Message from the Chairman

The major strategic deployment for thoroughly deepening the reform made at the Third Plenary Session of 18th CPC Central Committee will further emancipate and develop China's social productive forces and creativity. Nowadays, the third industrial revolution is being conceived with the breakthroughs from new energy technology, smart technology, information technology and the Internet technology,bringing an unprecedented historical opportunity to China's sustainable development of energy and  electric power. Now, SGCC's most fundamental, important and urgent social responsibility is to thoroughly implement the spirit of the Third Plenary Session,accelerate the construction of Strong and Smart Grid, seize this opportunity in the new revolution to win competitive advantages, promote safe, clean,environmental and friendly development of energy, serve for building a moderately prosperous society and contribute to the Chinese Dream of great rejuvenation.

Smart Grid is a catalyst for the 3rd Industrial Revolution. Energy is the premise for human survival and development. For the past two centuries, the human society has already experienced two industrial revolutions. Looking at the evolution of industrial civilization, one can easily identify that the energy reform is crucial to the industrial development and exerts an overall influence to the progress of industrial civilization to the next level with more advanced evolution.

Historically, the industrial revolution based on the conventional fossil fuel utilization can hardly sustain itself. The 3rd Industrial Revolution should be built on sustainable energies. It has become a strategic trend in the world to shift the energy utilization center to electric power.Future energy reforms will focus on cleaner and more economical electricity generation, safer and more efficient resource allocation, and more convenient and reliable power consumption. It's only a matter of time for electricity fueled by renewables to replace fossil fuels.

Smart grid is the catalyst for the 3rd Industrial Revolution, able to promote its overall advance. The successes of Britain and the U.S.during the first and second industrial revolution tell us that whoever takes the initiative establishes a competitive advantage and can finally win. Faced with the 3rd Industrial Revolution, the energy and electric power industry should implement the spirit of the 3rd Plenary Session of the 18th CPC Central Committee, fully deepen the reform as an opportunity, follow the development trend, and seize the historic opportunity to accelerate the construction of smart grid. Thus, we can take the commanding heights in this new round of energy reform and enable safe, clean, green and friendly development of energy. The industry can then play an important role in building a moderately prosperous society and achieving the Chinese Dream of national rejuvenation.

Seize the strategic opportunity to promote China's Smart Grid innovation. Smart grid is not only important infrastructure to guarantee the national energy supply, it also interconnects with various networks and infrastructures, playing a vital role in promoting a leapfrog development of China's infrastructure. Meanwhile, smart grid integrates the new energy technology, smart technology, information technology and the Internet technology, which are the core of the 3rd Industrial Revolution. Therefore, it is significant for China to promote smart grid and thus boost strategic emerging industries as well as economic transform and upgrade. In recent years, Chinese companies have carried out fruitful work and made a series of major breakthroughs in theoretical research, technical innovation, equipment development, standard formulation, engineering construction, and test capacity building, leading the edge in the world. Many UHV AC/DC transmission projects have been put into operation, and a batch of smart grid comprehensive demonstration projects have also been built,such as the Sino-Singapore Tianjin Eco-city and the National  Wind/PV/Energy Storage and Smart Transmission Demonstration Project in Zhangbei. Moreover, full-fledged and world-leading test and research system has been built. China is leading in smart grid standardization and ready for overall construction of smart grid. We have to recognize the inevitable trend of increasingly higher grid voltage, bigger integration scale and stronger allocation capability and prioritize the development of smart grid as the pioneering industry of the 3rd Industrial Revolution.

Developing smart grid can effectively solve the four major problems facing China's energy development and realize a safe, clean, green and friendly development of energy. Safe development is to use the smart grid as the market and allocation platform, coordinating the use of domestic and foreign resources, promote large-scale intensive development of energy, large-scale optimized allocation and efficient and thorough utilization, increase total supply, lower energy intensity,reduce energy loss, prevent supply-demand imbalance, and ensure a stable and reliable energy supply. Clean development is to use smart grid to promote new energy and distributed generation, improve energy structure, protect the natural environment, and minimize dependence on fossil fuels. Green development is to fully exert the function of smart grid, coordinate the use of national environmental capacity, replace oil and coal by electricity which can be transmitted from afar, improve electrification level, and effectively mitigate the pollution to air, water and soil in Mid and East China. Friendly development is to leverage the open and interactive advantages of the smart grid to flexibly adapt to the generation from varied power resources and different consumption demands from customers, and make energy development and consumption more convenient and life more comfortable and economical.

Smart grid development requires key technology breakthroughs. First is to speed up UHV grid construction. With the "North-East-Central"synchronous UHV grids as a priority, China will build five vertical and five horizontal UHV AC grids and 27 loops of UHV DC projects by 2020, capable of allocating 450GW of electricity on a large scale and accommodating 550GW of clean energy. Second is to accelerate distribution grid upgrade. A smart distribution grid that is technically advanced, structurally optimized, rationally distributed, efficient and flexible, self-healing under fault mode will be built to accommodate rapid development of distributed generation and micro-grids. Third is to enhance the interactivity of grids. A smart user management system and bi-directional interaction platform will be built to enable families to manage their own energy consumption through smart grid and purchase electricity through mobile terminals. This platform will also provide such services as collective water/power/gas meter reading,information inquiry, remote control of home appliances, facilitating people's smart life conveniences. Fourth is to accelerate formation of a national power market system. It is clearly stated in the third plenary session of the 18th Communist Party of China Central Committee that market should play a decisive role in allocating resources and the modern market system should be improved. Bearing this in mind, we will target at building a unified, open, competitive and orderly national power market system, with Smart Grid as a platform, that integrates multi-functions like energy transmission, resource allocation, market transaction, customer service.

Whether we can take a firm grip of this historic opportunity brought by the third industrial revolution will determine China's position in the future global  competition to a great extent. Much different from the scenario of previous two revolutions, this time China is well on the road to revive, with new energy and smart grid standing at the forefront of the world technology edge, which in turn grants China a favorable position in the new round of energy reform. Now China is well-equipped with the necessities to pioneer and lead the third round of industrial revolution. History shouldn¡¯t repeat this time and chances easier missed than seized. Energy utilities should embrace this historic mission and solidify and enlarge our edge. SGCC will always play an exemplary role of responsible central enterprises, accelerate the development of the smart grid, lead the transformation and innovation and actively contribute to the great rejuvenation of Chinese nation.

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