1. Accelerate the Construction of the UHV Power Grid and Promote the Sustainable Development of Chinese Power Industry Liu Zhenya State Grid Corporation of China October 24 th 2005 VLPGO 2005

2. Basic Situation of China’s Power Grid

3. The development of installed capacity in China 440GW By the end of 2004, the total installed capacity had exceeded 440GW with annual power generation of 2190TWh. Starting from 1996, both installed capacity and annual power generation in China have ranked No. 2 in the world. By the end of 2004, the total installed capacity had exceeded 440GW with annual power generation of 2190TWh. Starting from 1996, both installed capacity and annual power generation in China have ranked No. 2 in the world. GW

4. State Grid Others North east North China North west East China Central China South South TaiWan China now has 897,000 km of power transmission lines with voltage of 35kV and above, total power transformation capacity of 1.57 billion kVA. China now has 897,000 km of power transmission lines with voltage of 35kV and above, total power transformation capacity of 1.57 billion kVA. A primary nation wide interconnection has been formed in China covering six large regional power grid.

5. In 2004, inter-regional energy transmission has reached 65.3 billion kWh. It is estimated to reach 74 billion kWh in 2005. In 2004, inter-regional energy transmission has reached 65.3 billion kWh. It is estimated to reach 74 billion kWh in 2005. Northeast Northeast North China Northwest Central China ACDC TaiWan South East China

6. Since 1997, there is no major faults related to stability happened in China. The average service reliability for urban grid has reached 99.820% in 2004. Since 1997, there is no major faults related to stability happened in China. The average service reliability for urban grid has reached 99.820% in 2004.

7. The service area of State Grid Corporation of China covers 26 provinces in China, accounting for 90% of Chinese national territory. SGCC provides electricity to more than 1 billion people. In the year 2004, SGCC’s total asset exceed 1100 billion RMB; total electric power sales volume reached 1289.1 billion kWh with total sales income of 590.1 billion RMB, all of which honored SGCC ranked No. 40th among the FORTUNE GLOBAL 500 The service area of State Grid Corporation of China covers 26 provinces in China, accounting for 90% of Chinese national territory. SGCC provides electricity to more than 1 billion people. In the year 2004, SGCC’s total asset exceed 1100 billion RMB; total electric power sales volume reached 1289.1 billion kWh with total sales income of 590.1 billion RMB, all of which honored SGCC ranked No. 40th among the FORTUNE GLOBAL 500

8. Opportunities and Challenges Opportunities and Challenges

9. Challenges in Grid Construction By the end of 2004, the per capita installed capacity was only 0.34kW with per capita generation of 1670 kWh By the end of 2004, the per capita installed capacity was only 0.34kW with per capita generation of 1670 kWh 2005 2020 TWh 0 1000 2000 3000 4000 5000 6000 0 200 400 600 800 1000 1200 Power consumption Installed Capacity GW China’s GDP will reach 4000 billion US dollars in the year 2020. At that time, the total power consumption will be around 4600 TWh, and total installed capacity will reach 1,000GW. China’s GDP will reach 4000 billion US dollars in the year 2020. At that time, the total power consumption will be around 4600 TWh, and total installed capacity will reach 1,000GW.

10. Newly Installed Capacity from 1995 to 2005 Newly Installed Capacity from 1995 to 2005 GW 0 10 20 30 40 50 60 70 1995 1997 1999 2001 2003 2005

11. In the coming 15 years, Chinese annual power consumption growth will reach 170 TWh, annual newly installed power generation capacity will exceed 33 GW. In the coming 15 years, Chinese annual power consumption growth will reach 170 TWh, annual newly installed power generation capacity will exceed 33 GW. Due to long lasting under-investment of Chinese power grid, plus large scale of power generation units put into operation in recent years, the conflicts brought by a under-developed power grid becomes very distinct. All of these for the development of Chinese power grid are both precious opportunities and big challenges. Due to long lasting under-investment of Chinese power grid, plus large scale of power generation units put into operation in recent years, the conflicts brought by a under-developed power grid becomes very distinct. All of these for the development of Chinese power grid are both precious opportunities and big challenges.

