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July grid-connected distributed power supply project doubles development prospects
In recent months, the Ministry of Finance and the National Development and Reform Commission have introduced new policies for distributed power generation, prompting China Southern Power Grid Co., Ltd. to issue detailed guidance on supporting the development of new energy sources like solar power. The policy covers grid connection, power purchase, sales, and dispatch management, aiming to ensure a coordinated and orderly expansion of renewable energy. Meanwhile, the State Grid Corporation has expanded its role beyond just technical consultation and project commissioning, now focusing on strengthening distribution network infrastructure to support large-scale integration of distributed power sources.
This shift has led to a significant increase in distributed power projects across the country. For instance, in July, the number of grid-connected distributed projects doubled compared to previous months. In Zhengzhou, Henan Province, a resident named Zhang Hairun successfully connected his photovoltaic system to the grid after testing by the local power company. In Ningbo, Zhejiang, a 20 MW user-side photovoltaic project was officially connected to the grid, marking the largest such project in the region. Similarly, in Shanxi, a resident named Zhao Ruixing became the first household to connect a 18 kW solar system to the grid with the help of Changzhi Power Supply Company.
According to internal sources from the State Grid, since November 1, 2012, the number of distributed photovoltaic installation applications has steadily increased, with many projects successfully going online. As of August 5, 2012, the State Grid had processed 12,803 consulting requests, 943 installation reports, totaling 1.81 million kilowatts of capacity, including 910,100 kW from photovoltaics. Other sources like biomass, wind, and natural gas accounted for 33 projects, totaling 83,600 kW. A total of 225 projects were fully operational, generating 271,100 kW of power and producing 66,023,300 kWh of electricity.
Compared to data from the end of June, where only 604 reporting businesses were accepted with a total capacity of 1.2 million kW, the growth in July was remarkable. This indicates that the pace of distributed power grid connections is accelerating rapidly, with more households and small-scale producers joining the grid.
To address the challenges of integrating decentralized power sources, the State Grid and China Southern Power Grid are investing heavily in modernizing the distribution network. Due to the small scale and decentralized nature of distributed energy systems, the existing grid infrastructure often lags behind, leading to curtailment issues. By building smarter, more resilient distribution networks, grid companies can better manage the influx of solar, wind, and other renewable sources.
The government has also recognized the importance of this transition. Recently, the State Council emphasized the need to strengthen urban distribution networks and promote smart grid technologies as part of its infrastructure development strategy. The State Grid has announced plans to improve distribution networks from 2013 to 2020, extending planning down to the county level.
As more distributed power projects come online, the grid companies are refining their processes, improving service coordination, and updating technical standards to better support these developments. While challenges remain, especially with non-professional users and home-based systems, the government and power companies are working together to create a more supportive environment.
In addition, new policies are being introduced to further boost the industry. The Ministry of Finance has clarified subsidies based on electricity output, while the National Development and Reform Commission has issued interim measures for managing distributed generation. The National Energy Administration and China Development Bank are also preparing financial support mechanisms for distributed photovoltaic projects. These efforts show that the regulatory and policy framework for distributed power is continuously evolving and becoming more robust.