High voltage takes center stage in this season of Hitachi Energy's Power Pulse podcast. We promise to bring you great content from the brightest minds in the business. We'll discuss challenges, opportunities, and all the hot topics any high voltage enthusiast or anyone interested in sustainability, for that matter, is sure to enjoy.
In this episode, we're going all in on China's energy transformation, where innovative technologies, massive infrastructure and forward thinking policies are driving a new era of sustainable energy. Here's a fun fact that's bound to impress: China has the largest solar capacity in the world, large enough to power a city like L.A.. To help us unpack all of this, I'm thrilled to have Bin Su, Head of Hub Business Unit North Asia at Hitachi Energy.
With years of experience in the energy field, he’s our go to expert in navigating China's bold energy landscape. Hello. Hi, Bin. Thank you so much for coming in. How are you today? Good. Very good. Good. So let's get started. First, I'd like to mention that we're just coming to the end of the year of the Dragon. You're about to celebrate Chinese New Year. Yeah. What animal is it next year? Next year is the year of the snake. The year of the snake? Are you a snake?
I am a snake. You are a Snake. Yeah. Go on. Tell us a little bit more about that. What does it mean to be a snake? Yeah. In China culture, a snake is intelligent, smart, flexible, resilient. Okay. And you're all those things? I try, I, I try to be as intelligent as I can. I'm sure you are. So shall we get stuck in? Shall we talk a little bit more about China and high voltage industry, SF6, SF6-free and everything that China's doing to become more sustainable?
So we all know China as a strong global manufacturing hub. It's known for its rapid economic development, modern infrastructure, you name it. All those good things. How has it shaped the country's energy needs? Yeah, indeed. Actually, in the last several decades, China has gone through such a rapid economic growth and that bring also a very substantial rise on the energy demand. And as of today, China's energy consumption takes 27% of the globe. Right.
But on the other side, I think it's also worth to note that over the last eight years, energy efficiency of China has also improved significantly. And according to IEA, the total energy supply per unit of GDP has decreased by 43% compared with the year of 22 with the year of 2000. This is really a substantial improvement. How has that been achieved?
I think it's a lot to do with the energy transition, which China is ongoing right now, driven by the target or by the vision of 2030, 2060 carbon neutral target. China is undergoing a massive energy transition period. And China has invested significantly into the energy transition in the last two years. If you look at the 2023, the total investment of China into energy transition reached 670 billion US dollars. And they say it’s the world's largest.
And within all the energy consumption, about 26% of the total energy consumption come from the clean energy. And this percentage increased by 11% point compared with ten years ago. And in the same period, the energy supply from the coal reduced by 12% point. I was going to ask you about that. So China is a global leader in renewable energy as you just mentioned. But coal still is quite a dominant source. Yeah. So why is there such a heavy reliance on coal? Why is it so difficult to replace?
I mean, historically China was relying heavily on coal, mainly because China has abundant source of coal, which makes it very easy to access and very cost efficient. So over the last two decades, the China has been relying on coal as the main source of energy. But things are changing. With the demand side, the electrification, more and more energy consumption are shifting from the coal to the electricity.
For example, the EV fast development, the data center, the high-speed rail, the electrification of the all the industry segments. I think today in China, the energy consumption – 28% of the energy consumption come from electricity. But there are still quite some segments which rely on coal, like the industry segment, one third from electricity, but also one third from the coal. Going forward, I believe this will change very fast.
With very high speed of electrification, the electricity will be more than 30% and will reach like 50% in the year 2050. Then on the supply side, meaning the power generation side, traditionally also we rely on coal a lot. But now, as you know, with the rapid growth of the renewable energy installation in the last ten years in China, the wind and the solar installation capacity has always been more than 40% of the total installation capacity.
Also, within 23, the renewable energy installed capacity for the first time over the thermal power capacity. Right. Yeah. And going forward, this percentage will just be growing even faster. So, Bin, if we look into the electrification process you've just mentioned, we know that SF6 is at the base of it. So historically that has been the gas that has been used to make sure the grid is reliable, to make sure that we've got electricity in our homes.
SF6 is the most potent gas when it comes to global warming potential. What progress has China made in adopting SF6-free solutions? It's a very good question. I mean, SF6 is indeed a very good gas in the high voltage switchgear industry. In the last five decades, it has been utilized so widely. In China in the last two decades, it has also put a lot of effort in reducing the usage of SF6.
For example, there is a very tight control and monitor about the usage and emission of SF6 in any of the substations. And also in China, there is, increasingly tight requirement on the SF6 leakage. Several years ago this requirement has been increased from 0.5% leakage rate to 0.1% leakage rate, which is also a big step.
And then there is another big measure which China has been taking and mainly it was taken by State Grid of China, which is the world's largest utility, is that to utilize a new gas mixture, which is instead of the pure SF6, we are using SF6 with nitrogen gas mixture. So with 30% SF6 and 70% of nitrogen. With this we can basically reduce the SF6 usage by about 50%. And this is actually – I think it's a very practical solution to reduce the usage of SF6. I made some rough calculation.
