State Grid Corporation of China (SGCC)

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Corporate Profile

SGCC was established as a state-owned enterprise on December 29, 2002. It has been rated as an A-Class enterprise by SASAC evaluation on operation performances for 9 consecutive years. As the largest utility in the world, SGCC ranked 7th on Fortune Global 500.

SGCC constructs and operates power grids as its core business, to provide safer, cleaner, and more economic and ustainable power supply. As a super-large stateowned enterprise crucial to national energy security and economic lifeline, SGCC operates as a group with 200 billion registered capital and 1.87 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 and Australia, etc with good performance.

The company’s core businesses are the construction and operation of power network that covers 26 provinces, autonomous regions and municipalities.

 

International Cooperation

 

Li Keqiang and Rousseff Unveiled the Groundbreaking Ceremony of Brazil’s Belo Monte Hydropower UHV Transmission Project

On May 19 local time, the groundbreaking ceremony of Brazil’s Belo Monte Hydropower UHV Transmission Project was held in the Brazilian capital, Brasilia. Chinese Premier Li Keqiang, who was visiting the country, attended the ceremony with Brazilian President Dilma Rousseff and unveiled the project together. SGCC Chairman Liu Zhenya and Eletrobras CEO Costa were also present at the ceremony. It is the first overseas UHV DC transmission project of SGCC, remarking an important breakthrough in the “Going Global” strategy for its UHV technologies as well as a new milestone in the power cooperation between China and Brazil.

In February 2014, a consortium made of 51% shares owned by SGCC and 49% shares owned by Eletrobras won the bid of Brazil’s Belo Monte Hydropower UHV Transmission Project, which was the first overseas UHV DC transmission project of SGCC. In July 2014, under the witness of the leaders from two countries, SGCC and Eletrobras signed the cooperation agreement.

The Project is the delivering project of Brazil’s second largest hydropower station – Belo Monte, whose designed capacity is 11GW. It is the first ± 800kV UHV DC transmission line in the Americas and can deliver hydropower from North Brazil to the southeastern load center. Starting from Pará and ending at Estado de Minas Gerais, it will construct two converters in Rio Xingu and Estrela. The total length is 2,084 km and will be finished in the end of 2017.

Brazil’s energy demand grows fast and energy resources are far away from its productivity. Hydropower is the dominant energy in Brazil. In 2012, hydropower accounted for 70% of total installed capacity and still had large development space. Brazil’s load centers are relatively concentrated that 80% of them locate in the South and Southeast. The most abundant hydropower resource is the Amazon River Region in the North, but its generation capacity can only meet local demand. Along with the economic development in recent years, the demand for electricity, therefore, grows fast. The large-scale electric power should be delivered to the South and Southeast load centers to achieve the optimal allocation of energy resources.

UHV is an advanced, safe, efficient and green power transmission technology, as well as a major world’s leading independent innovation of China. It has competitive advantages of large capacity, long distance, low loss, less land use, outstanding scale economy and network economy. Its effect in safe, economic and clean development is huge. Developing UHV power transmission to realize large-scale development, large-capacity and long-distance transportation is a feasible path to guarantee safe and reliable energy supply and satisfy the economic and social development needs of Brazil.

As the first overseas UHV DC transmission project of SGCC, the Project is of great significance in bringing UHV transmission technology, equipment and experience out of China, promoting China’s high-end technology to the world, pushing forward Brazil’s UHV grid construction and closing the cooperation in economy and trade between China and Brazil.

In recent years, SGCC took the comprehensive edges of management, technology, talents, capital and brand to actively explore the global market and enhance international competitiveness. So far, the Company has successfully operated the backbone energy grids in Brazil, Portugal, Australia, Italy, Philippines and Hong Kong. Overseas assets reached $29.8 billion, 17 times that of 2009, and remained good investment returns. In 2010, State Grid Brazil Holding Co. (SGBH) was established in Rio de Janeiro, carrying out transmission assets investment and operation business. Its current operating transmission lines are 6,748 km and another 6,054 km transmission lines are under construction. It is the fourth largest transmission operator in Brazil with assets covering the load centers in Brasilia, Sao Paulo and Rio de Janeiro.

 

SGCC Completes the Acquisition of SP’s Australian Assets

SGID and Singapore Power Limited (SP) completed the equity settlement in Australia. Chinese Consul General in Melbourne Song Yumin, SGCC EVP Du Zhigang and SP CEO Wong Kim Yin attended the ceremony. SGCC signed an agreement with SP to buy 60% stake in SPIAA and 19.9% stake in SP AusNet, both of which are Singapore Power’s Australian assets.

Both of the companies mainly operate in economically developed Australian states and territories including Victoria, Queensland, New South Wales and Australian Capital Territory. They have scaled assets and excellent assets. SPIAA runs power distribution, gas transmission and distribution, infrastructure services in Victoria, Queensland, and New South Wales with an asset of 8.943 billion Australian dollars. SP AusNet, a provider of similar energy services in the state of Victoria, has 49 percent of stakes owned by public shareholders. It is listed on both the Australian Securities Exchange and the Singapore Exchange.

Starting from April 2012, SGCC has been working on the acquisition of these two companies. The purchase agreement was signed on May 16, 2013 after a series of detailed and painstaking efforts, such due diligence, asset valuation, management interview and contract negotiation. The deal was approved by the Australian government on December 20.

This acquisition is another major overseas investment project after the successes in the Philippines, Brazil, Portugal and South Australia. It’s the biggest investment project by far. Also, it’s the first time for SGCC to invest in overseas electricity and gas distribution assets, complementing the company’s overseas asset portfolio and its globalization layout. The acquisition can exert SGCC’s technical and management advantages in large grid operation. By working closely with SP, SGCC can actively fulfill its shareholder responsibilities to ensure the safe and stable operation of acquired assets and promote the economic development in the service region.

