The Transmission and Distribution Equipment Market is facing a critical turning point, driven by four major trends: transformation, upgrading, intelligentization, and integration. In addition, the industry is also moving toward completeness and overseas expansion. With the continuous development of China's rural power grid, UHV (Ultra High Voltage), and UHV DC transmission projects, the power transmission and distribution equipment sector has experienced rapid growth. Although the pace of grid investment may not return to previous high-growth levels in the near future, the need for further modernization remains urgent.
According to the State Grid’s 2010 plan, the "12th Five-Year Plan" marked the comprehensive construction phase of China's smart grid. Over the past decade, the push for smart grid development has ensured steady growth in the power transmission and distribution industry, with expectations of continued stability up to 2015.
In 2012, Roland Berger Management Consulting released a report titled "Trends in Global and China Power Transmission and Distribution Equipment Manufacturing Industry," which predicted that the global market would grow steadily at a rate of 4% over the next five years. By 2015, China’s power transmission and distribution market was expected to reach nearly 320 billion yuan, entering a crucial phase of intelligentization, integration, and overseas transformation.
From 2005 to 2009, China’s transmission and distribution industry saw an average annual compound growth rate of over 20% due to active government investment in grid construction. However, after 2010, equipment prices dropped significantly, and the scale of centralized tenders decreased, leading to a slower growth rate. Despite this, both State Grid and China Southern Power Grid have increased their focus on distribution network and intelligent grid construction.
State Grid announced a massive 30 billion yuan investment plan over eight years during its 2013 mid-year meeting, providing strong financial support for grid modernization. Meanwhile, China Southern Power Grid planned to invest 227.9 billion yuan in rural distribution networks during the “12th Five-Year Plan,†with 155 billion yuan remaining for 2013–2015, representing a 33.3% increase compared to 2012.
China’s power transmission and distribution industry still lags behind international standards in technical design, system optimization, and structural innovation. The market is filled with similar products, high costs, low concentration, and weak brand recognition.
As demand rises in Asia, the Middle East, Africa, and Latin America, the global power transmission and distribution market continues to expand. Secondary equipment is growing faster than primary equipment, making these regions highly attractive. Over the next decade, smart grids will shape the direction of grid construction, leading to increased integration, mergers, and acquisitions.
With the advancement of UHV and smart grid technologies, especially in distribution automation, China’s transmission and distribution equipment market is expected to follow four key trends: intelligence, integration, complete systems, and overseas expansion. Companies must enhance innovation, build strong brands, and tap into global markets.
Looking ahead, smart grids will bring primary and secondary equipment closer together. The industry is shifting from standalone products to integrated solutions, increasing demand for EPC (Engineering, Procurement, and Construction) services. As domestic overcapacity grows, overseas expansion becomes essential.
An example of this trend is the strategic alliance between China Xidian and General Electric. Through this partnership, China Xidian leverages GE’s advanced technology in secondary equipment to improve overall system solutions. Together, they aim to exploit global markets using their combined brand strength and sales channels.
Despite a slight decline in 2012, with total grid investment reaching 369.3 billion yuan—similar to 2011—the pace of growth remains below the projected 501 billion yuan per year outlined in the “12th Five-Year Plan.†With China’s economy undergoing structural adjustments, grid investment is unlikely to return to high-speed growth soon. Therefore, transformation and upgrading are essential for companies to find new market opportunities.
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