New 'internet plus' strategy for energy puts emphasis on innovative development and industry integration

Premier Li Keqiang has emphasized many times that securing energy supplies is essential for China's development, and he has called for the country to promote an Internet Plus energy strategy.

"Internet Plus Smart Energy" aims to integrate the internet, cloud computing, big data and the internet of things with energy production, transmission, storage and consumption.

The State Council, China's Cabinet, places great importance on the innovative development of the energy industry, represented by what is known as the "energy internet".

In February, the National Development and Reform Commission, the country's top economic planner, published the Internet Plus Smart Energy Action Plan, in which the government outlined key tasks for the development of an energy internet.

It includes making energy infrastructure smart, building a network of multi-energy microgrids and developing big-data services for the energy industry.

Opportunities to industry

Since its announcement, the action plan has attracted many investors who are eager to develop the smart-energy sector, said Li Ye, chief economic manager of the National Energy Administration during a news conference held by the Information Office of the State Council on June 24.

"We expect the energy internet industry will attract investment of at least 40 billion yuan ($6.04 billion) by the end of this year," he said.

"The NDRC plans to invest another 300 million to 400 million yuan in a special fund to support certain key projects."

For instance, based on a green energy internet trading platform, energy producers and consumers will be able to sell and buy electricity generated from wind, solar and hydropower directly in the future.

The increasing cooperation between internet giants and auto manufacturers on developing electronic vehicles is also a demonstration of the energy internet, Li said.

The action plan says the government will encourage the building of charging stations for electric vehicles based on renewable energy in cities and tourist spots, and along expressways.

"It not only brings opportunities to the renewable-energy industry but also the traditional energy sectors of coal, natural gas and oil," Li said.

However, the energy internet industry does not just rely on government policy, said Gao Feng, deputy director of the Energy Internet Research Institute at Tsinghua University.

"Seeing the market potential and possible returns, companies are willing to invest in this sector," he said. For instance, the Power Construction Corp of China is cooperating with the institute on an energy internet project that uses hydropower to make hydrogen for industrial use.

"The marginal cost is near zero while the product is widely-used, which means the market is big," Gao said.

A big part of the money invested in the energy internet will go to applying big data in the energy sector, Gao said.

"In Guangdong province and Chongqing municipality, some companies are investing in smart meters that can collect customer readings," he said. "Analyzing these readings will be valuable for many other businesses."

Public participation

The energy internet will change the relationship between energy providers and users.

The biggest change is that every energy consumer can become an energy seller by trading extra electricity or other forms of energy through the internet.

Li, the chief economic manager, said there's no doubt that distributed energy will see growing investment in the coming years.

"There are countless ways to bring internet thinking into the energy industry," he said.

Besides selling extra electricity to the grid, consumers can also trade individually with each other.

"It will bring convenience to residents and be beneficial to the environment," he said. "Thinking from the consumer side will make a big difference in the energy sector."

Han Xiaoping, chief information officer of China Energy Net Consulting Co, said the fundamental goal of the energy internet is to bring in public participation.

"The flattening of the energy network can promote reform of energy production and consumption, which will be beneficial for raising the utilization efficiency and for cutting pollution," he said.

The next step

According to the plan, the central government plans to launch a number of pilot and demonstration projects from 2016 to 2018 and promote the mature ones between 2019 and 2025.

The energy internet is an important element of "Made in China 2025". It is also beneficial for China's technology standards going global.

At present, the National Energy Administration is working on building a unified and open system of technology standards.

From 2019 to 2025, the country will establish an integrated system of technologies and standards, and promote its internationalization.