China hikes grid investment by 40% to $575b under 15th five-year plan

AI data centres are driving record China grid investments.

The State Grid Corporation of China (SGCC) is expected to invest $575.5b (RMB4t) in fixed assets during the 15th Five-Year Plan (FYP) period, a 40% increase over the 14th FYP, whilst China Southern Power Grid’s investment is projected to reach $143.9b (RMB t).

Global power demand from artificial intelligence (AI) data centres is driving this cycle, with the US Department of Energy forecasting AI server electricity consumption of 165–325 TWh by 2028, CGS International said.

This surge is creating power shortages in North America, whilst global grid investment is expected to exceed $400b in 2025, according to CGS.

International supply chain constraints have opened opportunities for Chinese exporters, as delivery lead times for transformers and cables in Europe and the US have doubled, and waiting times for high-voltage direct current systems now extend into the 2030s.

Domestic upgrades are focused on ultra-high-voltage lines and smart distribution networks, with SGCC bidding volume for transmission equipment reaching $13.2b (RMB91.88b) in 2025.

Key components include transformers and power cables, whilst new intelligent meter standards are expected to drive higher volumes and prices in 2026.

The report highlighted key companies supporting grid upgrades and AI data centre expansion, noting that risks to this outlook include investment falling short of expectations and rising raw material costs.

(US$1 = RMB6.95)