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Electricity firms get smart grid windfall

By Liu Yiyu (China Daily)
Updated: 2011-05-23 07:42

BEIJING - Electricity companies in Northeast Asia are likely to reap rewards now that China's power distributor has decided to accelerate the construction of power transmission lines and substations as part of its effort to pave the way for a smart grid.

The State Grid Corp of China will add 337,000 kilometers of power transmission lines with a voltage of more than 110 kilovolts between 2011 and 2015, said Shu Yinbiao, the company's deputy general manager.

The firm also plans to accelerate long-distance electricity transmission capable of linking to new sources of energy. Shu said the work will double new energy efficiency by 2020.

The power distributor is planning to invest $44 billion in ultra-high voltage transmission technology by 2012, making China the world's largest market for advanced transmission lines.

In light of the trend, LS Industrial Systems, a leading electric equipment company from the Republic of Korea (ROK), is expanding its products range from low-voltage to high and ultra-high voltage applications that better suit local needs, according to its China director Oh Soo-heon.

LS is planning to locate an integrated operations center, production base and research and development facilities in China and will focus on renewable energy and smart grid technology, according to the company.

LS said it is hoping to generate $1.17 billion in revenue from China by 2015.

The relationship between China's State Grid and the ROK's LS is being seen by experts as a good example of the opportunities China is creating in the smart grid industry and an example of the way it is interacting with its neighbors.

"The ROK and Japan are very advanced in the electrical field in such areas as metering and they could give China support in upgrading its technology," said Bernhard Hartmann, managing director of the Greater China branch of the management consulting firm A.T. Kearney. "China is clearly pushing for a smart grid system and encouraging the study of concepts and smart solutions on the generation side and has a strong manufacturing capacity."

In return, the ROK and Japan could get access to the Chinese market, which has massive potential.