According to a Chinese government source, China intends to install over 300 million smart meters in 2015, a massive increase of 730% from the 36 million smart meters installed in 2011.  China’s utility giant, the State Grid Corporation of China (SGCC), will invest $47 billion in power grid construction over the next five years.  About $100 million of this amount will be used to advance the smart grid technology.

The news media only supplies numbers, so it’s hard to know what the Chinese players are actually doing now.  I feel that the real story behind China’s smart grid program would be even more impressive than the published figures.

Chinese players are engaging across all aspects of the smart grid space: power generation, transmission, substation, distribution and consumption, by adopting advanced information-gathering and intelligent information-processing technologies.  While there are many different views in China’s development in smart grid, my focus is on the utilization of information technology, automation, and intelligent interactivity in components of the power grid infrastructure from utilities to consumers.

The overall goal of the Chinese smart grid effort is to enhance the capabilities and levels of existing elements, including:

• Power transmission equipment utilization
• Network security and reliability
• The quality of electricity service
• Power grid efficiency

More specifically, on the transmission side, the major goal is to implement sensors to achieve real-time monitoring of transmission lines.  At the substation level, Chinese parties believe that smart grid technology can automatically adjust power levels and achieve rapid fault resolution in intelligent substations, through intelligent switches and transformers.

On the distribution side, Chinese players expect that real-time monitoring, intelligent power distribution, and other networking applications can achieve more rapid failure restoration, a more reliable electricity supply, and visualized operations management tools.  Eventually, these elements could offer advanced functionality in information collection and analysis, intelligent electricity load shifting, and remote meter reading applications to link two-way smart meters.

Recently, a bunch of Chinese players, including RXPE Sieyuan NARI, XJ Electric, Clou Electronics, Holley, and Ningbo Sanxing, have shifted their business focus to pursue huge market potential in the domestic smart grid markets.  At the same time, it’s clear that China could be more aggressive on the global stage.  Huawei announced that it will launch in the U.K. smart meter market after signing a joint venture deal with technology provider Landis + Gyr.  SGCC, meanwhile, has signed smart grid deals in the Philippines, Brazil, and Portugal.    China has also stepped up efforts to become part of the global community in seeking smart grid standards.  For example, China recently insisted on establishing a new committee under the International Electrotechnical Commission (IEC), with the U.S. and European representatives approving this request.  China is signaling its intent to get off the sidelines and instead become directly engaged on the standards front.  That’s an appropriate move, as China becomes a center of global smart grid innovation.