Ausgrid: Was China’s State Grid rejected because it is too green?

The Australian federal government has explained its decision to ban the purchase of New South Wales electricity network on the basis of “national security”. But what if the decision was really about State Grid being an affront to the Coalition’s ideological opposition to renewable energy.

The Turnbull government has managed to reveal its true colours on renewable energy in the wake of the South Australia blackout. Even though all authorities have said that the source of energy had nothing to do with the catastrophic failure, the Coalition has used the event to attack renewable energy.

It has questioned the role of renewable energy in energy security, and used it as an excuse to try and force the Labor states to abandon their individual renewable energy targets, which the Coalition describes as “reckless” and “too ambitious”.

But what if they had to deal with the head of one of Australia’s largest networks who questioned those assumptions. One is tempted to think that that is exactly what State Grid chairman Liu Zhenha (above) would have done – if not publicly then at least behind the scenes.

A few months ago, Liu was invited to an oil and gas conference in Texas where he was asked about his views on how much renewable energy could be incorporated into the grid. They expected him to say “not much”, but he stunned the audience by saying “quite a lot”.

“It is not a technical issue but a cultural one,” he told the audience. And that is clearly what he believes.

Liu has also unveiled an ambitious plan to power the world by wind and solar. He thinks 80 per cent of the world’s energy needs – and that includes transport, heating and industrial use – can be met by wind and solar by 2050.

And, just to show he knows what he is talking about, he wrote a highly technical book called Global Energy Interconnection, to show how it could work.

Liu envisages a “global village” of efficient transmission lines but says there would be no central power distributing authority. Instead, he sees an internet-like smart grid that would distribute power as needed, its allocations shifting automatically as the globe turned and different regions reached their peak energy demand during the day.

Such predictions would be enough to make Australia’s Coalition members to choke on the IPA corn fritters and short whites, even though a net zero carbon grid is effectively what Australia has signed up for in the Paris climate deal.

Turnbull, the man who once spoke approvingly of a 100 per cent renewable energy scenario, now describes 50 per cent by 2030 for Australia, or indeed any individual state, as reckless. One wonders what he is thinking might replace the coal fired generators that will have to retire in the interim.

But more on Lio Zhenha’s vision for global energy. His vision is for a $50 trillion global electricity network that link existing and future solar farms, wind turbines and electricity plants in Asia, Europe, Africa and the Americas.

That plan involves buying networks across the world, although he wants to start it off in the Asia region, which is presumably why State grid was interested in Augrid, although it already owns the largest single shareholding in ElectraNet , which runs the major transmission lines in South Australia, and a 20 per cent stake in Victoria’s Ausnet.

Liu describes it as a “global village” of efficient transmission lines to tap and distribute electricity from giant solar farms around the equator and wind stations in the Arctic. Liu estimated that the global network could mean clean energy comprising 80 per cent of global consumption, displacing fossil fuels as Earth’s principal energy source.

Energy transmission technology “has matured and clean energy is becoming more economical, so the conditions for building global power interconnection already exist,” Liu said in a statement on the company’s website.

The Wall Street Journal took a closer look at Liu’s plans in an article earlier this year, noting that the plans have attracted the interest of the likes of Fatih Birol, head of the Paris-based International Energy Administration, and Masayoshi Son, the CEO of Japan conglomerate SoftBank Group.

It may seem far-fetched, but State Grid’s plan is straightforward and much of it is technically feasible, the WSJ quoted the experts said.

“Most of its premises are fundamentally correct,” said David Sandalow, a former U.S. acting undersecretary of energy who has spoken with Liu about State Grid’s proposal and attended its launch.

Like Liu, Sandalow says that the major barriers to success are not technical, but “institutional.” He went on: “It’s an open question whether national governments will be open to such a revolutionary idea.”

Indeed, he pointed out that among those hurdles are the national security questions surrounding the tethering of one country’s power grid with others, and concerns about vulnerability of grids to cyberattacks could weigh on building such a network across national borders.