China State Grid to sign MOU with Pakistan

Electricity agreement will have positive effects: experts

Experts said a reported electricity export plan between China and Pakistan would be difficult, but technically possible, and beneficial to both countries if it was completed.

China and Pakistan will sign a memorandum of understanding (MOU) concerning the export of 4,000 megawatts (MW) of electricity to Pakistan in a couple of days, the Pakistani Dawn newspaper reported Tuesday.

An official Pakistani delegation had gone to Beijing to discuss a draft MOU on the matter with their counterparts at the State Grid Corporation of China (SGCC), Dawn reported, citing an unnamed official from the country's ministry for water and power.

A staff member from the PR department of SGCC declined to comment on the report when reached by the Global Times.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said ultra-high-voltage (UHV) power transmission technology might be involved, as technology has enabled operators to dispatch electricity from one place to another in a grid network and over a long distance nowadays.

"China faces a relative energy glut, so it has the desire to export some of its electricity. It is just like exporting goods such as garments and slippers and the price for electricity in countries such as Pakistan and India is very good," Lin said.

He noted that such a relative surplus is strengthened by the new energy sources such as nuclear power stations that China has been gradually adding to its power generation fleet.

SGCC has a record of striking a slew of investment deals globally, as its chairman Liu Zhenya envisages a globally connected energy network that uses different kinds of energy and is transmitted via Smart Grid and UHV technologies.

The company had invested in the power grid of the Philippines and Italian energy grid holding company CDP Reti.

A SGCC official was cited by a Reuters report in August 2014 as saying the SGCC projects abroad typically yield high single-digit to double-digit returns, compared with low single-digit returns at home.

In February 2014, a Chinese-led consortium backed by the SGCC won a contract to build a UHV line transmitting hydropower from the Belo Monte Dam, one of Brazil's largest hydroelectric projects. The deal was hailed as a milestone in China's exporting of electricity transmission technology.

Lan Jianxue, an associate research fellow with the China Institute of International Studies, said the rapidly developing textile industry in Pakistan in recent years, as well as emerging industries such as processing trade, and a swelling middle class on top of a large population base has created a strong demand for electricity in Pakistan.

"The infrastructure in Pakistan lacks behind this growing demand. Also, China could benefit economically from having a neighboring economy that is growing," Lan told the Global Times on Wednesday.

"China has rich experience in building grid networks in high-altitude, plateau regions," Lin said, citing existing networks in Northwest China's Xinjiang Uyghur Autonomous Region and Southwest China's Tibet Autonomous Region.

However, the route is a key issue, as Pakistan is a long way from China, Lin noted.

"If Pakistan is willing to see such a project done, I think that despite its difficulty, the project is feasible," Lin said.

According to the Dawn report, legal specialists and transmission experts from the Pakistani side have proposed some changes to the draft, which will be reviewed on a bilateral cooperation meeting held in Beijing.

The report cited Water and Power Minister Khwaja Asif as hinting on Monday that the project would be ready by 2018.

To solve its energy shortage, the Pakistani government has announced it would add 10,400 MW to the national grid by 2017, via a slew of projects including the building of three coal-based power plants to generate 3,300 MW of electricity, according to media reports.