Smart grid technology and upgrading distribution network will facilitate renewable energy expansion
HONG KONG, May 18, 2023 /PRNewswire/ -- KPMG's report Smarter Grids: Powering decarbonisation through technology investment, analyses how smart grid technology (an electricity network that uses digital and other advanced technologies to efficiently manage the generation, transmission and consumption of electricity) enhances the operational efficiency of the grid and better integrates renewable energy (RE). The report examines the policies that support smart grids implementation and the investments incentivised by these enabling policies. The report also assesses the global smart grid outlook of China, the UK, and the US, the three key markets of the global investment in electricity grids.
Wei Lin, Partner, Head of Environmental, Social and Governance, KPMG China, says, "Energy independence and the need to decarbonize the economy by progressively moving away from fossil fuels reliance is a key policy and business opportunity driver. Many countries not only have strategic roadmaps for expanding renewable energy generation, but they are also charting pathways for alternate energy options including green hydrogen and energy storage. These changes have contributed to the renewed urgency to strengthen the electricity grid."
Reliable electricity is critical to economic growth, especially when the world is accelerating its transformation to the digital economy. China generated over 8,500 TWh of electricity last year, accounting for one-third of global output. In line with its national Carbon Neutrality commitment, China has significantly grown its capacity to generate and transmit RE. This growth has been steady and is projected to continue as RE continues to attract even more investment. China's investments in its transmission and distribution network support the transfer of higher amounts of green energy across provinces and regions, while mitigating transmission loss. As a result, considerably less power is required to meet growing electrification demands.
Angus Choi, Partner, ESG Advisory, KPMG China, says, "Smart grid technology enhances the operational efficiency of the grid and its ability to transmit energy with minimal loss. When developed and scaled, smart grids help address four main challenges facing the power sector: modernisation, decarbonisation, digitisation and electrification."
Ebele Angela Onyeabo, Associate Director, Climate and sustainability, KPMG China says, "Sustainable finance is increasingly targeting the clean technologies of the future. Banks, asset managers, institutional investors, utilities and corporates are in many ways exploring opportunities for decarbonising their portfolio as well as their processes. Investing in and integrating smart grids technology offers a clear path to substantial carbon reduction critical to energy transition."
Smartening the grid has benefited from access to green finance. China's green finance market has resulted in greater access to green bonds and other financial tools, which is critical for enabling China to achieve its carbon neutrality goals through energy efficiency.
According to KPMG's 2022 CEO Outlook, based on a survey of over 1,300 global CEOs, long term digital transformation and ESG/sustainability make up two of the top four trends impacting businesses globally. Smart grids straddle these two issues in a way that impacts stakeholders across a number of sectors.
About KPMG China
KPMG China has offices located in 31 cities with over 15,000 partners and staff, in Beijing, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Nantong, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Taiyuan, Tianjin, Wuhan, Wuxi, Xiamen, Xi'an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
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In 1992, KPMG became the first international accounting network to be granted a joint venture licence in the Chinese Mainland. KPMG was also the first among the Big Four in the Chinese Mainland to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG's appointment for multidisciplinary services (including audit, tax and advisory) by some of China's most prestigious companies.