2016_1 Smart power generation can help China master

Smart Power Generation can help China stop curtailing its wind power

China’s inflexible power system, which can’t respond well to changes in supply and demand, forces it to curtail more of its wind energy every year, despite the country’s renewable-energy ambitions. With wind farms in the north feeding power to the population-dense south, China’s new focus on gas-fuelled generation is welcome, but it needs to be the right gas technology, argues a recent white paper from Wärtsilä.


China is focusing strongly on the deployment of wind and solar energy to support global emission reduction targets. However, to fully optimise the output from wind and solar parks into a legacy system dominated by baseload coal plants, the country needs to fundamentally change its power system. With a high proportion of China’s wind power located in the north and the northeast, and load centres situated in the south and the southeast, the country recognises the need to transmit clean power across the country. To bridge the geographical divide, the Chinese government has plans to invest at least CNY 2 trillion (USD 315 bn) in its power grid (Reuters 2015).

Relocating power, however, is only part of the solution. When energy arrives in the south, China’s power system must be able to balance variable renewable energy. Thermal generators must therefore switch from typical baseload operations and instead deliver flexible and intermittent output that produces power only when wind and solar are not available. To that end, China needs generators with ultra-fast start-up times to provide accurate load following.

While the penetration of wind and solar energy is expected to increase from 6% to 20% by 2030 (Bloomberg New Energy Finance 2015a), China’s nuclear- and coal-dominated generation mix makes load following unworkable. Today, the only option has thus been to curtail variable renewable energy, a practice that comes at great environmental and financial cost. During the first half of 2015, 15% of China’s wind power was curtailed, at a cost of CNY 8.9 bn (USD 1.4 bn) (Bloomberg New Energy Finance 2015b). If nothing is done, that percentage will keep going up as more renewable energy comes online.

In a recent white paper, Wärtsilä crunched numbers to propose a solution in the shape of its Smart Power Generation (SPG): an agile generation technology based on multiple fast-reacting internal combustion engines. Due to the inherent operational flexibility of the engines, SPG power plants can follow precisely the output of wind and solar power. If placed in southern China, SPG installations would help to absorb the variable wind energy from the north. The increased flexibility would in turn make it possible for China to integrate larger shares of wind and solar energy. 

In a CHP (combined heat and power) configuration, SPG power stations can also produce heat for district heating, potentially replacing combined cycle gas turbines (CCGT) or coal-based generation.

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Fig. 1 - China must find ways to reduce wind energy curtailment, as high as 43% in some areas, due to its monetary and environmental impact. Source: Bloomberg New Energy Finance.
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Fig. 2 - As China continues to deploy variable renewable energy, the country needs to absorb new generators into the power system to avoid an increase in wind curtailment costs. Source: Bloomberg New Energy Finance, New Energy Outlook 2015.

Wind curtailment in China

While variable renewable energy accounts for around 6% of total generation in China, yet wind curtailment is already a significant issue. The country curtailed 15.2% of its potential wind energy in the first half of 2015, a dramatic increase from the previous year when the rate was 8.5% (Bloomberg New Energy Finance 2015b). There are a number of reasons why, but most importantly the wind farms’ location triggers curtailment. As demonstrated in Figure 1, there is a stark divide between levels in the north and the south – most notably, the map shows curtailment of 43% in Jilin, a northern province. 

The high levels of wind curtailment in the north are intrinsically linked to the load centres in the south. With China’s major load centres, including Beijing, Shanghai and Guangzhou, located in the south, much of the wind energy has to be transmitted to these regions of great demand, both from private and industry consumers. 

In addition to the transmission challenge, China’s two main grid companies, the state-owned Grid Company of China and China Southern Power Grid Company, prefer to keep all power plants operating at a lower load level rather than shutting down some plants when there’s a supply surplus. This becomes problematic when renewable energy generation peaks, since thermal power plants running at low load do not have any downward flexibility. That’s when the grid companies prefer to curtail the extra renewable output rather than force baseload thermal plants to shut down beyond their already low utilisation rates.

Although China acknowledges its wind curtailment as a problem, the situation has not stopped the country from keeping the rollout of renewables going. Figure 2 shows that solar and wind generation penetration in China is expected to increase from 6% in 2015 to 20% in 2030. 

Solutions to wind curtailment 

First step: expanding transmission network

To avoid wind curtailment, due to the geographical divide between renewable generation and load centres, the Chinese government has plans to invest at least CNY 2 trillion (USD 315 bn) in its power grid (Reuters 2015). This is certainly a desirable development, because expanding the grid is an important step towards an efficient power system with a high penetration of variable renewable generation. A strengthened grid does not, however, solve balancing challenges, because it contains virtually no energy storage capacity. Therefore, when variable renewable energy arrives at China’s load centres, a highly flexible thermal power fleet must balance the power. 

A solution can be found with technology that can ramp up in an instant at minimal cost to provide power when variable renewable energy is not available, and ramp down again at the same speed when wind and solar power come back online. An everyday example is early evenings, when the sun goes down but demand spikes as consumers return home from work. 

Avoiding inflexible gas-fired generation 

While coal and nuclear power plants dominate China’s thermal fleet, the country’s generation mix also includes some gas-fired power plants, and plans are in place to increase their total generation from 2% to 3% by 2030. These operate mainly in China’s cities, including Beijing, where new policies support the closure of coal power plants and the installation of new gas power plants that typically use CCGT technology.

