Smart Grid (success)
Smart Grid is a game-changer in the energy landscape because it upgrades the electrical grid to waste less energy and allows for more innovative energy to be delivered. JUCCCE’s first major accomplishment was to accelerate the adoption of Smart Grid in China. By convening key players in China along with top international experts to discuss Smart Grid benefits and win-wins from collaboration, JUCCCE played a crucial part in China’s main utility's decision to deploy Smart Grid widely and aggressively. This cooperative catalyzed the creation of a roadmap announced by the State Grid in May 2009 to deploy Smart Grid by 2020. USD 7.3 billion have been dedicated to this effort. Today, there are 15 Smart Grid city pilots across China.
By overlaying Internet-type communication capabiities on top of a legacy electrical grid that hasn't changed for nearly a century, Smart Grid provides old and new types of energy when and where it is needed. It encompasses power generation, transmission, distribution, and end-use. It reaches power utilities, wind and solar farms, industrial factories, apartments, government buildings, municipalities, and electric vehicle charging stations.
WHY DOES IT BENEFIT THE US TO WORK WITH CHINA ON CHINESE SMART GRID DEVELOPMENT? Smart Grid benefits include reduced energy use through demand-side management, reduced need for expensive buildup of power generation (which is generally coal-based in China), reduced emissions, quicker response to faults (e.g. blackouts), reduced labor costs (e.g. sending out trucks to figure out what line went down in a storm), the ability to take fluctuating energy supply (e.g wind and solar) onto a grid that is used to stabilize supply (e.g. gas and coal), the ability to connect previously disparate energy systems to optimize overall energy use, and the ability to optimize hardware investments through accurate asset monitoring.
Without Smart Grid, the renewable energy supply industry will not be able to grow at scale.
Smart Grid communications allow all stakeholders in the energy supply chain to help control energy use, not just the power utility.
- China implements everything at a much larger scale, and much faster, than the US or Europe. New technologies can be commercialized faster through China pilots.
- If China decides to adopt new Smart Grid technologies, they will spend tens of billions of dollars on purchase orders. This economy of scale will bring down production costs, and therefore purchase costs and investment risk to utilities around the world. For context, China spent $37 billion on new power grid construction alone in 2007.
- China will set the de facto standards if it implements Smart Grid on a Chinese scale at a Chinese pace. It behooves the US and Europe to work closely with China’s State Grid engineers to jointly define these standards, so that their utilities can benefit from the same low cost hardware.
HISTORY OF JUCCCE CHINA SMART GRID COOPERATIVE
JUCCCE was founded, in April 2007, out of private and public dialogues produced by Chairperson Peggy Liu at the MIT Forum on the Future of Energy in China; Steve Papermaster was one of the two US government representatives attending. This event was the first public dialogue between US and China government officials on energy (meetings were held privately in closed-door sessions before that time).
Government officials agreed that the US and China should do more programmatic collaboration and focus on 5 areas: smart grid, buildings, transportation, renewables and cleaner coal.
- Meetings were held in July 2007 with State Electricity Regulatory Commission (SERC), the Investment Association Committee of the National Development and Reform Commission (NDRC IAC), Energy Research Institute of the National Development and Reform Commission (NDRC ERI), and Chinese Electricity and Power Research Institute (CEPRI) of the China State Grid. Foreign experts such as Steve Papermaster and Dian Gruenich (commissioner of California Public Utilities Commission) were brought to China.
- Meetings were set up through the foreign relations department of each group. Although the meetings were welcomed because of the high level foreign guests, initial reactions to the Smart Grid concept largely consisted of, “what is Smart Grid?” and “do you mean electric vehicles, because if so, that is 10 years out and we are not interested”, and “we are more interested in high voltage transmission than distribution”.
- In December 2007, JUCCCE wrote a paper briefing Chinese entities on Smart Grid. Contributors to this paper consisted of McKinsey, Foundation Capital, US PCAST, Silver Spring Networks. This paper was intended to highlight benefits of Smart Grid to the Chinese, within a Chinese context.
