Will China soon be a global power supplier?

The situation in discussion

Laos lies almost entirely within the lower Mekong river basin. And, companies in China have contracted the building of multiple large-scale hydropower dams on this river. These big dams have big drawbacks.

Leaving aside the steep social and environmental costs, Chinese-built dams on the Mekong river have left the nation of Laos with an abundance of electricity; so much that it needs a quick implementation of a profitable distribution plan. Xie Quiye, the current president of the Electric Power Planning and Engineering Institute has been given the charge of developing one.

With this responsibility being charged on Xie, he has put forth a proposal of Laos transporting its electricity to nations embarked in the entire of the continent’s south-east. According to him, being a regional power hub, not only will Laos be freed from its glut, but this initiative will also be a profitable marriage between the various power markets in the world.

However, energy and power industry analysts claim that the overburdened situation of Laos is being aggravated by additional companies stepping in to compete for more dam contracts. Will Xie’s plan stand this challenge?

Testing Xie’s concept

It’s feasibility

To be transporting electricity to the distances aimed at, at the first glance, it may not seem economical. But China’s ultra-high voltage cable (UHV) technology has enabled it to transport heavy energy loads with assured safety standards at affordable prices.

It is about a decade old technology that is capable of matching generation to consumption demands effectively and also reducing transmission losses. This was developed as a solution to the great distance between the energy resources and load centers. While hydropower was majorly generated in the west, its demand was the highest in the east. Scaling up the same technology, China expects to be able to transmit power as far as Germany.

Will it be profitable?

With China eyeing a role as the world’s major power supplier, it is interesting to analyze if the devised temporary solution can actually profit the industry in the long-run. Surprisingly, it can!

Marketresearch says that, much like the situation of the neighbors Laos and China, the entire world is faced with a situation where domestic markets are not big enough for producing regions and mega-projects in various countries face a lack of energy supplies. This means that China’s global power grid investments will come with good returns. There will be a better allocation of the power surplus.

Is there another side to this story?

China is known for its sleek moves. This initiative may be more than economic; it may be strategic. The robust commercial expansion of China-based institutions into the energy and power sector may be a signal for China trying to attain a monopoly in a sector that forms an integral part of our everyday lives.

Over the past years, Chinese companies have been noticed to invest big money overseas in projects running with mammoth forces like America and Europe. China’s push for interconnectivity is thus being questioned for its true ambitions.