Q1 grid investment exceeded 160 billion yuan, with the multiplier effect continuing to be unleashed

《Economic Information Daily》 reporters learned from the two major grid companies on April 2 that in this country’s power grid engineering construction, the pace is accelerating in the first quarter. The State Grid and China Southern Power Grid completed fixed-asset investment, increasing year over year by 37% and 49.5%, respectively, reaching a total scale of 167.45B yuan.

Institutional analysis indicates that grid investment is large in scale and long in the supply chain, and its multiplier effect continues to be released. It is recommended to pay attention to upstream and downstream companies in the industrial chain, especially ultra-high-voltage equipment manufacturers and distribution network equipment manufacturers.

On January 30, the 500 kV Ganxiang transmission and transformation project in Zhaoqing, Guangdong, began operation, boosting the region’s capacity for dispatching 2 million kW of new energy; on March 20, the 220 kV Weizhou Island cross-sea interconnection project began operation, and Weizhou Island in Beihai, Guangxi, completely ended its history of “islanded grid operation”; on March 27, the 500 kV Machang transmission and transformation project in Gui’an New Area, Guiyang, Guizhou, entered commercial operation, coming online 3 months ahead of the original schedule……

Major projects are the “stabilizing force” for economic development and an important lever for expanding effective investment. Since the beginning of this year, China Southern Power Grid has continued to accelerate its investment pace. A batch of major grid projects, such as the Zhancang DC project, the Guangzhou Tianhe Tangxia flexible DC back-to-back project, and the Yangjiang Sanshan Island offshore wind power flexible DC power transmission project, have been continuously under construction and are being advanced faster.

State Grid has also accelerated the construction of key projects, such as power transmission corridors, the power interconnection and mutual assistance projects, and pumped-storage power stations. In the first quarter, construction started on projects including the Panzhi ultra-high-voltage AC in Xix N. and the Wan-E DC flexible DC back-to-back in Anhui and Hubei. Projects including Gansu—Zhejiang and Datong—Huailai—Tianjin Nant- ultra-high-voltage and Min-Gan DC back-to-back have been comprehensively accelerated. A total of 37 pumped-storage power stations are being rushed to construction, and the installed and under-construction pumped-storage capacity exceeds 94 million kW.

With grid investment getting off to a faster start, the multiplier effect continues to be released. In the first quarter, China Southern Power Grid completed fixed-asset investment of 38.45 billion yuan, up 49.5% year over year. The cumulative tender procurement scale across the entire grid reached 78.4 billion yuan, with tender amounts for materials and construction up 25% year over year. It completed project material supply of 21.2 billion yuan, up 43% year over year. Material payments were fully settled, with cumulative payments for various types of material totaling 16.8 billion yuan, up 41% year over year.

“We use major grid projects as the driver to efficiently boost capacity upgrades of upstream and downstream enterprises, and strongly stimulate the vitality of the power industry’s supply chain development,” Zhang Li, deputy general manager of the supply chain department of Yunnan Power Grid Company, said. For example, Nanjing Electrical Equipment Insulators Co., Ltd.’s production line expanded from 1 furnace and 2 lines to 4 furnaces and 6 lines step by step; the production scale of glass insulators rose significantly, increasing by 2 times compared with the original capacity. Chongqing Jiangdian Electric Power Equipment Co., Ltd. added 5,000 square meters of raw-material yard space; its processing workshops run continuous production with two shifts around the clock, and capacity increased by 15%.

It is understood that China Southern Power Grid is expected to complete fixed-asset investment of 180 billion yuan in 2026. During the “Fifteenth Five-Year Plan” period, the investment scale will move toward the trillion-yuan mark. It is expected to drive investment in upstream and downstream industrial chains of 2 trillion yuan.

State Grid’s investment-driven effect is also significant. In the first quarter of this year, the company completed fixed-asset investment of over 129 billion yuan, up 37% year over year, driving investment of more than 250 billion yuan across its upstream and downstream industrial chain.

In terms of investment direction, green and people’s livelihood are key themes. In the first quarter, State Grid completed investment of over 10 billion yuan for new energy grid-connection projects, up more than 50% year over year. It completed distribution network investment of 56.8 billion yuan, accounting for 55% of investment in power grids at all levels.

According to the plan, during the “Fifteenth Five-Year Plan” period, State Grid Corporation’s fixed-asset investment is expected to reach 4 trillion yuan, an increase of 40% compared with the “Fourteenth Five-Year Plan” period. The core of this investment is to build a smarter and greener grid system. This will drive coordinated development across the entire industrial chain of the new power system, support roughly 200 million kW of average annual新增 installed capacity of wind and solar new energy in the operating region, and help steadily increase the share of fossil-free energy consumption to 25%.

A research report from Huafu Securities states that grid investment shows a pattern of resonance both internally and externally, with sentiment improving. Ultra-high-voltage projects are being delivered in dense clusters, the regional main grid structure is being advanced in parallel, and going overseas adds another new growth pole. A research report from Cixin Securities points out that in the first year of the “Fifteenth Five-Year Plan” period, the government work report proposed tasks such as power construction and computing power coordination. Combined with the large-scale investment plans of State Grid and China Southern Power Grid, policy measures and actual investments will be deployed together. It is recommended to pay attention to ultra-high-voltage equipment manufacturers, distribution network equipment manufacturers, and grid equipment manufacturers that are leading in export market share to overseas markets.