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United States Should Learn from China’s Smart Grid Efforts

There is no way to get around this fact—China aims to modernize its energy infrastructure at home and dominate clean energy technology markets abroad. At the 2011 Smart Grid World Forum in Beijing late last month, China’s State Grid Corporation announced plans to invest $250 billion in electric power infrastructure upgrades over the next five years, of which $45 billion is earmarked for smart grid technologies. According to its three-stage plan, China will invest another $240 billion between 2016 and 2020 (including another $45 billion toward smart grid technologies) to complete the build-out of a “stronger, smarter” Chinese power grid.

When complete, this system will improve energy efficiency, lower carbon emissions, and give Chinese consumers more control over their utility bills. Chinese leaders are betting that upgrading to a smarter electricity grid will also drive technology innovation and move the country up the manufacturing value chain. The Chinese view smart grid technology as the next industrial revolution—and they want to make sure that once other countries start upgrading their own grids, they will buy most of their equipment from China.

CAP Policy Analyst Melanie Hart’s latest issue brief details why the United States should take note of China’s ambitions and step up our own smart grid efforts. We, too, need a stronger, smarter electricity grid, and in many smart grid sectors, our enterprises are already producing the best technologies. All they need is a bit more policy support at home to speed up interoperability, to drive down equipment prices, and to ensure the smart grid revolution will be a market driver not only for China but also for the United States both at home and in export markets abroad.

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