- In summer of 2008, Duke Energy contacted JUCCCE due to our previous commitments at CGI and a “China’s Silver Lining” article by James Fallow in the Atlantic Monthly that mentioned JUCCCE. We explored ways in which Duke Energy could work with JUCCCE to lower carbon emissions in China, and benefit the US at the same time. As a result, Duke Energy's chairman Jim Rogers and JUCCCE Chairperson Peggy Liu announced a joint commitment to form the JUCCCE China Smart Grid Cooperative at the 2008 Clinton Global Initiative in New York City. Duke Energy is now the largest utility in the United States. The team at Duke Energy included Hilary Davidson, key liason to CGI, Neeta Patel (now at Pratt and Whitney), and David Mohler (CTO).
Picture: Presenting Smart Grid commitment at Clinton Global Initiative with Jim Rogers of Duke Energy
Our end goal was to create a tipping point of interest in Smart Grid at the China State Grid Corp. Our strategy was to convene key experts from across the Smart Grid value chain in a series of meetings, ultimately to create excitement among key Chinese decision makers about Smart Grid.
Companies/entities that participated as members of the Cooperative, donated in-kind support, or attended our workshops included JUCCCE, Duke Energy, Gridpoint, Cisco, Current Group, BPL Global, McKinsey, Augmentum, LSIS (Korea), IBM, GE, Optimal Technologies, US PCAST, CPUC, Lawrence Berkeley National Lab, Ecological Investments, Kema, BC Hydro, China Greentech Initiative, US Department of Energy, and others.
In October 2008, ML Chan, a 30-year veteran of the power industry (see his bio on the JUCCCE website), met Peggy Liu when she spoke at Gridweek in Washington DC. He soon became the Executive Director of the JUCCCE China Smart Grid Cooperative. His time was sponsored by his employer, Quanta Technologies, where he is a VP of Asia Development and consultant to some of the top utilities in the world on Smart Grid strategy.
In November 2008, JUCCCE held the JUCCCE China Energy Forum in Beijing and highlighted Smart Grid in a panel talk.
- JUCCCE was involved in talks with Shanghai Power and the regional State Grid to conduct a workshop in Shanghai in May 2009, but outbreaks of H1N1 flu prevented this event from happening.
- On May 21, 2009, the China State Grid released a roadmap that stated an intent to implement “Strong Smart Grid” in three stages by 2020. A report documenting the history leading up to this roadmap mentions JUCCCE and Duke Energy as influential parties. As a result, more than $7.2 billion is estimated to be committed to Smart Grid development in China.
- In July 2009, JUCCCE held a 100-person workshop in Yangzhou sponsored by the Mayor’s office and Economic Development Zone.
- On April 28, 2010, Yangzhou held an opening ceremony for a Smart Grid Exhibition Center which was created as a result of the JUCCCE workshop. 12,000 hectares of land were reserved to create a Smart Grid working demo on this site. Free exhibition space was also designated for JUCCCE members. 15 national Smart Grid pilot cities have been designated, including Yangzhou. This exhibition center is now a regular 'delegation site-visit' destination for China Smart Grid.
JUCCCE has no active programming at this point. JUCCCE’s main goal of catalyzing a tipping point that would be sustained by industry partners has been fulfilled.
- Peggy Liu, co-founder and Chairperson, JUCCCE
- Steve Papermaster, co-founder, JUCCCE
- ML Chan, Executive Director, JUCCCE China Smart Grid Cooperative
- Yiwei Chen, Program Manager, JUCCCE China Smart Grid Cooperative
- David Mohler, CTO, Duke Energy
- Jim Rogers, Chairman and CEO, Duke Energy
- Hilary Davidson, Duke Energy
- Hu Xuehao, Senior Advisor, CEPRI of State Grid
- Leonard Liu, CEO, Augmentum
- Leslie Katz
- Zhu Qun
- Lawrence Berkeley National Lab
- City of Yangzhou