China to Assist with Transition of Power Grids in Africa and Central America to Renewable Energy

On April 12, the state-owned State Grid Cor­po­ra­tion of Chi­na (SGCCsigned a mem­o­ran­dum of under­stand­ing (MoU) with the Inter­na­tion­al Renew­able Ener­gy Agency (IRENA), where­by the two enti­ties agreed to coop­er­ate in the tran­si­tion­ing of nation­al and region­al pow­er sec­tors to sus­tain­able ener­gy both in Chi­na and in IRENA’s “Clean Ener­gy Cor­ri­dor” regions abroad.  These regions present­ly include Africa and Cen­tral Amer­i­ca, align­ing with the fol­low­ing three IRENA ini­tia­tives: the Africa Clean Ener­gy Cor­ri­dor, the West Africa Clean Ener­gy Cor­ri­dor, and the Clean Ener­gy Cor­ri­dor for Cen­tral Amer­i­ca. IRENA is an Abu Dhabi-based inter­gov­ern­men­tal orga­ni­za­tion estab­lished to sup­port coun­tries with their tran­si­tion to renew­able ener­gy.  The orga­ni­za­tion is an offi­cial Unit­ed Nations observ­er and has 160 mem­bers coun­tries (as well as the Euro­pean Union).

The MoU cites joint efforts to pro­mote renew­able ener­gy usage and the decar­boniza­tion of region­al pow­er grid infra­struc­ture (as ascribed by the Paris Agree­ment and UN Sus­tain­able Devel­op­ment Goals).  For SGCC, how­ev­er, close coop­er­a­tion with IRENA could also offer sev­er­al strate­gic ben­e­fits of impor­tance to Bei­jing, includ­ing: improved access to the tech­ni­cal details and needs of the crit­i­cal pow­er grid infra­struc­tures of the coun­tries in these regions; access to new mar­kets through which to inter­na­tion­al­ize Chi­nese pow­er tech­nol­o­gy and stan­dards; and an oppor­tu­ni­ty for SGCC to expand its efforts to build a glob­al inter­con­nect­ed pow­er trans­mis­sion net­work under the ban­ner of the Glob­al Ener­gy Inter­con­nec­tion Ini­tia­tive (GEI), which is spear­head­ed by Bei­jing. 

Con­ceived by SGCC and first pre­sent­ed by Pres­i­dent Xi Jin­ping at the 2015 UN Sus­tain­able Devel­op­ment Sum­mit, GEI has been depict­ed as a vision for real­iz­ing glob­al decar­boniza­tion efforts in the pow­er sec­tor, while build­ing cross-bor­der ener­gy grid inte­gra­tion under­pinned by SGC­C’s ultra-high volt­age direct cur­rent trans­mis­sion (UHVDC) and smart grid tech­nolo­gies.  This approach is seen by many as a crit­i­cal advance­ment in sus­tain­able long-dis­tance pow­er trans­mis­sion. As the world’s largest investor in UHVDC tech­nol­o­gy, SGCC is at the fore­front of export­ing the capa­bil­i­ty glob­al­ly. 

SGC­C’s advo­ca­cy and pro­lif­er­a­tion of this tech­nol­o­gy, how­ev­er, has raised con­cerns about the asso­ci­at­ed strate­gic lever­age it could deliv­er to Bei­jing, as it could cre­ate con­sid­er­able ener­gy sec­tor depen­den­cies on Chi­na that expand Beijing’s eco­nom­ic and polit­i­cal influ­ence in regions where the tech­nol­o­gy is deployed.  Beijing’s push for GEI has also come along­side SGCC’s strate­gic export of UHVDC and smart grid tech­nolo­gies.  SGCC’s MoU with IRENA even ref­er­ences these con­tri­bu­tions.  In the con­text of the MoU, State Grid’s pres­i­dent, Xin Baoan, indi­cat­ed the company’s inten­tions to estab­lish “a new type of renew­able ener­gy dom­i­nant pow­er sys­tem” that involves, “elec­tri­fy­ing end-use con­sump­tion, and upgrad­ing the pow­er grid to the ener­gy internet.”