POWER August 2014 - 76

COMMENTARY
Effects of
Urbanization on
Generation in China
Zeng Ming
I
Duan Jinhui Wang Liang
Zeng Ming, Duan Jinhui, Wang Liang, Gu Shanshan
n 2013, urbanization in China reached 53.73%. Urbanization
has become an important field for national reform. On the one
hand, urbanization is effective for improving quality of life and
narrowing the urban-rural gap. On the other hand, the economic
development strategy promoted by the new Chinese government
shifts from being driven by exports to expanding domestic demand,
and urbanization becomes a significance factor in that. In
2013, the Central Economic Working Conference put forward the
requirement to pursue a new urbanization that takes an " intensive,
smart, green and low-carbon " path, which means new urbanization
will have far-reaching influence on power generation.
First, the ongoing promotion of urbanization will result in
ever-increasing energy requirements, thus providing traditional
energy supply businesses with new opportunities. Meanwhile,
the shift in population distribution poses challenges for thermal
generation businesses. Second, new urbanization emphasizes efficient
and clean utilization of energy resources, which provides
clean energy supply businesses with new opportunities.
Inluence on Thermal Generation
In China, thermal generation will still be the main generation
form for a long time. The central government has formulated new
development strategies for energy facility construction-energy
industry development together with urbanization-which will
affect the distribution of thermal power:
■ Optimization strategy for traditional thermal power distribution.
Thermal power units in China are distributed mainly near
coal mines and load centers now. In the future, industrialization
and urbanization will proceed intensively and will be characterized
by the dense distribution of industry, population, cities,
and towns. Therefore, the optimal distribution of thermal power
should consider energy resources, planning energy industry development
together with urbanization distribution according
to the rule of maximizing comprehensive benefits while at the
same time guaranteeing the urban energy supply.
■ Coordinated planning of wind, solar, and thermal power sources.
China has proposed the planning of comprehensive energy bases
and city clusters. Among the five bases, four are also located
in the key position of urban belts. In addition, according to the
planning target for energy bases, half of their capacity will be
delivered outside the urban area. Therefore, site selection for
thermal power should consider both energy resources and urbanization
distribution to accelerate the coordinated dispatching
of wind power, solar power, and hydropower.
Inluence on Distributed Generation
From now until 2020, urban development planning will be combined
with land reform, and new development zones of dozens of square
kilometers will be constructed. Under this trend, urban planning will
pay more attention to the coordination between public facilities
and resource supplies such as water, electricity, and fuel gas:
76
■ Distributed gas-fired generation. Currently, high-efficiency gas
generation accounts for a low share among total energy enduse
utilization in China, while low-efficiency coal is in just
the opposite position. Therefore, the utilization of natural gas
should be enhanced urgently.
■ Distributed generation with renewable energy. The urbanization
trend in China includes establishing dominant towns in
rural areas. Because of the low energy density of distributed
renewable energy, its capacity per unit area is relatively low
compared with traditional fossil energy. Therefore, it is appropriate
for servicing small-scale houses and commercial buildings
in these dominant towns.
Inluence on New Energy Generation
Green is the new urbanization's character, so new, low-carbon resources
should be explored to meet increasing demand for electricity:
■ Explore shale gas generation. Shale gas is yet in the early stage
in China. However, in light of the similar distribution of shale gas
resources and load centers, local generation from shale gas will
gradually replace coal-fired units. In addition, the Northwest has
abundant intermittent renewable energy, so sufficient local shale
gas can meet its increasing peak-shaving requirements.
■ Develop inland nuclear power. Nuclear power stations in China
are distributed in southeastern coastal areas. In the future,
with new urban planning, they should be near load centers to
meet the ever-increasing electricity demand.
■ Add environment-friendly generation. Urbanization will promote
establishing dominant towns among rural areas based on
agriculture. Therefore, generation through refuse incineration
(waste to energy) and biomass will gain great importance.
In addition, although large amounts of private capital have
entered the power industry since the opening of the generation
market in 2003, because of the intrinsic character of the stateowned
monopoly, most generation business is still owned by the
state. Private companies can hardly undertake large generation
projects due to capital shortages. Therefore, during the transition
stage, they should comprehensively consider their geographic
location, capital volume, and technical advantages, thus
maximizing advantages and minimizing disadvantages.
New urbanization in China is rapidly expanding, so generation
companies should assess the situation and identify their future strategy.
Generation companies worldwide should choose a suitable direction
for transition during urbanization, based on each country's
urban planning, industrial policy, and resource endowment.■
-Zeng Ming is a professor at North China Electric Power University
(NCEPU) and a senior consultant to the National Development and
Reform Commission, National Energy Administration, State Grid
Corp. of China, and China Huaneng Group. Duan Jinhui, Wang Liang,
and Gu Shanshan are doctoral students at NCEPU.
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POWER August 2014

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