12. China has constituted and prepared to implement the 11 th five- year- plan for national economic and social development from 2006 to 2010. In the coming five years, China ’ s development goal is to be inherent on scientific developing guideline, vigorously adjust our economic structure, change the economic growth pattern, improve development quality and make good efforts to make our society grow in a healthy and sustainable way. China has constituted and prepared to implement the 11 th five- year- plan for national economic and social development from 2006 to 2010. In the coming five years, China ’ s development goal is to be inherent on scientific developing guideline, vigorously adjust our economic structure, change the economic growth pattern, improve development quality and make good efforts to make our society grow in a healthy and sustainable way. 2. The sustainable economic, social and environmental development raised a new task for electric power and power grid 2. The sustainable economic, social and environmental development raised a new task for electric power and power grid

13. According to the plan, China will reduce its unit energy consumption of GDP ratio by 20 percent by 2010. According to the plan, China will reduce its unit energy consumption of GDP ratio by 20 percent by 2010. To promote sustainable development of economy and society in a coordinated way with economic, clean and stable development in power industry is the direction in the future. China must insist on an intensive development way, attach great importance and strengthen energy saving and environmental protection, contribute our best efforts to the construction of conservation society. To promote sustainable development of economy and society in a coordinated way with economic, clean and stable development in power industry is the direction in the future. China must insist on an intensive development way, attach great importance and strengthen energy saving and environmental protection, contribute our best efforts to the construction of conservation society.

14. 3. The development pattern of Chinese power grid must concentrate on improvement of resources configuration optimization ability. The coal and hydro power mainly allocated in western and northwest China, but the energy resources and power consumption are mainly located in Eastern China and Central China where economy is relatively more developed. The distance between energy base and load center are normally 500-3000 km. The coal and hydro power mainly allocated in western and northwest China, but the energy resources and power consumption are mainly located in Eastern China and Central China where economy is relatively more developed. The distance between energy base and load center are normally 500-3000 km. These basic facts determine that China have to optimize nation wide allocation of energy resources, and realize large scale and long distance inter-regional transmission of power with compensated balancing between thermal power and hydro power in order to realize the effective exploration and efficient utilization of resources. These basic facts determine that China have to optimize nation wide allocation of energy resources, and realize large scale and long distance inter-regional transmission of power with compensated balancing between thermal power and hydro power in order to realize the effective exploration and efficient utilization of resources.

15. The existing power system based on 500kv is weak in interconnection, Interregional and inter-provincial power exchange capacity is not sufficient, resulted in unsatisfying the demand of resources, but also bringing negative impacts to the safe and stable operation of power grid and reliable power supply due to issues like long-term overloading of major connection lines and short currency over limit become more and more imminent. In order to effectively secure the power supply for future economic and social development, we must start construction of a strong network based on higher voltage level. The existing power system based on 500kv is weak in interconnection, Interregional and inter-provincial power exchange capacity is not sufficient, resulted in unsatisfying the demand of resources, but also bringing negative impacts to the safe and stable operation of power grid and reliable power supply due to issues like long-term overloading of major connection lines and short currency over limit become more and more imminent. In order to effectively secure the power supply for future economic and social development, we must start construction of a strong network based on higher voltage level. 4. It is urgent to construct higher voltage power grid.

16. The Construction of UHV power grid is the tendency of the development of State Power Grid in the future.

17. Base on analysis of current situation and power supply characteristics, and according to the development trend of power industry and power grid in China, State Grid Corporation of China brings forward the development concept of accelerating the construction of UHV power grid with 1000KV AC and±800KV DC power transmission. Base on analysis of current situation and power supply characteristics, and according to the development trend of power industry and power grid in China, State Grid Corporation of China brings forward the development concept of accelerating the construction of UHV power grid with 1000KV AC and±800KV DC power transmission. 1. The construction of UHV power grid is the objective for the development of Chinese power industry.

