During the “15th Five-Year Plan” period, annual investment in China’s power grid is projected to reach approximately 1 trillion yuan. This figure will not only set a historic record but also signifies that grid construction will proceed with unprecedented intensity, directly benefiting companies across the power equipment industry chain.
An era of massive, unprecedented investment in the power grid is unfolding.
Recently, the State Grid Corporation of China (State Grid)—the world’s largest power grid enterprise—raised its investment targets once again, pushing the scale of grid investment to a new all-time high.
On January 15, State Grid announced on its official website that its fixed-asset investment during the “15th Five-Year Plan” period is expected to reach 4 trillion yuan, a 40% increase over the investment made during the “14th Five-Year Plan” period.
Based on this 4-trillion-yuan estimate, State Grid’s average annual investment during the “15th Five-Year Plan” period will exceed 800 billion yuan—significantly higher than in the previous two five-year planning cycles. Meanwhile, analysts at Galaxy Securities predict that investment by the China Southern Power Grid (CSG) could reach approximately 1 trillion yuan during the same period; combined, this brings China’s total annual grid investment to around 1 trillion yuan.
Regarding investment priorities, State Grid stated that during the “15th Five-Year Plan” period, it aims to achieve an average annual increase of approximately 200 million kilowatts in installed wind and solar capacity within its service areas. It also targets raising the share of non-fossil energy consumption to 25% and the proportion of electricity in terminal energy consumption to 35%, thereby supporting the goal of peaking carbon emissions across society.
NO.1 Driven by Policy Tailwinds: Investment by the Two Major Grid Operators Continues to Ramp Up
Energy is the “lifeblood” of economic and social operations, while the power grid serves as the “major arteries” and “capillaries” for energy distribution. As the hub connecting power generation and consumption, the grid is a core component of the power system’s operation.
Driven by favorable policies, both State Grid and China Southern Power Grid have maintained a trend of sustained growth in grid investment.
For context, State Grid’s investment totaled 2.4 trillion yuan during the “13th Five-Year Plan” period and 2.8 trillion yuan during the “14th Five-Year Plan” period.
In recent years, the pace of State Grid’s investment has accelerated significantly, repeatedly breaking records. Annual grid investment surpassed 500 billion yuan for the first time in 2022 and exceeded 600 billion yuan in 2024. For the full year of 2025, State Grid’s investment is projected to exceed 650 billion yuan for the first time. China Southern Power Grid previously announced a comprehensive push to upgrade its grid equipment on a large scale, with projected investment reaching 195.3 billion yuan between 2024 and 2027. In January 2025, the company announced a fixed-asset investment plan of 175 billion yuan for the year—an all-time high.
The steady increase in grid investment is a necessary requirement for accelerating the construction of China’s new power system. As early as September 2021, the Ninth Meeting of the Central Committee for Financial and Economic Affairs called for the “construction of a new power system with new energy as the mainstay.”
During the “14th Five-Year Plan” period, new energy has developed rapidly; installed capacity for wind and solar power surged from 530 million kilowatts in 2020 to 1.76 billion kilowatts by the end of November 2025. By 2030, the nation’s installed wind and solar capacity is expected to exceed 3 billion kilowatts. However, as the scale of new energy continues to expand rapidly, issues such as grid integration and consumption have become increasingly prominent, posing significant challenges to the safety and stability of the existing power grid.
Consequently, amidst the accelerated transition toward a new power system, the national grid layout requires further optimization and consolidation—a process that drives grid investment to continually reach new heights.
In 2024, the growth rate of investment in national grid projects surpassed that of power generation projects. Major power generation enterprises completed 1.1687 trillion yuan in investment for power generation projects (up 12.1% year-on-year), while investment in grid projects totaled 608.3 billion yuan (up 15.3% year-on-year).
This gap widened further in 2025. According to statistics on the national power industry for the first 11 months of the year released by the National Energy Administration, major power generation enterprises completed 866.5 billion yuan in investment for power generation projects (up 12.0% year-on-year), while grid project investment reached 529 billion yuan (up 18.7% year-on-year).
No. 2: In this era of massive grid investment, where are the key priorities?
On October 28, 2025, the “Proposals of the CPC Central Committee on Formulating the 15th Five-Year Plan for National Economic and Social Development” (hereinafter referred to as the “15th Five-Year Plan”) were released, providing renewed policy guidance and direction for the new energy system. Regarding power grid development, the “15th Five-Year Plan” focuses on a comprehensive transmission and distribution system: balancing local consumption with outward transmission; comprehensively enhancing the power system’s mutual support capabilities and resilience; and accelerating the construction of smart grids and microgrids.
On December 31, the National Development and Reform Commission and the National Energy Administration issued a guiding document—the “Guiding Opinions on Promoting the High-Quality Development of the Power Grid”—which explicitly calls for increased investment in the power grid to implement major national strategic deployments.
