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Regional super power grids face political obstacles

Oxford Analytica

Rising energy demand and the need to phase out fossil fuels are enhancing the appeal of long-distance power lines

A draft study for a global power grid will be presented to the annual meeting of the International Council on Large Electric Systems (CIGRE), opening on August 18 in Paris. Its proponents argue that interconnecting the world’s power grids would make it easier for renewable energy, however remotely it is generated, to replace most fossil fuels in electricity generation. Implementation remains a distant, and politically fraught, possibility but regional super-grids look increasingly feasible and could boost the submarine cable industry.

What next

National decarbonisation goals will increase the need for long-distance power transmission lines, overland and underwater, to access otherwise stranded solar, wind, hydroelectric and possibly nuclear power generation and monetise them through international electricity trading markets. These transmission lines will evolve into regional super-grids crossing international boundaries. Technical standards, power trading rules and governance will become increasingly politicised.

Subsidiary Impacts

  •  Load-balancing on a global scale could reduce peak load generation needs by an estimated 5-10%, saving billions in investment.
  •  Power grids require estimated investment of USD14tn by 2050, nearly as much as projected spending on new renewables capacity.
  •  International rules on carbon pricing and taxing would be a prerequisite for a global power grid.

Analysis

High-voltage submarine power cables have been laid for decades, often short, alternating current (AC) connections between islands and mainland power grids. The Baltic Sea island of Gotland was connected to mainland Sweden by a 98-kilometre underwater cable in 1954. The longest AC cable to date, at 174 kilometres, became operational this year connecting Greece and Crete.

As distances increase, the physics and economics of transmission favour direct current (DC) over AC. NSN Link, a 730-kilometre ultra-high-voltage direct current (UHVDC) cable connecting Norway and the United Kingdom, is now undergoing testing ahead of commercial operation from October. It will lose its status as the longest submarine UHVDC cable as early as next year when Viking Link, a 740-kilometre line connecting Denmark and the United Kingdom, comes on stream.

Around three-quarters of the approximately 20 UHVDC submarine cables now under construction, planning or discussion will cross international borders. As competition in wholesale power markets opens up globally, these cables will facilitate international trading in electric power.

Power lines already account for three-fifths of the USD12bn underwater cable installation market, shared with internet cabling (see INT: US-China tensions loom over undersea cables - June 25, 2021).

Global grid

A global UHVDC power grid would allow power to be transmitted from locations where it can be generated most cheaply -- however remote -- to wherever it is consumed. Vast, utilities-scale solar farms, which cannot be built in urban areas but can be in deserts, could power energy-hungry cities on the other side of the globe.

This promise has gained relevance as states commit to net-zero carbon targets. A global grid would allow optimal exploitation of wind, solar, hydro and nuclear power, potentially replacing most fossil fuels with renewables for power generation. It would also provide some resilience against cyber and other attacks on critical infrastructure (see INT: Infrastructure sees rising cybersecurity risk - May 18, 2021).

Laying the cables for such a grid, even undersea, would be technically straightforward if hugely expensive. The more significant challenges lie in agreeing network design, technical standards, power market trading rules and a governance regime acceptable to two key players, the United States and China.

US-China rivalry

US-China rivalry impedes plans for global power grids

Two grand schemes have emerged.

CIGRE

CIGRE, the leading global think-tank for electric power systems, in 2019 mapped out a global grid of overland and undersea UHVDC cables connecting 22 hub regions across all continents except Antarctica.

A working group has since examined network design, local storage technologies, trading rules and governance issues. Its preliminary findings will be presented at this month's Paris meeting.

China

In 2015, China's President Xi Jinping proposed creating a 'global energy internet' in his first UN address. This was envisioned as a global web of Chinese-made and installed UHVDC transmission lines and inter-connectors that would serve various Chinese ends such as linking up its scattershot investments in developing nations' power grids, exporting surplus renewable energy generated in its western provinces and providing another strand to Xi's Belt and Road Initiative.

The fact that the United States has not voiced the kinds of security concerns about a potential Chinese power grid ecosystem that it has raised about Huawei and 5G probably means that Xi's energy vision has failed to gain international attention.

The plan has faded from presidential speeches and become the agenda of the low-profile Beijing-based Global Energy Interconnection Development and Cooperation Organisation. This promotes strengthening national grids as the basis for regional super-grids that could evolve into a global grid by 2070.

Regional super-grids

Transnational power grids would lower fossil fuel usage

Yet regional super-grids, or at least plans for them, are emerging. Most would cross bodies of water.

Asia

SoftBank founder Masayoshi Son conceived of a super-grid to connect the region to renewable power sources after the 2011 Fukushima nuclear accident. So far, it amounts to little more than a feasibility study for a North-east Asia super-grid linking China, Russia, Japan, South Korea and Mongolia into the Gobi desert's rich potential for renewable energy. If realised, it would mean submarine cables under the Yellow Sea and the Sea of Japan.

It could combine with China's offshore wind farms in the South China Sea that now match their European counterparts' generating capacity and with the country's internal super-grid, the world's most extensive UHVDC network. This transmits solar, wind and hydro power from China's western regions reaches to the east coast industrial heartland and offers export links to South and Central Asia.

A further expansion could include the South-east Asian super-grid intended as an import conduit for northern Australia's abundant solar resources. An undersea cable would run from Australia's Northern Territories along the Indonesian archipelago and on to the Philippines, Malaysia and beyond.

Such a pan-Asian super-grid would also have to cross many political fault lines.

Europe

In April, the EU set up a working group on improving its power grid. Together with Norway and the United Kingdom, EU member countries already have power cables under the North, Irish, Baltic and Mediterranean seas and possess the most developed international energy trading market.

The EU also envisages the development of a multi-nation network of offshore wind farms (see EU: Environment is crucial to energy market - August 27, 2019).

Past EU proposals have included a network of solar power farms in the deserts of North Africa supplying Europe via the Mediterranean. This would be supplemented in a European super-grid by wind and hydropower from the Nordic countries and possibly geothermal power from Iceland via a long-proposed undersea cable to Scotland.

North America

A joint study by Canada, Mexico and the United States on the potential to connect their grids is due to be published later this year.

The infrastructure bill currently before the US Congress allocates some funds to make the three US regional grids more resilient to weather and cyberattacks and compatible with the future needs of electric vehicles.

However, it falls far short of President Joe Biden's original wish for USD100bn for power grid investment and creating a federal Grid Deployment Authority to support his climate agenda.

Outlook

Regardless of whether CIGRE's vision advances or a similar, older but largely ignored Chinese proposal is revived, investment in undersea power cables will increase. Connections to offshore wind generation will drive near-term growth.

However, local microgeneration, battery storage breakthroughs and transportable hydrogen may offer alternatives to long-distance transmission.

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