China to invest $US14.6bln in high voltage line construction

Jan 26, 2009 - Asia Pulse Data Source

China's State Grid announced recently that it would invest over 100 billion yuan ($US14.6 billion) in ultra high voltage (UHV) transmission line construction in the next 3-4 years.

Analysts hold this will be favourable for expansion of the domestic power transmission and transformation equipment market and benefit China's power transmission and transformation equipment manufacturing giants like Baoding Tianwei Baobian Electric Co., Ltd (SH:600550) and TBEA Co., Ltd (SH:600089).

So far, China's first 1,000-kilovolt ultra high voltage transmission line linking Shanxi province with Jingmen City in Hubei province via Nanyang in Henan province has gone into formal operation on Jan. 16.

According to a government plan, China will build 4,200 kilometres of UHV transmission lines with 39-million kilovolt ampere transformation capacity during the country's 11th Five-Year Program period (2006-2010).

Meanwhile, China will step up the construction of the Xiangjiaba-Shanghai and Xiluodu-Zhuzhou UHV directing current (DC) transmission lines.

By 2020, China is expected to build up a backbone UHV power grid with two north-south and two east-west transmission lines.

The power transmission capacity would exceed 200 million kilowatts, taking 20 per cent of the nation's total installed capacity.

The 4-trillion stimulus economic package carried out by Chinese government has listed the construction of backbone power grid as a key project, which is believed to refer to the construction of UHV transmission lines.

At present, of China's two power grids, the State Grid has two UHV dc transmission lines from Xiangjianba to Shanghai and form Jinping to Nanjing, which are expected to finish construction in 2010 and 2012 respectively; China South Grid has a 1,300-kilometre UHV DC transmission line under construction from Yunnan to Guangdong.

Han Ling, researcher with Everbright Securities, holds that the total investment in China's UHV DC converter stations would amount to 135.6 billion yuan in the next 10 years.

Accordingly, the market capacity of converter transformer, converter valve, and control and protection system would reach 29.8 billion yuan, 33.9 billion yuan, and 8.1 billion yuan respectively, making China the largest demander for DC transmission equipments.

Zhou Tao, researcher with Great Wall Securities, holds that the great demand for transmission equipments would provide good opportunities for China's leading power transmission and transformation equipment manufacturers to expand their market shares.

According to statistics, in the domestic converter transformer market, TBEA Co., Ltd currently takes about 40 per cent market shares, Tianwei Baobian Electric 25 per cent, and Xuji Group and XJ Electric Co., Ltd (SZ:000400) 30 per cent.

(XIC)