SERC – China needs distribution investment to ease power shortages

China’s power grid operators need to investment more in distribution networks to improve supply as part of measures to address power shortage, according to the State Electricity Regulatory Commission (SERC).

Power generators have curtailed power generation when cornered into losses by rising coal prices as they are not able to pass rising costs on to grid operators, who sell to end-users at government-determined prices.

Investments by the dominant State Grid Corp of China (SGCC) on <220kV networks lagged behind investment in >220kV networks from 2006-10 and the gap would widen further in the run-up to 2015, said the power regulator in an annual report.

SGCC favours a plan to build an ultra-high voltage power transmission network – 800kV for DC power flows and 1000kV for AC – that would considerably boost its long-distance transmission capacity and consolidate its control over regional grids. For the first five years to 2015, the plan would require investment of CNY500bn (US$78.4bn).