China's largest power grid operator State Grid on Monday said it plans to reduce carbon dioxide (CO2) emissions by 10.5 billion tons over the next ten years by using smart grid technologies.

This will contribute more than 20 percent to the Chinese government's goal of reducing carbon intensity, according to the company. China plans to cut carbon intensity, or the amount of CO2 released per unit of GDP, by 40 to 45 percent by 2020 compared with 2005 levels.

"State Grid will soon set up a smart grid to achieve its emission reduction target. Large-scale construction of the project will start in 2011, and the smart grid is expected to be completed by 2020," the company said in its enviromental development report.

The company will also work to improve its energy portfolio and energy efficiency, as well as bolster the development of the electric vehicle industry to achieve this target, it said.

"The proportion of clean power is expected to account for 25.2 percent of all installed power capacity connecting to State Grid in 2015. The figure will increase to 28.4 percent in 2020," said the report.

The clean power generation measures include hydropower, nuclear power, wind power, solar power, and pumped water storage power generation.

Development of the smart grid fits well with the country's future development of the energy industry, said Bai Jianhua, a researcher with the energy research institute under State Grid.

China's coal resources are mainly located in the northern part, while a large number of hydropower resources are in the southwest. However, it is the east that consumes the largest amount of electricity and had the biggest growth in power usage.

Development of the smart grid, which can send electricity a longer distance with less waste, compared with conventional power transmission technology, can solve the problem effectively, he said.

At present, construction of ultra-high voltage power transmission lines account for most of the State Grid's work. Sending electricity at voltage, as high as 1,000 kV, these lines are said to be more energy-efficient compared with conventional lines.

The company said earlier it planned to invest 100 billion yuan ($14.65 billion) for building such lines over the next three to four years.

Last year State Grid invested over 300 billion yuan in power grid construction, according to the report released on Monday.