Eskom and State Grid Corporation of China to co-operate on strategies

STATE Grid Corporation of China (SGCC), the world’s largest power utility, signed a memorandum of understanding on strategic co-operation with South African electricity parastatal Eskom at a ceremony attended by Chinese President Xi Jinping and SA’s President Jacob Zuma, on December 2.

The signing of the agreement during Xi’s state visit to SA was an indication of the beginning of strategic co-operation between two large state-owned energy companies. SGCC and Eskom are world renowned electricity generating companies that are highly complementary with huge potential for co-operation in the international business, technical, managerial and financial fields.

The memorandum will provide a platform to leverage their expertise and co-operation in the development of business projects, technology sharing and knowledge creation opportunities. It has great significance and will contribute to the enhancement of bilateral economic and trade co-operation between the two countries. It is reported that, under the frame of this memorandum, the two companies will jointly pursue commercial opportunities and exchange technical experience in a variety of areas, including high voltage AC/DC planning and system design, grid construction and engineering, ultra high voltage technology, smart grid technology, large-scale renewable energy and distributed renewable energy grid connection, operating and maintenance strategies, off-grid rural electrification programmes, and international standards compiling.

SGCC is running the highest voltage level AC/DC hybrid power grid in China and it is unique in the world, having had no major blackout in the past 30 years. Leveraging its technical, management, capital and human resources, SGCC gives prominence to implementing internationalised operations and building a world-class enterprise in the fields of overseas investment, engineering, procurement and construction project contracting, equipment export, international organisations participation and global standard establishment.

Its overseas assets are worth more than $25bn including concessions or shares in National Grid Corporation of the Philippines, Portugal’s Redes Energeticas Nacionais, South Australia’s ElectraNet, SPIAA and AusNet, HK Electric, Italy’s CDP Reti and 14 Brazilian transmission concession companies. In the past two years, SGCC has won the two phase bids of Brazil’s Belo Monte hydropower ultra-high voltage transmission projects, with an investment of close to $4bn.

SGCC owns four electrical equipment manufacturing enterprises, and ranks number one in China in this sector. The electrical equipment business mainly makes primary and secondary devices, transmission line materials, renewable energy and hydropower equipment, industrial automation and rail transport machines. China Electric Power Equipment and Technology Company (CET) is a platform of SGCC to implement overseas infrastructure projects and secure contracts for global transmission projects, while NARI Group is the major equipment manufacturing enterprise of SGCC, whose products cover secondary equipment, smart grid equipment and related primary equipment. The two companies have world leading capabilities in project implementation, equipment manufacturing and technical services.

In recent years, SGCC has established its footprint in Africa. Subsidiary CET has contracted the Ethiopia GDHA transmission project for Renaissance Dam with an investment of $1.46bn, which is now under equipment and subsystems commissioning and will soon be completed on schedule in accordance with contract requirements. SGCC is also a key player in the Mphanda Nkuwa hydropower project in Mozambique and Inga 3 project in the Democratic Republic of Congo. The two projects will specifically benefit SA with safe, clean and reliable power supply.

Corporate Profile: SGCC was established as a state owned enterprise on December 29, 2002. The core business of SGCC is the investment, construction and operation of the transmission and distribution power grid. As the largest utility in the world, SGCC ranks seventh on the Fortune Global 500. Besides the core business, SGCC also has financial, manufacturing and international business sectors.

SGCC is the largest power grid constructor and operator in the world. Our mission is to provide safer, cleaner, and more economical and sustainable power supply. As a super-large state owned enterprise crucial to national energy security and economic lifeline, SGCC operates as a group with 200 billion Yuan registered capital and 1.86-million employees. SGCC serves 1.1 billion people in 26 provinces, autonomous regions and municipalities, covering 88% of the national territory. SGCC also operates overseas assets in the Philippines, Brazil, Portugal, Australia, Italy and others with good performance.

Highlights of technological innovation by SGCC:

Ultra-high-voltage (UHV)

Power grid: Three UHV AC and five UHV DC transmission lines are operational. In the plan of 2020, 11 UHV AC transmission lines and 19 UHV DC transmission lines will be in operation.

Smart grid: As of the end of September, the total installed capacity of renewable energy reached 140GW, including about 100GW wind power and more than 30GW solar generation. The world’s largest demonstration project of the integration of wind power, solar power, energy storage and power transmission was put into operation several years ago; completed the construction and upgrade of 1,556 smart substations, installed 270-million smart meters; built 618 electrical vehicle charging/ swapping stations and 24,000 charging piles; completed an internationally leading electric power control centre and customer service centre.

(The story was originally published on Business Day on December 17th, 2015.)

By the numbers

Seventh-largest company on Fortune Global 500

Serving 88% of the national territory

Power to a population of more than 1.1-billion

More than 1.86-million employees

Length of transmission lines: 1,095,000km

Transformation capacity: 3,430GVA

Electricity sales: 3,469.5TWh

Revenue : 2,096.1-billion yuan

Total assets: 2,900.9-billion yuan

Line loss: 6.81%