China Galaxy Securities has released a research report stating that the State Grid Corporation of China has officially announced that its fixed asset investment during the 15th Five-Year Plan period is projected to reach 4 trillion yuan, a significant increase of 40% compared to the 14th Five-Year Plan period, with an average annual investment scale of 800 billion yuan. If combined with the investment scale of China Southern Power Grid during the same period, the total national grid investment during the 15th Five-Year Plan could approach 5 trillion yuan optimistically, with average annual investment exceeding the 1 trillion yuan mark. Overall, the State Grid will maintain a high investment intensity during the 15th Five-Year Plan. Strengthening investment and interconnection capabilities in ultra-high voltage (UHV) and backbone grid frameworks, increasing investment in urban and rural distribution network upgrades and their carrying capacity, and empowering smart grid transformation and dispatch capabilities are the core directions for future grid investments. The main views of China Galaxy Securities are as follows:
Under the dual carbon goals, the energy transformation targets on the power supply side and the rapidly increasing demand on the load side, such as from AIDC and new energy vehicles, are the core drivers for the transformation and upgrading of the power system. During the 14th Five-Year Plan period, the State Grid's planned investment was 2.4 trillion yuan, while the actual investment reached approximately 2.85 trillion yuan. During the 15th Five-Year Plan period, if calculated based on a 4 trillion yuan investment intensity, the corresponding compound annual growth rate (CAGR) would be around 6%. Optimistically, considering historical trends (from the 10th to the 14th Five-Year Plan periods, the ratio of planned investment to actual investment was approximately 1:1.25), it is predicted that grid investment during the 15th Five-Year Plan could reach 5 trillion yuan, corresponding to a CAGR of around 13%. Overall, the State Grid will maintain high investment intensity during this period.
According to the "Ten Measures for Serving High-Quality Development of New Energy" released by the State Grid, the core tasks for the grid are clearly defined as "enhancing grid resource allocation capacity and improving new energy carrying capacity," ensuring the annual integration and efficient consumption of no less than 200 million kilowatts of new energy during the 15th Five-Year Plan. Strengthening investment in UHV and backbone grids, enhancing interconnection capabilities, increasing investment in urban and rural distribution network upgrades and their carrying capacity, and empowering smart grid transformation and dispatch capabilities are the core directions for future grid investment.
Strengthening investment in UHV and the main grid to enhance resource allocation capacity is the primary task for the State Grid during the 15th Five-Year Plan. The State Grid stated that it will strive to complete the early commissioning of the 15 UHV DC projects already included in the plan, increase inter-provincial and inter-regional power transmission capacity by 35%, complete a series of power mutual assistance projects, more than double the flexible mutual assistance capacity between regions, and meet the needs for efficient large-scale configuration of new energy. Simultaneously, it will optimize the layout of regional main grid frameworks, coordinate the planning connection between power sources and the grid, match the development timeline of centralized new energy bases, and ensure efficient and optimal resource allocation.
Improving the new energy carrying capacity and increasing the access space for distributed power sources are the main goals of distribution network upgrades. The 15th Five-Year Plan will focus on addressing the shortcomings in the distribution network, building a modern, active, intelligent, and flexible distribution network, and achieving an increase in distribution network capacity of over 900 million kVA during the planning period. On one hand, it will promote the construction of demonstration projects for active distribution networks in counties and village-level microgrids, adapt to the integration of distributed new energy sources such as rural distributed photovoltaics, household wind power, and small-scale energy storage, and promote the local consumption of new energy. On the other hand, it will upgrade urban distribution networks, serve the construction of industrial green microgrids and integrated source-grid-load-storage projects in parks, fully implement the assessment criteria for distributed power source carrying capacity, and ensure the smooth grid connection of over 60 million kilowatts of new distributed new energy annually.
Promoting investment in the construction of digital platforms. Establish integrated source-grid-load-storage smart dispatch and full-process monitoring platforms for new energy, break down barriers in dispatch, trading, and consumption links, and achieve cross-provincial and cross-regional resource coordination and efficient supply-demand matching. Strengthen investment in smart dispatch and control technologies, focusing on key technologies such as accurate prediction of new energy, while simultaneously promoting the industrial application of flexible grid control and active support technologies. Tap into the potential for demand-side regulation, deploy grid facilities supporting load aggregation and virtual power plants, and enhance the system's intelligent peak shaving, frequency regulation, and voltage regulation capabilities.
Risk warnings include the risk of industry policies falling short of expectations; the risk of slower-than-expected progress in new technologies; the risk of sharp increases in raw material prices and operational difficulties for enterprises; and the risk of political instability overseas and deterioration of the trade environment.
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