Traditionally, CCGT plants have provided a degree of flexibility by ramping up over a number of hours and then quickly flexing their output to provide system balance through a process known as ‘part-loading’. While this solution may have been adequate in the past when a small amount of renewable energy was integrated into electricity systems, it is not an efficient way to provide the increased amount of flexibility needed in China as renewables increase. Part-loading entails extra costs, including increased carbon costs, reduced fuel efficiency, more generators on the grid and the cost of curtailment. So while China’s gas-fired capacity increase is welcome, close consideration must be given to installing the right type of gas technology. Otherwise China could miss out on introducing flexibility that enables a high penetration of renewables.

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Fig. 3 - Inflexible CCGT plants in the south cannot balance wind power from the north. Instead, wind power is partly curtailed and CCGTs are forced into inefficient part-loading. By contrast, SPG power plants can follow the variable output of renewables in real time and maintain top efficiency also in part-load mode. If placed in the load centres of southern China, SPG plants would help to minimise wind curtailment, hence cutting costs and pollution.
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Fig. 4 - An illustration of the impact of CCGT and SPG load ranges on wind energy curtailment. Through its ability to ramp up from zero to 100% almost instantly, SPG can eliminate wind curtailment by following the output of wind energy in real time.

Introducing Smart Power Generation

SPG could bring significant benefits to China’s power system. The technology that underpins SPG is modular power based on internal combustion engines (ICE), capable of balancing variable renewable energy by starting in less than one minute and reaching full load in less than five minutes. Used in partnership with traditional coal and gas power plants, operated with their highest efficiency at baseload, SPG is not only proven to balance electricity systems with a high penetration of renewables with great reliability, but also at a cost that will save money for the consumers. 

 In Figure 3 the “Current situation” shows business-as-usual in China, including wind, coal-fired power plants and CCGT plants. In this scenario, coal-fired power plants must continue to run in the colder north in winter to supply the district heating that keeps households and industries warm. As the coal plants keep running, excess wind energy is transmitted to the south, but on arrival at the load centres CCGT plants can’t ramp up and down quickly enough to balance the variable output. Essentially, power transmission does not add any flexibility to the system. At the load centres in the south, CCGT plants have to run to provide heat, but can only operate within a loading range of 50% to 100% because of the considerable time and cost associated with stops and starts. There’s no flexible thermal generation and, as a result, the only option is to get flexibility from windmills by curtailing their generation, which results in costs, loss of free energy, and reduced opportunities to limit emissions. 


In contrast, the “SPG scenario” proposes the replacement of CCGT plants in China’s load centres with SPG, which can stop and start almost instantly to follow the load from wind farms in the north. This means the SPG plants could provide fast and flexible power when the wind is not blowing, and cease operations again when wind becomes available once more. Additionally, SPG in a CHP (combined heat and power) configuration can replace the heat production of CCGT plants, and in doing so deliver heat more efficiently and flexibly. This is possible through the use of an accumulator, which is a hot water storage tank dimensioned to the size and needs of the district heating network. Accumulators perform best in systems with a high penetration of variable renewable energy, enabling the SPG plant to run on full power when wind power is not available, while simultaneously storing heat. This heat is discharged when wind power becomes available again, promoting the balancing of intermittent generation while also supporting the heat requirements of district heating. The combination of SPG and heat storage enables plants in load centres to operate a load of between 0–100% based on demand, which means the thermal fleet can provide enough flexibility to optimise wind power.

In power systems with a high penetration of variable renewable energy, the 0–100% load range provided by SPG can make a significant difference to the power system balance. This is demonstrated in Figure 4, which compares China’s typical daily dispatch with either CCGT or SPG. The graph on the left demonstrates the resulting wind curtailment, when only coal and CCGT generation are used, where these inflexible sources already run at their minimum stable loads of 50% at night and are unable to reduce output any further to integrate wind power. 

 As demonstrated in the left graph, when CCGT plants are replaced with SPG, all available wind generation can be accommodated at night by shutting down SPG. During the day when wind generation cannot meet peak demand, SPG is started up to provide power.

Conclusion: How to enable SPG for integrating wind power

While there are no doubts about SPG’s ability to balance the grid and prevent wind curtailment, questions remain over its economic viability on project level. Specifically, the lack of market-based pricing means that China, unlike Europe, US and Australia, does not price electricity by the hour or even five-minute intervals that reflect demand and variable renewable generation. Instead, for those wishing to develop a power plant in China, the price of the electricity is constant and fixed when they apply for planning permission. This means that there is only one price for the entire lifecycle of the plant. Furthermore, grid companies dedicate running hours more or less equally to all power plants without taking into account the age, efficiency or emissions. That is not the case in the countries that have introduced electricity markets where power plants are dispatched reflecting their real generation cost.

China recognises how serious an issue wind curtailment is. The National People’s Congress has indicated that it will pursue a market-based pricing structure to support the country’s emerging decarbonised energy system (Chinese Communist Party’s Central Committee and the State Council 2015). In order to support technologies such as SPG, the electricity market must be designed to cause sufficient price volatility that offers incentives to invest in thermal generation that can balance variable renewable generation.

The Wärtsilä white paper argues that policies that support agile thermal generation would cement the case for investing in new, flexible capacity. Although China has made significant progress in decarbonising its power supply, the country cannot afford to continue curtailing its wind assets and should proceed to optimising its current and future power system. 


Bloomberg New Energy Finance (2015a). 

New Energy Outlook 2015, 23 June 2015. http://www.bloomberg.com/company/new-energy-outlook/

Bloomberg New Energy Finance (2015b). 

What lies behind Chinas wind curtailment rise, 11 August 2015.

Chinese Communist Party’s Central Committee and the State Council (2015). Advice for deepening electrical power system reform, 5 March 2015. 


Reuters (2015) China targets $300 bn power grid spend over 2015–20, 1 September 2015. 



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