The document outlines goals for 2030, including the initial establishment of a new power grid platform—comprising a backbone grid and distribution network as the foundation, complemented by smart microgrids—and the effective enhancement of grid resource optimization capabilities. Key targets include: expanding the scale of “West-to-East Power Transmission” to over 420 million kilowatts; adding approximately 40 million kilowatts of inter-provincial power mutual support capacity; supporting a share of new energy generation reaching around 30%; achieving a capacity of 900 million kilowatts for integrating distributed new energy; and supporting the deployment of over 40 million charging infrastructure units.
As a key implementer of high-quality power grid development, the State Grid Corporation of China will focus its “15th Five-Year Plan” investments on building a new power system and deepening technological innovation, specifically across the following four areas:
First, focusing on strengthening the grid platform and building a new power system, the company aims to initially establish a new grid platform featuring synergy between the backbone grid, distribution network, and microgrids, while further consolidating the “West-to-East” and “North-to-South” energy transmission networks.
Second, regarding the backbone grid, the company will accelerate the construction of UHV (Ultra-High Voltage) DC transmission channels to boost inter-regional and inter-provincial transmission capacity by over 30% compared to the end of the “14th Five-Year Plan” period, with a focus on supporting the development and transmission of power from large-scale wind and solar bases in desert and Gobi regions, as well as large-scale hydropower bases in the southwest.
Third, at the distribution network level, the company will accelerate construction in urban, rural, and remote areas, while exploring models for “end-user supply assurance” and off-grid microgrids.
Fourth, the company will solidify digital and intelligent infrastructure, implement the “AI+” special initiative, and strengthen the digital empowerment of the power grid. Lin Boqiang, Dean of the China Institute for Studies in Energy Policy at Xiamen University, analyzes that accelerating the construction of UHVDC (Ultra-High Voltage Direct Current) transmission channels and enhancing inter-regional and inter-provincial power transmission capabilities constitute a major highlight of the State Grid’s current plan. As new energy bases are developed in regions such as the Northwest and Southwest, the demand for long-distance UHV power transmission is set to grow significantly.
At the same time, he notes that the stated goal of “initially establishing a new type of power grid platform featuring coordination among main grids, distribution networks, and microgrids” warrants attention. Given current trends, the proliferation of microgrids makes the emphasis on synergy between backbone grids, distribution networks, and smart microgrids align perfectly with the overall direction of grid development.
This 4-trillion-yuan investment initiative aims not only to precisely resolve the “generation, transmission, and utilization” bottlenecks facing wind and solar power but also to fully clear obstacles across the entire energy value chain—from production and transmission to consumption. The goal is to ensure clean electricity flows smoothly to diverse industries and truly benefits countless households.
NO.3 Massive Investment Fuels a Boom in Power Equipment
At an internal meeting in late December 2025, Zhang Zhigang, Party Secretary and Chairman of the State Grid Corporation of China, emphasized the need to “fully leverage the power grid’s role as a foundational support and an investment driver, using greater effort and more concrete measures to boost domestic demand and stabilize growth, while more effectively stimulating social investment and the development of industrial and supply chains.”
Major power grid projects typically involve massive investment scales and engage numerous upstream and downstream enterprises across the value chain, including power generation, electrical equipment manufacturing, and raw material supply. Increased grid investment means direct benefits for related companies. This substantial investment will span multiple sectors—such as grid automation equipment, power transmission and transformation equipment, distribution equipment, and cable components—and is poised to become a new engine for economic growth.
In fact, the year-on-year increase in grid investment has already acted as a direct positive catalyst for the orders and financial performance of companies across the value chain. Overall, power equipment companies closely linked to UHV and distribution network construction have seen their earnings grow steadily in recent years.
In the first three quarters of 2025, power equipment companies such as TBEA, XD Group, and Baobian Electric recorded year-on-year increases in net profit attributable to the parent company of 28%, 20%, and 73%, respectively. Jiufang Financial Research Institute indicates that, driven by the urgent need to integrate new energy sources, the approval and commencement of cross-provincial and cross-regional power transmission channels are likely to receive a policy boost early in the year; as the backbone of the new power system, the pace of project approvals for Ultra-High Voltage (UHV) infrastructure is expected to accelerate significantly.
Furthermore, the distribution network serves as the core support for distributed new energy and is a key factor in effectively improving the utilization rate of grid assets. Investment in distribution networks is likely to accelerate during the latter half of the “15th Five-Year Plan” period, with strategic focus placed on reinforcing rural grid infrastructure—such as transformer station interconnection and capacity expansion—as well as the intelligent upgrading of secondary equipment.
The power grid equipment industry in 2026 stands at the confluence of two massive trends: domestic grid investment under the “15th Five-Year Plan” and the surge in electricity demand driven by the global AI boom. In this revolution of energy and computing power that shapes humanity’s future, Chinese power grid equipment enterprises have taken center stage.