State Grid is the largest utility in the world, with over a million staff, some 1.1bn customers, and revenue that is in the region of a billion dollars for every day of the year. Of course, China’s state regulation helped put it there, but the scale of its projects are nearly unrivalled. To this end, its new smart grid upgrade program is going to have far-reaching impact on the global stage, and this is an immense opportunity for any IoT-minded company that can get a slice of the pie.
As reported in the South China Morning Post (owned by Alibaba, based in Hong Kong), the first phase of this project will conclude in 2021, with the second due to wrap up in 2024. Of course, this wouldn’t be an announcement without mention of 5G and AI, and given that it supplies about 90% of the country’s electricity, and made nearly $10bn profit last year, there’s plenty of cash to be splashed on these upgrades.
The ‘Ubiquitous Power Internet of Things’ project, to use its somewhat terrible full name, has been outlined in a white paper, and will “unite all parties to establish an energy ecosystem featuring inclusive development, shared governance and mutual benefit, jointly promoting the Internet of Things in Electricity (IoTE).”
Smart cities are cited as one of the main motivators for the project, but this is a national infrastructure project on a scale that dwarfs most western initiatives. In this new venture, the smart grids are going to inextricable from the smart cities they power, and so there is going to be a lot of two-way traffic between these systems.
The SCMP cites a prediction from Northeast Group that says China is expected to spend $77.6bn on smart grid infrastructure over the next ten years. State Grid and the government have not put a figure on it, and given the overlap between many of the state-owned assets and organizations, calculating that number could provide a very different equivalent in a western market – much, much higher.
Unsurprisingly, State Grid makes a lot of noise about the social benefits of its upgrades, providing safer, more reliable, and more customer-friendly networks. Of course, as a state-owned monopoly in a regulated socialist market economy had better be making its customers happy, otherwise managers get jailed – and sometimes executed. In 2014, the GM of State Grid’s Shanghai wing was sentenced to life in prison after a corruption investigation.
State Grid says that between January and August this year, some 394 TW of ‘clean energy’ has been consumed by its customers, which is up 15.9% year on year. China still has vast amounts of fossil fuel capacity, but it is also one of the fastest and most enthusiastic adopters of renewables.
In terms of the smart grid networks, China has been quite insular. LTE Cat-NB has proven popular, mostly because of Huawei’s involvement with the standard and government subsidies that help keep the prices of the hardware down. LoRa has made inroads in China too, and while an open standard like Wi-SUN could be of great use, if the state is helping bring the cost of an L-LPWAN deployment artificially low, and you exist in a market that is fine with a proprietary or single-stack approach, the arguments in favor of an open standard like Wi-SUN are somewhat diminished.
On the consumer end of things, the market is also quite different to most. NFC-enabled meters that are used for pre-payments are popular in the region, and turn the smart meter dynamic on its head. Instead of having to connect the meter, the utility can rely on its customer’s smartphone to backhaul its usage data. In time, expanding that dynamic to the customer’s smart home seems an easy enough evolution, and one that might be impossible to implement outside of China.
However, China remains very closed-off from the rest of the world, in terms of international companies doing business there. From a regulatory perspective, there’s quite a burden to doing business in the country, and from our own research perspective, getting data out of the country is difficult. Even trying to find a copy of this white paper has proven futile, as it is not listed on the State Grid website, there is no phone number to call, and the email address provided doesn’t work.