Road Initiative, the electricity network is also a vector of power across the globe. This comes in the form of soft power, for instance, by bringing power to underserved African cities, but the impact may also be more direct and forceful. Some nations could become dependent on China for their electricity supply, others will come to rely on (domestic) transmission networks that are (partly) owned by Chinese companies and China will have some degree of power over those as well. Most striking, in this respect, are the so-called renewable-energy hubs that are also part of the GEI vision. The Chinese plan to be build these in remote regions in the far north and south (i.e. wind farms) and around the equator (i.e. solar). If that happens, one can easily imagine how theses would lead to either Chinese-owned sites on other nations’ territory or to new territorial disputes akin to the South China Sea today.

Implications

• It remains to be seen whether and when a truly global network will emerge. In the meantime, UHVDC will most likely be built on a regional level, wherever there’s an acute need to transport electricity over long distances. This might lead to, for instance, a corridor between North Africa and Europe.
• Two of the most prominent suppliers (including State Grid’s projects) of UHVDC equipment are ABB and Siemens. Remarkably, these are two European companies, even though we’re quite used to seeing either American or Chinese companies leading in tech.
• Chinese high-power lines are not just used for renewables. Even more so, there is a chance that UHVDC lines will revamp coal-fired power plants. Since these plants perform optimally when used at constant levels, they usually provide a nation’s baseload (the level of power consumed 24/7) and other (more flexible) sources are used to provide for daily peaks in demand. Long-distance transmission could help these plants find a greater market for 24 hours a day.