The key to transmission: worldwide trends10 June 2015
GlobalData reports on the trends in worldwide transmission and distribution, with the growing demand for power and heightened environmental concerns driving the development of infrastructure and the addition of renewable sources to grids around the globe.
In 2014, the global electric power transmission network consisted of 5.5 million circuit kilometres (Ckm) of high-voltage transmission lines and had a capacity of 17 million megavolt amperes. In 2009, the total transmission line length was 4.6 million circuit kilometres. Between 2009 and 2014, it increased at a compound annual growth rate (CAGR) of 4.0%, and the majority of the capacity addition was in renewables.
Installed wind power capacity increased at a CAGR of 18.5% from 160 to 372GW between 2009 and 2014. In the 2015-20 forecast period, it is expected to increase at a CAGR of 10.3%. Increase in renewable power capacity will be one of the reasons for transmission length additions. The transmission line length is expected to increase at a CAGR of 3.0%, reaching 6.8 million circuit kilometres in 2020.
China's transmission length increased from 822,000 to 1.1 billion circuit kilometres at a CAGR of 7.0% between 2009 and 2014. In the forecast period, it is expected to increase at a CAGR of 6.0%, reaching 1.6 billion circuit kilometres in 2020.
It is forecasted that China will add 444,000Ckm between 2015 and 2020, equivalent to 48% of the total transmission line added in the forecast period. India (21.6%), Brazil (4.9%), Russia (3.9%), the US (2.8%), Iran (2.5%), Indonesia (1.7%), Saudi Arabia (1.6%), Vietnam (1.5%) and Algeria (1.4%) complete the list of the ten countries with the highest transmission line additions in the forecast period.
T&D infrastructure of state-owned companies
In China, the transmission sector is dominated by two state-owned agencies: the State Grid Corporation of China (SGCC) and China Southern Power Grid (CSG). China's national grid consists of six regional grids; the SGCC deals with the east, central, north-west and north-east grids, and CSG operates in the areas not covered by the SGCC.
India's electricity generation and T&D activities are mainly managed by central and state-level government companies. The majority of power transmission is managed by PowerGrid, a central government enterprise.
In Saudi Arabia, Saudi Electricity Company (SEC) dominates the power sector and, through its wholly owned subsidiary National Grid, provides most of its generation and all of its transmission.
In South Africa, the electricity structure is mainly government controlled and is dominated by the vertically integrated power utility Eskom, which generates, transmits and retails power. Private participation in its electricity sector is negligible. In Europe and the US, private operators manage transmission.
The German transmission grid is unbundled, privatised and operated by four operators: Amprion, TenneT, EnBW Transportnetze and 50Hertz Transmission. The UK power transmission system is deregulated and owned by different groups in various parts of the country by National Grid Electricity Transmission (NGET) in England and Wales; Scottish Power Transmission Limited (SPTL) in south and central Scotland; and and Scottish Hydro Electric Transmission Limited (SHETL) in north Scotland.
In the US, the transmission network is divided into three separate grids: Eastern, Western and the Electric Reliability Council of Texas (ERCOT). The transmission grid is owned and managed by several hundred private and public entities.
The global T&D market
Thermal power is the dominant source of energy in most countries. In order to reduce the environmental impact of fossil fuels, governments across the world are encouraging R&D and rolling out policies and schemes that either incentivise or make mandatory the adoption of integrated gasification combined cycle, combined-cycle gas turbine, carbon capture and sequestration, or combined heat and power technology.
Thermal power is the most reliable source of power, as it is produced at a higher capacity factor. Though it harms the environment, moving away completely from thermal power would jeopardise energy security.
Renewable plants have lower capacity factors, and renewable resources are intermittent in nature; large hydropower generation is severely affected by droughts, for example, and the wind does not always blow. Even nuclear power, which is a clean and efficient resource, is not considered a desirable option after the Fukushima reactor meltdown.
In terms of capacity, thermal power is the largest source of electricity in the world, followed by, in descending order, hydro, nuclear and wind power. Between 2009 and 2014, global installed thermal capacity increased from 3,211 to 3,766GW at a CAGR of 3.2%. In the forecast period, it is expected to increase at a CAGR of 2.8%, reaching 4,436GW in 2020. Installed hydropower capacity increased at a CAGR of 3.4% from 956 to 1,130GW between 2009 and 2014. It is expected to increase at a CAGR of 3.8% in the forecast period, reaching 1,417GW in 2020.
Installed nuclear capacity increased at a CAGR of 0.1% from 373 to 375GW between 2009 and 2014. Nuclear is expected to increase at a CAGR of 3.2% in the forecast period, reaching 454GW of installed capacity in 2020.
Installed wind capacity increased at a CAGR of 18.5% from 160 to 372GW and is expected to increase at a CAGR of 10.3% in the forecast period, reaching 671GW. In 2014, the electric power transmission network consisted of 5.5 million circuit kilometres of high-voltage transmission lines and had a capacity of 17 million megavolt amperes. In 2009, the total transmission line length was 4.6 million circuit kilometres, and between 2009 and 2013, it increased at a CAGR of 4.0%. It is expected to increase at a CAGR of 3.0% in the forecast period, reaching 6.8 million circuit kilometres in 2020.
China is expected to add 444,000Ckm to its transmission line and account for 48% of global additions in the forecast period. India (21.6%), Brazil (4.9%), Russia (3.9%), the US (2.8%), Iran (2.5%), Indonesia (1.7%), Saudi Arabia (1.6%), Vietnam (1.5%) and Algeria (1.4%) have the next highest forecast additions.
From 2009 to 2014, annual investment in transmission lines increased from $53.6 billion to $83.6 billion. This was mainly due to increases in transmission line length and renewable power in major countries. With power capacity expected to grow at a lower rate, the annual investment is estimated to be $86-97 billion in the 2015-20 period. Figure 2 (above, left) shows the global investment in transmission lines between 2009 and 2020.
Country focus: China
Between 2009 and 2014, generation in China increased by 58.5% from 3,418.0 to 5,419.0TWh. China imported only 9.8TWh in 2014 - just 0.2% of its generation. It imports power from hydroelectric power stations in Myanmar. It also consumes 99% of its generation and exports the rest to its neighbouring countries. Its electricity losses from T&D totalled 6% in the 2009-14 period.
In 2014, China's network capacity was 4.6 million megavolt amperes, having grown at a CAGR of 10% between 2009 and 2014. The majority of the network's lines were at the 110 and 220kV voltage levels. The total line length is expected to grow at a CAGR of 6% between 2014 and 2020.