18. UHV power grid will push the intensive development of large coal-power, large hydro-power and large nuclear power, which will promote the effective exploration and utilization of energy resources in Western China area such as Xinjiang Autonomous Region and Tibet Autonomous Region; improve the comprehensive energy utilization efficiency; and promote international electric energy exploration and cooperation with surrounding countries. UHV power grid will push the intensive development of large coal-power, large hydro-power and large nuclear power, which will promote the effective exploration and utilization of energy resources in Western China area such as Xinjiang Autonomous Region and Tibet Autonomous Region; improve the comprehensive energy utilization efficiency; and promote international electric energy exploration and cooperation with surrounding countries.

19. For long-distance, large capacity power transmission, UHV transmission line has distinctive advantages. The construction of UHV power grid can greatly reduce line loss, decrease transmission circuits, saves land resources and construction investment. For long-distance, large capacity power transmission, UHV transmission line has distinctive advantages. The construction of UHV power grid can greatly reduce line loss, decrease transmission circuits, saves land resources and construction investment. The construction of UHV power grid can also fully exert the network benefits of large power grids; improve security and economic operation level of the power grid. Especially by researching and manufacturing of those key technology and equipments of UHV, it will promote Chinese electric power technical innovation, improve the manufacturing standards of Chinese manufactures. The construction of UHV power grid can also fully exert the network benefits of large power grids; improve security and economic operation level of the power grid. Especially by researching and manufacturing of those key technology and equipments of UHV, it will promote Chinese electric power technical innovation, improve the manufacturing standards of Chinese manufactures.

20. According to the plan, it is anticipated that around 2020, the UHV backbone network will be preliminarily completed. The ability and scale of power grid to optimize resources allocation will be greatly improved. This will greatly improve efficient exploration and utilization of Chinese energy resources. At that time, SGCC will form a power grid with interregional or even international transmission capacity over 250GW by UHV line. The operational stability and anti faults ability will also be greatly improved. According to the plan, it is anticipated that around 2020, the UHV backbone network will be preliminarily completed. The ability and scale of power grid to optimize resources allocation will be greatly improved. This will greatly improve efficient exploration and utilization of Chinese energy resources. At that time, SGCC will form a power grid with interregional or even international transmission capacity over 250GW by UHV line. The operational stability and anti faults ability will also be greatly improved.

21. By organization and coordination of relevant government agencies, SGCC is actively promoting the UHV power grid development planning, key technology research and preliminary work for relevant projects. Productive progress has been achieved. By organization and coordination of relevant government agencies, SGCC is actively promoting the UHV power grid development planning, key technology research and preliminary work for relevant projects. Productive progress has been achieved. The successful completion and operation of 750kv project in this September has accumulated precious experiences for us. The successful experiences of UHV transmission line construction and operation in the world also provide us with instructive references. The successful completion and operation of 750kv project in this September has accumulated precious experiences for us. The successful experiences of UHV transmission line construction and operation in the world also provide us with instructive references. 2. The Chinese Government attaches great importance and highly support the SGCC’s concept on developing UHV power grid.

22. At present, the research and development of the first 1000kv AC UHV project is urgently being carried out. We will try our best to have an earlier start for the project. At present, the research and development of the first 1000kv AC UHV project is urgently being carried out. We will try our best to have an earlier start for the project. UHV power grid is an important orientation for technical development of power grid. The development of Chinese UHV power grid will vigorously promote the self-innovative of electric power industry and will surely push the power grid technology development and application in world wide. State Grid Corporation of China do hope to strengthen our cooperation with all utilities in various countries. UHV power grid is an important orientation for technical development of power grid. The development of Chinese UHV power grid will vigorously promote the self-innovative of electric power industry and will surely push the power grid technology development and application in world wide. State Grid Corporation of China do hope to strengthen our cooperation with all utilities in various countries.

23. VLPGO has provided Chinese and foreign power grid utilities a nice platform to further communicate and cooperate. We highly value the opportunity and look forward to launching international cooperation based upon equality and mutually sharing benefit principle to achieve high efficiency and jointly work together for the goal of sustainable development of power industry for our countries. VLPGO has provided Chinese and foreign power grid utilities a nice platform to further communicate and cooperate. We highly value the opportunity and look forward to launching international cooperation based upon equality and mutually sharing benefit principle to achieve high efficiency and jointly work together for the goal of sustainable development of power industry for our countries.

24. Thank you!