The Zhitong Finance App learned that CITIC Securities released a research report saying that the State Grid proposed the construction of a strong digital intelligent power grid during the annual work conference, which mainly includes various aspects such as UHV and flexible construction, power distribution capacity expansion, and intelligent and digital construction. Among them, the construction of a new power system centered on new energy sources, especially the construction of the Shagahuang Scenic Base and offshore wind power, requires UHV and flexible DC lines; however, the occurrence of extreme weather, the introduction of large-scale distributed photovoltaics, and the increase in NEV ownership places higher demands on the distribution network and electricity consumption side. The bank judged that investment in power grids is steady, moderate and positive, and that structured growth may be more obvious. At the same time, it also takes into account that some power equipment companies have strong ability to go overseas. It is proposed to lay out three main lines: domestic UHV and flexible construction, power distribution capacity expansion and digital intelligence construction, and overseas power equipment market layout.
The main views of CITIC Securities are as follows:
Build a strong digital intelligent power grid and dig deeper around “44345.”
According to a report by the State Grid News, the State Grid 2024 working conference was held in Beijing on January 12. Xin Baoan, chairman and party secretary of the State Grid, pointed out that to speed up the construction of a new power grid and build a strong digitally intelligent power grid, it is necessary to grasp the main principles of the “44345” theme — “four major foundations,” “four major characteristics,” “three major functions,” and “five major values.”
1) “Four major foundations”: UHV and ultra-high voltage as the backbone grid, strong support from power grids at all levels, driven by modern information technology such as the “Big Cloud Smart Chain”, and digital intelligent greening as the path;
2) “Four major characteristics”: strong climate elasticity, strong safety and toughness, strong adjustment flexibility, and strong guarantee ability;
3) “Three major connotations”: morphologically reflected in AC/DC hybrid, organic connection of various power grid forms such as large power grids, distribution grids, and microgrids, and centralized and distributed energy systems complement each other; technically, it is reflected in the deep integration of digital technology such as artificial intelligence, edge computing, digital twins, blockchain, security protection, advanced information and communication technology, control technology, and flexible DC, renewable energy friendly access, and source network load storage coordination control; the elements are reflected in the deep integration of multiple energy and power technologies such as power flow, business flow, data flow, and value flow., multi-agent collaborative interaction, flexible interconnection over a wide range , New energy wide-area spatio-temporal complementarity, multi-type power supply energy mutual support;
4) “Four major functions”: digital intelligence to enable efficiency, power computing power integration, coordinated development of main distribution, strong and reliable structure;
5) “Five major values”: Achieve dynamic sensitivity and real-time insight into the entire chain of power grids, dynamic optimization of network structures, accurate control of production and operation, and intelligent adjustment of user behavior, highlighting rapid response, disaster prevention and disaster relief, strong autonomy, self-healing and self-healing capabilities, supporting large-scale high-ratio grid connection of source network load storage, and large-scale high-ratio grid connection of new energy sources to meet the diversified access of interactive actors such as electric vehicles, microgrids, new energy storage, virtual power plants, etc., to drive the advanced foundation of the energy and power industry, modernize the industrial chain, and strengthen digital intelligence The power grid is becoming stronger as a new type of grid Innovative power and functional value are fully reflected.
The bank discovered that around the “44345” theme, power grids support the future development of new power systems, are further interpreted as the inclusion of building a strong digital power grid — that is, on the basis of building a strong grid body, exploring the integration scenarios of power grids and current information technology, coordinating all aspects of source grid load storage to jointly cope with pressures such as system fluctuations and climatic and environmental disturbances, so as to achieve the digital intelligence development and flexible and strong operation of power grids with the support of emerging technologies.
Looking forward to the State Grid 2024: seeking progress through stability, promoting stability through progress, and breaking first.
The State Grid Annual Work Conference called for continuing to ensure a reliable supply of electricity as the primary responsibility in 2024 to fully meet the electricity needs of economic and social development. The above statement is also consistent with the bank's judgment: the increase in electricity consumption is the core driving force for power system construction, and China's power system maintains a moderately advanced construction schedule while considering the expected increase in electricity consumption. At the same time, the State Grid emphasizes key tasks such as ensuring the safety of large power grids, promoting the construction of strong digital and intelligent power grids (based on key engineering construction, distribution grid resilience, distributed photovoltaic development, carbon management system construction, digital intelligent support), promoting “one place, one chain” construction to accelerate self-reliance in science and technology, and promoting high-quality development of the “Four Wings” business (developing and expanding strategic emerging industries, steadily expanding international business, etc.). The bank believes that this conference has set the tone for the overall idea of power grid construction for the next period, which is to steadily advance the deep transformation of power grids in combination with digital intelligence and strong operation, and at the same time ensure the continuous development of new power systems through “steady and progressive” investment plans and construction implementation.
Investment in power grids continues to improve, and structured growth may become more obvious. It is recommended to focus on UHV and flexible DC, power distribution capacity expansion, and digital intelligence construction.
The bank maintains the judgment that the amount of completed grid infrastructure investment increased by 5% + year on year in 2024. At the same time, the structured performance of power grid investment is expected to be more balanced, including UHV and flexibility, power distribution capacity expansion, and digital intelligence. Among them, the main grid construction (ultra-high voltage, flexible DC), which is based on large-scale energy base transportation as the core, is mainly to support the construction of a new power system centered on new energy sources, especially power transmission to meet the Shagaohuang scenery base and offshore wind power base; distribution electricity investment (expansion, intelligence, digitalization) serving distributed new energy grid-connected and NEV charging needs is expected to grow collaboratively, mainly to meet large-scale distributed photovoltaics access and the continuous increase in charging capacity of new energy vehicles. On a year-round basis, the bank recommended continuing to pay attention to the pace of implementation, commencement and tendering of large-scale domestic transmission projects, power distribution side expansion, and demand for intelligent equipment and digital procurement. In addition, the bank also suggests paying attention to the continued overseas order performance of high-quality Chinese power equipment companies going overseas.
investment strategy
It is recommended to continue to pay attention to power equipment companies, based on the steady progress of the construction of strong domestic digital intelligence power grids, and grid investment continues to improve; overseas demand continues to be released, and an opportunity period for Chinese companies to gain strength in global competition. The bank's proposal focuses on the three main lines of domestic UHV and flexible construction, intelligent and digital electricity distribution, and overseas markets.
Risk Factors:
Investment in power grids fell short of expectations; the pace of UHV approval and bidding fell short of expectations; demand for intelligent and digitized power grids fell short of expectations; overseas order performance for power equipment was strong; and prices of bulk raw materials fluctuated sharply.