Technological innovation and electrification

schools contributing 12.2% and commercial building complexes 6.5%. In China, projects for cooling, heating and power in buildings and district cooling, heating and power each make up approximately half of the DNG projects. Because parks of various kinds and commercial complexes have a stable demand for electricity, cooling and steam, power is mainly provided by gas turbines or by combined-cycle gas turbines. Hospitals, schools, hotels and office buildings have a smaller and less stable demand, so power is mainly supplied by gas turbines and gas microturbines.

Distributed PV capacity is increasing at a faster pace than utility-scale PV (IEA, 2018b). In 2016 newly installed capacity increased by 200% year-on-year. Distributed PV power generation enjoyed very strong growth in the Central and Eastern regions. Provinces that topped the list were Zhejiang, Shandong, Jiangsu, Anhui and Jiangxi. Distributed PV is expected to grow more quickly in the coming years because:

Newly released policies allow distributed generation owners to use some energy for their own consumption and sell excess generation to on-site consumers. Commercial and industrial projects become economically attractive at high levels of self-consumption, as the retail price is high.

The administrative hurdles preventing generators from selling power to multiple consumers connected to the same substation were lifted, hence increasing the client base for distributed generators, enabling them to diversify revenues and reduce risk.

Distributed wind power was encouraged in China’s 13th Five-Year Plan. Some inland regions have begun to utilise local resources to plan for wind power development, bringing new opportunities for small and medium-sized wind power investment enterprises.

Multi-energy projects, microgrids and “Internet+” smart energy

Recent years have seen the development of China’s industrial parks, the popularisation of microgrids and new energy power generation, and the constant upgrading of investment models. While initial efforts focused on technology, finding suitable economic arrangements and business models have more recently been receiving equal attention. In 2016 the NEA started the construction of integrated projects that combine multiple complementary energy sources, as one of the key measures of establishing “Internet+” smart energy systems. In late 2016, the NEA announced the first batch of 23 demonstration projects using “multi-energy” complementary energy sources and integrated optimisation.

Most of the demonstration projects are integrated energy supply systems for end users. Their designs and planning processes are now completed. However, because of programme complexity and other reasons, some are not yet in operation. Notably, demonstration programmes, such as large-scale comprehensive energy stations in cities, had appeared before the concept of integrating different energy sources was even put forward. These projects are also good examples of distributed gas turbine and energy cascade utilisation.

The integration of different energy sources can provide a flexible solution for meeting the energy needs of commercial and industrial complexes. While flexibility within an industrial complex is profitable for enterprises, this flexibility also improves the security and stability of China’s energy supply for the wider grid. With the prospect of extensive new energy consumption, this flexibility can decrease the peak load requirement and support the frequency regulation of power grids.

Box 3. Multi-energy complementary project in Gui’an

A project combining complementary energy resources, located in Gui’an city, Guizhou province, provides heating, hot water, cooling and electricity services to a total building area of about 500 000 square metres (m2). The project uses a combination of natural gas with three other energy resources: a water-based heat pump, solar thermal and compressed air energy storage. The project design gives priority to the supply of heating services, and the system usually operates off-grid, but can rely on the grid when needed. The power generation capacity is 2.8 megawatts (MW), cooling capacity is 15 165 kilowatts (kW), and heating capacity is 13 304 kW. Compared with a conventional central air-conditioning system and boiler heating system, the installed capacity for cooling is reduced overall by about 45-55%, and the installed power capacity reduced by about 30 MW. Compared with split system air conditioners, the installed capacity can be reduced by about 70 MW. In the near future, Gui’an city plans to set up ten similar distributed energy stations and a smart energy management centre to meet the energy needs of a 43 square kilometre science park.

Source: People.cn (2017), “1+3” [The First Combining Complementary Energy Resource Finished in Gui’an City].

Box 4. Microgrid project in Suzhou

The microgrid project, developed by GCL in Suzhou city, Jiangsu province, is a national renewables-based microgrid demonstration project in China. The microgrid aims to integrate six energy systems based on solar PV, gas-fuelled co-generation, wind energy, low-grade heat supplied by ground source heat pumps, and solar thermal, light-emitting diodes (LEDs), and energy storage. The area of construction of the first phase was 19 515 m2.

The energy load of the office buildings from electricity, air conditioning and hot water is estimated to total 1 000 kW, about half that of traditional centralised energy systems. The rooftop solar PV can provide 350 kW of installed electricity capacity, and natural gas 400 kW for electricity and 400 kW for heating and cooling services. The project is also integrated with multiple technologies, including a 100 kW energy storage system, a wind and solar combined system, EVs, microgrid and LEDs. The buildings can achieve more than 50% energy selfsufficiency with more than 30% energy savings. Primary energy is converted in a cost-effective and efficient way to meet end-use needs from lighting, motors, appliances, air conditioners, heating, hot water and steam. This leads to savings in energy investment of 30%, a reduction in energy consumption of 40%, improvement in energy efficiency of 40% and reductions in emissions of more than 50%.

The core benefit of GCL’s offering comes from integrating a variety of energy sources with various characteristics to construct a microgrid system. This allows an optimal use of these various energy sources by meeting end-use needs with electricity, cooling, heating, steam and other energy products. This helps improve overall energy efficiency, reduces the total cost of energy consumption, achieves emissions reduction and protects the environment.

Box 5. “Internet+” project in Guangdong

In 2017 CSG built its first smart energy demonstration project in Guangzhou. The project aims to integrate four networks: electricity, Internet, television and telephone. The project district covers a total of 21 buildings with around 1 450 households. The composite low-voltage fibre combines optical and power cables. Integrating four operators’ networks makes the interaction of power flows and information flows feasible, supporting energy data transmission and intelligent home management. Digitalisation of meters for electricity, water and gas is central to the project. With the support of a centralised collection system and the fibre cable, meter reading in a building can be completed remotely in ten seconds. This significantly improves the accuracy and efficiency of metering. At the same time, the system can conduct remote fault diagnosis and control in real time in order to control system losses and ensure intelligent management of electricity, water and gas meters.

The data recording system can provide detailed time series data for household appliances, including lighting, refrigerators, televisions and air conditioners. This will facilitate big-data analysis of consumer demand. Based on four networks and three meters, integrating with distributed energy, charging facilities, intelligent homes and intelligent communities – as well as constructing big data on electricity, water and gas consumption – it is possible to have a better understanding of consumer behaviour and spending. Furthermore, this project can be extended to other smart home applications and also manufacturing applications. It is likely that energy consumption of manufacturing equipment can also be optimised in response to energy structure and production requirements.

Digitalisation

A principal advantage of digitally enabled connectivity-based business models is the ability to collect and analyse large amounts of data and to optimise the use of a vast number of assets accordingly. China is already seeing practical applications of this model.

Box 6. Envision’s platform for the Internet of things

Envision Energy is a large Chinese wind turbine manufacturer that in September 2016 launched a data platform based on the Internet of things called EnOS. It connects and manages various devices related to energy generation, consumption, storage, transmission and distribution through cloud computing and big-data analytics. The objective is to make energy devices operate collaboratively at the level of each household, each community and even each city. Such optimisation can reduce power generation investment, monitor and manage load, and achieve supply-demand balance in response to market dynamics.

The main benefit of this platform is its close integration and optimisation among different components of the entire energy system. It thus allows for the concrete application of the principles of smart distributed energy sources. The platform has already been commercially implemented by utilities and other energy companies.

Source: Envision (2017), “EnOS platform for internet of things”, www.envision-energy.com/energy-os/.