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.”