The Transmission and Distribution Equipment Market is at a critical crossroads, driven by four major trends: transformation, modernization, intelligentization, and integration. As China continues to expand its rural power grid infrastructure, invest in Ultra High Voltage (UHV) and UHV DC transmission projects, the power transmission and distribution industry has experienced rapid growth. While grid investment may not return to previous high-growth levels in the near future, the need for further upgrades remains urgent.
According to the State Grid's 2010 plan, the “12th Five-Year Plan†marked the comprehensive development phase of China’s smart grid. With over a decade of smart grid initiatives driving progress, the industry is expected to maintain steady growth through 2015. Similarly, a 2012 report by Roland Berger Management Consulting predicted that the global power transmission and distribution equipment manufacturing industry would grow steadily at 4% annually over the next five years. By 2015, China’s market size was projected to reach nearly 320 billion yuan, entering a crucial stage of intelligentization, integration, and overseas expansion.
From 2005 to 2009, the sector saw an annual average compound growth rate of over 20%, fueled by government investment in grid construction. However, since 2010, equipment prices have dropped significantly, and the scale of centralized tenders has shrunk, slowing the growth rate. Despite this, both State Grid and China Southern Power Grid have intensified their focus on distribution network and smart grid development.
State Grid set ambitious goals, including a 30 billion yuan investment over eight years to support grid intelligence and distribution network upgrades. Meanwhile, China Southern Power Grid planned to invest 227.9 billion yuan in rural distribution networks during the "Twelfth Five-Year Plan," with 155 billion yuan remaining from 2013 to 2015. This represents a 33.3% increase compared to 2012, with urban distribution network investments growing even faster.
While the demand for smart grids is strong, China still lags behind international standards in technical capabilities, product variety, and brand recognition. With increasing global demand in Asia, the Middle East, Africa, and Latin America, the market for power distribution equipment is growing faster than that for transmission equipment. The next decade will see smart grids as a key focus, along with trends like integration, mergers, and acquisitions.
China’s transmission and distribution industry is moving from standalone systems to integrated, complete equipment solutions. EPC (Engineering, Procurement, and Construction) demand is expected to rise significantly. As domestic markets mature, companies must look outward to tap into global opportunities.
An example of this shift is the strategic alliance between China Xidian and General Electric. Through collaboration, China Xidian leverages GE’s advanced secondary equipment technology to enhance its overall system solutions. In a market facing overcapacity, the partnership allows both companies to expand globally using their combined brand strength and sales channels.
Despite a 2012 grid investment of 369.3 billion yuan—slightly lower than the 501 billion yuan average projected in the "12th Five-Year Plan"—the industry is adapting to structural economic changes. With growth rates unlikely to rebound soon, transformation and upgrading are essential for finding new market opportunities. The future belongs to those who can innovate, integrate, and go global.
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