 

SGCC Signed the Equity Acquisition Agreement with REN

SGCC President Liu Zhenya signed the Equity Acquisition Agreement with Parpublica and the Umbrella Agreement with REN at the signing ceremony held in Lisbon, Portugal in the morning of February 22 local time, which was chaired by Portuguese Finance Minister Vitor Gaspar.

When delivering a speech at the ceremony, Liu Zhenya mentioned that ZEN’s privatization was transparent and open and China’s SGCC has obtained the trust and support from the Portuguese government in the bidding process. Ranking the 7th on Fortune Global 500 in 2011, SGCC now operates and manages the transmission and distribution power grid with the highest voltage level and the largest scale and serving the largest number of population. The company is dedicated to technical innovation in power and electricity, especially in UHV, smart grid and big grid operation and control, which possess a leading position in the world. As an important utility enterprise in Portugal, REN has a perfect transmission network for electricity and natural gas. It is quite influential in Portugal, Africa and South-American Portuguese-speaking countries with good performance. SGCC and REN can compliment each other. The strategic acquisition will bring a new historic opportunity to REN for innovative and sustainable development. Adhering to the transparent and open principle, SGCC vows to strengthen the communication and cooperation with shareholders, take into consideration the demands from stakeholders, abide by the laws and regulations of the Portuguese government, fulfill every commitment, fully respect REN’s corporate culture, promote REN’s sustainable and healthy development with endeavor from all parties, provide safe and reliable energy to Portugal, and make positive contributions to the economic and social development for China and Portugal.

During his stay in Portugal, Liu Zhenya met with Portuguese PM Pedro Passos Coelho and had an in-depth discussion regarding practical cooperation in the field of electricity and power. Premier Coelho sang highly of SGCC’s achievement in UHV and smart grid, and indicated the alliance with competent enterprises like SGCC would bring historical opportunities to REN for innovative and sustainable development. He hoped that two sides would strengthen exchange and cooperation, consolidate and expand the accomplishment, and make new contribution to the mutual benefit and development for both China and Portugal.

Liu Zhenya also met with Portuguese Finance Minister Vitor Gaspar, Foreign Minister Paulo Portas, Minister of Economy, Labor, Transport, Public Works and Communications Álvaro Santos Pereira, ERSE Chairman Vitor Santos, and REN president Rue Cartaxo.

 

Projects

 

Sino-Russia B2B Converter Station Project in Heihe Put into Trial Operation

Sino-Russia B2B Converter Station Project in Heihe, SGCC’s first international DC transmission project, was officially put into trial operation at 23:00 on December 31 2011, after finishing all system adjustments. It signified the commencement of transporting clean power purchased from Russia by SGCC to China. The overall goal to start operation in 2011 was achieved.

The project, with a transmission capacity of 750MW, is currently China’s largest power transmission and transformation project for power purchased from overseas. The project is a result of implementing the “Going Global”national power strategy, and is important to promote Sino-Russia cooperation on energy and trade. The deployment of the project has accumulated experience for expanding on Sino-Russia energy co-operations, and born a strategic significance to enhance both sides’ complementarity of economic development and advantages and propel the rapid development on the energy industry as well as equipment manufacturing industry for both countries.

The Sino-Russia B2B Interconnection Project resumed reconstruction in May 2011. After 7 months’ joint endeavor from all workers, the project successfully run 168 hours in trial after all commissioning tasks, despite a tight time schedule, heavily-loaded tasks, and severe weather conditions.

 

World’s First ±660 KV Live Working Project

Wang Jin from Shandong Electric Power EHV Corporation successfully returned to the ground after finishing all the tasks with No. 2012 Tower of Yindong DC Transmission Project at 11:22, October 17, 2011, which created a new world record by completing the first ±660 KV live working project.

Yindong DC Transmission Project is the first ±660 KV transmission grid worldwide, which is an important component of the project for delivering electricity from the West to the East. With the full capacity of 4 million KW, Yindong DC Project accounts for almost 10% of the total capacity of Shandong grid. Equipped with the largest capacity among three grids that come from the west to Shandong province, Yindong DC Project is too important to stop operating.

To ensure the smooth operation of Yindong DC Transmission Project, Shandong Electric Power Corporation has increased the input on technology since last year. The company successfully established the SGCC 2011 Management & Tech Program of “the Research on ±660 KV Transmission Grid Tools and Methods for Live working”. Shandong Electric Power EHV Corporation proactively carried out key technology researches and developed the methods and tools for live working. Meanwhile, the strengthened intellectual training and rehearsals also contributed to the trial’s success.

The bolt on the clip of conducting wire of No. 2012 Tower dropped. Due to the special location of the tower, Shandong transmission grid would suffer a loss of 4 million KW power supply if 10 million KW power supply had lost arising from the electric power cut. Therefore the company decided to conduct live working with the support of mature technology and tools. The company paid great attention to the trail. President Li Tongzhi hosted the coordination meeting on the work arrangements and assignments on October 16. Li Tongzhi and Jiang Longhua came to the Emergency Command Center to lead the operation on site with the accompany of other leaders, e.g. Zhang Fangzheng and Liu Qingxin. Preparation staff conscientiously checked every procedure of the operation, analyzed potential risk, mastered the tools for live working and rehearsed over and over again. Operation executors Wang Jin, Liu Xingjun, Xu Yuanchao, and Cui Xunlong are all skilled and experienced technology staff.

During the operation, executors replaced the bolt smoothly in 50 minutes. At the same time, they repaired the wire and replaced the spacer, successfully completing the world’s first ±660 KV live working project. Through this, the company accumulated valuable experience for maintaining the Yindong DC Transmission Project.

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