New State Grid Corporation of China Smart-Grid Project

The State Grid Corporation of China (SGCC) has connected around 86,000 premises to its smart grid so far, with a target of 100% smart-meter penetration by 2015, according to a report from Ovum analyst Julie Kunstler on the project.

Fiber is an unusual choice for smart grids. For a start, it’s more expensive than other options. Deploying a smart grid nationally with fiber would cost an estimated $2 billion. However, SGCC – one of China’s two main utility service providers – isn’t short on cash. It announced plans back in 2011 to spend $100 billion on smart-grid projects.

Ffiber does however provide far more bandwidth than smart meters really need to function which is why the SGCC has much bigger plans in the works than simply installing smart meters across the country.

This would seem to point to the possibility of SGCC’s plan to deliver Internet using the same technology. It could apply for a service provider license, or potentially lease to an incumbent like China Mobile, which currently lacks significant fixed line infrastructure, in a bid to share costs.

Certainly the idea of PUCs leveraging their infrastructure to provide Internet services is an old one. But much of the concept hinged on technologies like Power Line Communications (PLC), which has failed to catch on. And while many PUCs have deployed fiber for their own communications usage, extending it to residential areas is costly and complex. This is why there’s doubt that SGCC’s project could serve as a template for other utility companies, at least in the US.

China’s telecoms sector being as centrally managed as it is – especially when it comes to the Internet – means it’s also an open question as to whether the SGCC could get a broadband license from the MIIT in the first place.