On January 13, the State Grid Corporation of China announced a significant milestone in its ambitious energy transmission project, stating that the ultra-high voltage direct current (UHVDC) transmission project from Qundong, Xinjiang, to Southern Anhui has delivered an impressive over 300 billion kilowatt-hours of electricityThis development is not just a technical achievement; it also marks a step forward in China's efforts to efficiently distribute renewable energy across vast distances.

The newly launched UHVDC project is part of a broader strategy by the State Grid Corporation to evolve its electricity transmission capabilities in the face of increasing demand for renewable energy amidst rapid construction of large-scale renewable energy generation basesAs reported, another significant undertaking is the Jinsha River upstream-Hubei ±800 kV UHVDC project, which has now entered the comprehensive line construction phase, with projections for completion by June of this year.

In recent years, China has unveiled multiple policies aimed at bolstering a new energy system supporting infrastructure

The investment in grid construction is also expected to exceed 600 billion yuan (approximately $90 billion) in 2024. Industry experts are optimistic about the acceleration of new ultra-high voltage projects; consequently, companies involved in this field are likely to reap substantial benefits.

As the construction of major wind and solar bases accelerates, the demand for inter-regional electricity delivery has surged, making the issue of renewable energy absorption increasingly pressingIn light of this reality, UHVDC and new power system construction have become focal points for investment by the State Grid CorporationIt is worth noting that the UHVDC project from Xinjiang to Anhui is strategically designed for the export of electricity from the region, and was developed entirely using Chinese technology and expertiseThe Changji converter station in Xinjiang connects to over 7.7 million kilowatts of renewable energy sources and has played a vital role in promoting the transformation of energy sources.

Investments in ultra-high voltage projects are characterized by significant scale, high industrial value-added potential, and extensive engagement across various fields

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This includes critical components such as converter valves, transformers, capacitors, transmission lines, and distribution equipmentChina West Electric, a comprehensive supplier of high-voltage equipment, has indicated that in 2024, their contribution will further facilitate projects like the 1000 kV UHV AC engineering in the Sichuan-Chongqing regionThe company is also witnessing substantial growth in its international business operations as project numbers consistently rise.

Furthermore, Parry Co., which is a key supplier of core components for converter valves essential in UHVDC projects, has been actively participating in the bidding processes for related UHVDC projects, signaling a strategic move to engage in overseas ventures as wellIndustry analysts believe that in the context of accelerating energy transition, 2025 is likely to witness a new surge in the approval of UHV projects.

The State Grid Corporation has disclosed plans that the total investment in electricity grid construction in 2024 will surpass 600 billion yuan, focusing on UHV AC and DC project development, enhancing the connectivity between regional grids and larger networks, and advancing digital transformation of the grid

These initiatives aim to improve the flow of electricity from large wind and photovoltaic bases in the western regions, boost the grid's capacity to withstand disaster, and ensure reliable power supply, all while enhancing public service.

Industry insiders have noted that network construction aligned with large renewable energy projects is steadily progressingEfforts to support and promote the collective development of major energy bases, which boosts long-distance electricity transmission, are projected to continue to flourish alongside UHV and supporting grid developments.

Achieving "dual carbon" goals is paramount, and energy is the frontline battle in this endeavor—the development of a new power system is a critical mechanism in this fightAs new power systems develop, the role of distribution networks evolves from merely receiving and distributing energy to actively integrating diverse sources and storing energy, thereby facilitating the absorption of distributed power sources.

According to Southern Power Grid, sizable investments in grid equipment renewal are expected to reach 195.3 billion yuan from 2024 to 2027. Given this backdrop, related publicly listed companies are expected to continue benefiting from these advancements.

On January 10, Jinzhiketech announced winning bids for projects valued at 30.877 million yuan with Hubei Provincial Electric Power Company and Southern Power Grid, showcasing their capacity in electricity transmission and distribution automation, including intelligent interface platforms and protective screens for 110kV lines

Successful execution of these projects is anticipated to have a positive impact on the company’s performance.

Moreover, Wansheng Intelligent recently disclosed it has been awarded a bid by Southern Power Grid for its second batch of metering products in 2024, with a total amount of 223 million yuan, accounting for roughly 19.94% of its audited annual revenue for 2023.

Looking ahead to December 2024, XJ Electric announced a preliminary bid win for a special tender from Southern Power Grid for flexible DC converter valves and their ancillary equipment, estimated at around 468 million yuan.

There is also a marked acceleration in the development of new energy storage technologiesIn recent years, as clean energy advances swiftly, the generation capacity for wind and solar energy in China is projected to exceed that of coal-fired generation for the first time by 2024. With the rapid rise in the share of renewable energy installations, the operational pressure on grid management has simultaneously increased due to the intrinsic intermittency and instability of renewable resources

Here, new energy storage systems emerge as vital resources for regulating the power system.

This acceleration in energy transformation has led to an imperative need for the development of new energy storage solutionsPolicies promoting top-level design continue to enhance and drive innovative demonstration applications while reinforcing industry managementAgainst this background, the new energy storage industry is expected to undergo significant growth.

As reported from regions such as Jiuquan, Dunhuang, and Wuwei in Gansu Province, local authorities are taking advantage of abundant solar thermal resources to construct “solar thermal storage +” electric stationsThese initiatives also support renewable energy companies in building shared energy storage systems on the grid side through cooperation, purchases, or leasing arrangementsAdditionally, the push for infrastructure such as uninterrupted power supply systems and charging facilities for electric vehicles is fueling the establishment of distributed energy storage projects.

At present, China is accelerating the construction of a new power system, with projections indicating that by 2024, a total of over 60 million kilowatts of new energy storage will be established, alongside continuous innovations in new storage technologies