Consider the huge amount of switchgear GIS, which SGCC install every year. So only in the last two years it's about, roughly 15,000 of GIS 110 kV and 220 kV. In total, roughly 15,000 of GIS has been using this gas mixture. And if we calculate it back, this is equivalent to roughly 7,000 unit of GIS has been totally SF6-free – 7,000 units. I think this is really a tremendous achievement. So it’s 50% reduction in SF6 and nitrogen mixture – so in terms of emissions, you can do better.
There are SF6-free solutions out there, Hitachi Energy offers one of them. Would you tell us a little bit about how China is adopting the SF6-free technology? Yes, indeed. Although this SF6 and the nitrogen gas mixture is quite practical, but it's only half SF6-free. So you only take out 50% and then it will be very hard to take out the other 50%. China is taking a lot of actions to find the the best way to be totally SF6-free.
There have been a lot of investment by the government, by the power grid, to invest into the technology and the product development of SF6-free switchgear. And also in China, they are actively piloting the application of the SF6-free technology on the switchgears in the power grids. For example, Hitachi Energy has been supplying EconiQ GIS since 2002. I mean, we supply to the first EconiQ 145 kV GIS to SGCC Shanghai in 22.
And also we supplied the first EconiQ 145 kV GIS to China South Grid last year. And more than that in the last summer during the CIGRE, we also announced that we will supply China's first 420 kV EconiQ Dead Tank Breaker, which is really the first time in the transmission voltage level. It's a remarkable milestone. And even further, two months ago, we also announced that we will pilot the world first 550 Retrofill technology in one of our big power plant customers.
So retrofill, that's when you don't replace the equipment, you replace the gas within it. Exactly, exactly. We're basically, without a major site work, you just replace the SF6 with the EconiQ retrofill gas mixture. So with China being such a vast country, how does the adoption of SF6-free technology fit in with the grid expansion project, for example? Yeah, as we mentioned earlier, China is still undergoing a very fast economic development and also very fast electrification process.
And this means the power grid is becoming bigger and bigger every day. A rough number basically every year only in State Grid we install roughly 10,000 units of GIS. That's a lot of SF6 utilized every year. So I think it's really the right moment to plan the movement towards SF6-free, because taking this timing when we expand, we also utilize the SF6-free technologies and you basically take two step within one.
So if you look at the world stage, how crucial would you say China is in decarbonizing the energy sector? Oh, that's very, very critical. As we mentioned earlier, China takes about 27% of the global total energy consumption. So the decarbonization of China for sure will have a huge impact on the global decarbonization progress. And within all the different ways of decarbonization, I think the power grid in China is playing a really pivotal role. Why?
Because the role of power grid is to, on one side, connect the power generation, on the other side connect the power consumption. As we know that in China, the power generation side is increasingly more and more relying on the renewable energy, which is fluctuating and difficult to, to control.
And on the other side, the increasing electrification, more and more demand on the electricity, so the power grid has to be able to integrate the faster growing renewable energy and fulfill the faster increasing electricity demand. Only if the power grid can fulfill this task, the decarbonization of China can progress according to the plan.
Along this journey, I think the decarbonization of power grid itself is also getting more and more important and to utilize the SF6-free technology in the switchgear is one of the key measures to decarbonize the power grid itself. So could China's transition to these SF6-free technologies set new international standards for sustainable grid solutions, for example? I mean, standardization is very important to drive the development of the industry.
I remember that in the last few years, there was actually a lot of discussion within China about what should be the way forward for SF6-free. And in the autumn in 23, in China, together with CSEE, we had the industry expert meeting in Beijing, and in that meeting all the experts commonly agreed that the C4-based technology is the right way forward in China to replace SF6. And also I think China has such a huge switchgear market.
The application of the SF6-free technology will generate a huge amount of knowledge base in terms of product, in terms of operation, maintenance and so on. And this knowledge base are really valuable for the globe. And to transfer that knowledge into global standards will help a lot to push forward as a global SF6-free journey. So, Bin, we've got time for one last question – very quickly, can you tell us what you think China's energy landscape looks like for the next decade?
Yeah, let me still explain this question by supply side, the demand side and the power grid. Yeah, I think right now the renewable energy installed capacity in China is already more than the thermal power plant. And the generation based on the renewable energy is still roughly 30%. And this percentage will grow very fast with the increase the capacity of renewable energy installation. And also when the power grid is getting stronger and stronger to integrate the renewable energy.
So by 2050, this percentage may grow to like 60% or even higher. And then on the demand side, today, the electricity is about 28% of the total energy consumption. And with the fast growing electrification process, this percentage will also grow to like 50% or even more than 60%. So within this journey, the power grid will play really a increasingly important role. When the power grid become more resilient, become stronger to be able to connect to the supply and demand.
And also in the meanwhile, the power grid itself become more and more sustainable by using SF6-free technology more and more. I think the entire energy system will be much more sustainable than today. And the Chinese decarbonization journey will contribute increasingly to the global decarbonization. Well, thank you very much for coming in, Bin. It's been lovely having you and I hope to see you soon. Thank you. And that's it for today. We'll be back soon with some more great content.
But before you go, remember to give us a follow so you don't miss an episode. Thanks for tuning in. See you soon. This episode was brought to you by Hitachi Energy. Created and hosted by Bárbara Freitas-Daniels. Content and script writing by Cassandra Inay and Ivy Samuel. Guest speaker, Bin Su. Studio support by Giovanni Perrone and Natalja Arbatska. Produced and edited by Creative Chimps.