China Power Grid System Industry

China Smart Grid Network Market Analysis

The China Smart Grid Network Market is expected to register a CAGR of 14.32% during the forecast period.

The outbreak of COVID-19 had a negative effect on the market. Currently, the market has reached pre-pandemic levels.

• Things like increased spending on ultra-high voltage projects and renewable energy are likely to drive the market during the forecast period.
• But things like high installation costs and worries about the environment related to installing fossil fuel power plants are likely to slow market growth over the next few years.
• Substations are one of the most critical parts of an electrical energy system, with many costly pieces of equipment and operations. Smart automation techniques are being used more and more in these substations instead of manually processing data. This makes the automated system run quickly and accurately and ensures a reliable electricity network and feedback data. During the forecast period, market players will have a chance to take advantage of China's growing need for electricity and growing focus on clean energy, which will lead to new-generation projects and the repair of old transmission systems.

China Smart Grid Network Market Trends

Increasing Investment Plans and Upcoming Smart Grid Projects Driving the Market Demand

• China is the world's largest market for power transmission and distribution (T&D) and is also poised to become a significant consumer of smart grid technology, supported by its policy to reduce carbon emissions and commitment to green development.
• According to the National Energy Administration (NEA), the total power use in China was approximately 8.31 trillion kilowatt-hours (kWh) in 2021. Specifically, the power consumed by the primary, secondary, and tertiary industries climbed 16.4%, 9.1%, and 17.8% year-on-year, respectively.
• According to the State Grid Corporation of China (SGCC), the largest state-owned utility corporation, China's energy demand is expected to exceed 10 Petawatt hours (PWh) in 2030, representing a considerable challenge to power transmission that the country needs to address. The transmission network growth is parallel to the power generation growth to develop the infrastructure and support the high-power generation.
• Also, State Grid Corporation of China has rolled out the 'Global Energy Internet' concept, based on having smart grid connections to an ultra-high voltage power grid that would potentially deliver clean energy. This, in turn, is expected to drive the smart grid network market in the country during the forecast period.
• According to China Electronics Corporation (CEC), in 2021, the total investments in the electric power grid and supply projects reached more than CNY 1,048 billion in China, an increase from around CNY 1,018 billion in 2020.
• Thus, with the investments in the electricity infrastructure, the demand for smart grid networks is expected to increase in China during the forecast period.

Substation Automation Holds the Major Market Share

• Substations are one of the most critical parts of an electrical energy system with many costly equipment and operations. These substations are increasingly being used with smart automation techniques instead of manual data processing, leading to fast and accurate operation of the resulting automated system and guarantees a reliable electricity network and feedback data.
• Further, the smart grid system constitutes a fully automated monitoring and controlling system designed for generation, transmission, and distribution substations to track the situation of equipment and unexpected faults. The advanced platform digitizes various manual operations into a single resilient structure. It works based on a mature SCADA platform and several subsidiary objects like Industrial Ethernet Switch to fully operate a substation.
• The digitalization of substation provides various benefits such as improving overall substation management process, facilitation monitoring, and protection processes maximizing failure prevention by fast and precise monitoring, optimizing substation operational performance, and access to substations from the control center and web application.
• Moreover, according to China Electricity Council, the smart grid's accumulated investment is expected to reach CNY 4 trillion. Chinese companies have gained UHV transmission and smart substations experiences over the years, encouraging China's ambition to become a world leader in electrical power equipment by 2025.
• Besides, the Chinese private companies are signing an agreement with foreign players for building a bunch of advanced innovation-driven smart grid projects, including smart substations, automation, smart EV charging and battery swapping networks, smart power consumption information collection system, and multi-terminal VSC-HVDC.
• In 2021, the total primary energy consumed was 157.65 exajoules, a rise of 7.1% compared to 2020. Further, the power infrastructure propelled significantly, with an electricity generation of 8534.3 TWh in 2021, witnessing an 8% increase from 2020.
• Therefore, with the rise of electricity demand and increasing emphasis on clean energy, leading to new-generation projects and the refurbishment of outdated transmission systems in China, the demand for substation automation is expected to increase in the coming years.

China Smart Grid Network Industry Overview

The Chinese smart grid network market is consolidated, with nearly 80% of the market operated by the State Grid Corporation of China. The key international and domestic vendors involved in the market (in no particular order) include ABB Ltd., Siemens AG, General Electric Company, International Business Machines Corporation, and Huawei Technologies Co., among others.

China Smart Grid Network Market Leaders

China Smart Grid Network Market News

• June 2022: The State Grid Corporation of China announced that the company would invest an all-time high of more than USD 74.5 billion in power grid projects in 2022.
• October 2022: The State Grid Corporation of China (SGCC) announced that it would deploy a Nokia solution, aiming to use automation to better monitor electrical power production and distribution status in real-time, using IoT sensors throughout their infrastructure.