CICC: Overseas Power Supply and Demand Contradictions Are Prominent, Chinese Manufacturers Welcome Accelerated Overseas Expansion Window

China International Capital Corporation Research Report states that overseas data centers are facing a “power search” dilemma, with queue times in some congested regions of Europe and America reaching over 7 years. Grid capacity is now determining capital flows, with large developers focusing on Northern Europe, Southern Europe, and emerging markets. Meanwhile, in the US and Europe FLAP-D markets, some regions are shifting from optional to mandatory self-supplied power, exploring various new power supply solutions simultaneously. The supply and demand imbalance abroad is prominent, and Chinese manufacturers are entering a rapid export window, capturing high-elasticity market opportunities.

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CICC | AI “Power Exploration” (Thirteen): Solving the Overseas Data Center “Power Search” Problem

CICC Research

Overseas data centers are facing a “power search” dilemma, with queue times in some congested regions of Europe and America reaching over 7 years. We observe that grid capacity is increasingly influencing capital flows, with large developers focusing on Northern Europe, Southern Europe, and emerging markets. At the same time, in the US and Europe FLAP-D markets, some regions are shifting from optional to mandatory self-supplied power, exploring various new power supply solutions simultaneously. The supply and demand imbalance abroad is prominent, and Chinese manufacturers are entering a fast-track export window, seizing high-elasticity market opportunities.

Summary

Power Supply Side: On-site power supply is the trend, with autonomous gas turbines breaking through. Gas turbines are the mainstream solution for on-site power, with global orders and prices rising by 2025. Overseas leading manufacturers are experiencing tight supply, with lead times exceeding three years, making it difficult to meet rapid power needs, creating market breakthrough opportunities for Chinese OEMs. Leading manufacturer Dongfang Electric’s G50 autonomous gas turbine achieved its first export last year. Additionally, SOFC, SMR, geothermal systems, and other forms each have their own characteristics. We believe that combining “self-supply + grid” is a highly feasible future direction.

Grid Side: Global power cycle, China’s transformer exports see high growth. As AIDC scales up to hundreds of megawatts, connection points increase to high voltage levels requiring dedicated substations. Long-standing issues like slow approval processes have constrained effective transmission development in Europe and America, leading to a supply gap in core equipment transformers. In 2025, China’s transformer exports will hit a new high. We are optimistic that Chinese companies with complete industrial chains and rapid delivery capabilities will continue to expand their market share.

Data Center Side: SST is expected to help AIDC achieve grid-friendly operation. On one hand, SST adapts to power calculation and coordination scenarios, working with energy storage systems to provide auxiliary services like peak shaving and frequency regulation, enabling flexible grid interaction. On the other hand, relying on power electronics for rapid response and active control, SST can mitigate the impact of AI model training on the grid. We believe Chinese manufacturers with strong grid understanding and market channels are likely to stand out.

Risks

AIDC development underperforms expectations, changes in international trade policies, and shifts in new technological routes.

(Source: First Financial)