International smart grid investments
In two weeks, the China EPower conference and trade show will open in Shanghai, though I'll be in New Orleans for IEEE PES 2010.
The United States will have a "pavilion" at China EPower, which is also known as the "10th China International Electric Power & Electric Engineering Technology Exhibition," as will Germany, Spain, India, Taiwan and South Korea. Organizers are expecting more than 15,000 visitors. (The bulk, I suspect, from abroad.)
There are more than seven billion reasons why: this year, China is set to top the list of national investments in smart grid activity, with $7.3 billion, according to market research firm Zpryme. The U.S. ranks second with nearly $7.1 billion in spending. Next come Japan ($849 million), South Korea ($824 million) and Spain ($807 million), then Germany ($397 million), Australia ($360 million) and the United Kingdom ($290 million).
I trot out these figures because they remind me that many countries view the smart grid as an opportunity to support energy security - meaning independence and sustainability - as well as a clean-energy economy, which can drive job creation and business development.
Naturally, many American companies will present their wares in China in late April just as they will in New Orleans. China and the U.S. are the world's biggest investors in a race to enjoy and export efficient use of resources and clean-energy technology. And China now has the edge, in terms of spending.
China's investment, of course, is both an opportunity for and a challenge to the U.S. At the time of Zpryme's report in January, Managing Director Mark Ishac stated:
"China's investment in smart grids and related technologies already exceed investment in power generation. In order to capitalize on China's break-neck growth, it's imperative that recognized corporations and start-ups understand its 'master plan' to establish a nationwide smart grid in Asia's fastest growing economy - both at a consumer and business level."
The opportunity for U.S. firms to sell their wares to China, of course, is good for those firms' bottomline and for U.S. exports overall.
The mention of a "master plan," however, has to be a wake-up call for all Americans.
For global environmental reasons, it's good for China to speed through its coal-dominated phase and do more with natural gas, nuclear and renewable power sources. It behooves us to help other nations avoid head-to-head conflicts over global supplies of oil, coal and other finite, traditional energy sources.
It must be difficult to predict, even for experts (and I'm not one of them), how far China and the U.S. can go towards a clean-energy economy with roughly similar levels of investment. To power our respective countries we use 40 percent petroleum (China, 20 percent), 23 percent each of natural gas and coal (China uses 70 percent coal, 3 percent natural gas), we use 8.4 percent nuclear (China 1 percent) and about 6 percent is hydropower (similar to China). And it's clear that China has a command-and-control political structure and only a nascent, market-based economy.
The upshot, however, is that China has a "master plan" and we do not. We do not even have a national energy policy. In fact, we have a barely functioning government and a public discourse so fouled by partisanship and vitriol and misinformation and noise that we as a country have no well-defined future.
As the U.S. federal government encourages smart grid development, there will be false starts and dollars wasted. For instance, perhaps smart meters are all about utility advantages and not so much the enabler for the ratepayers who will pay for them. But massive spending on them has forced us to think harder and define choices more clearly. The discussion is trending towards what meters ought to do and what alternative gateways are available to the home or business -- and that's good, even with inefficiencies.
Establishing and maintaining the momentum for a national energy policy - including a price signal on carbon - is critical. To say it can't get done in an election year - despite the political realities - is a pathetic outlook.
The alternative? In a few years, China EPower in Shanghai will be the only game in town.
Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757
