Infrastructure, News, Storage, Utility Integration

China to focus on stimulating energy infrastructure growth as the country tries to recover from COVID-19’s economic impacts

Major players like ABB and Siemens could see big boosts.

According to a memo from Yuki Yu, founder of research firm Energy Iceberg, the Chinese government has set an emphasis on “new infrastructure” as part of a stimulus strategy to boost its economy after the slowdown caused in part by trade tensions and the coronavirus COVID-19 outbreak.

The COVID-19 outbreak and the draconian measures deployed in China resulted in the extensive disruptions to economic activities, which delivered a hard blow to the economy, said Yu. Beijing has thus resorted to infrastructure construction as an economic stimulus method. 

Yu says that the government will focus on seven sectors, which include:

  • 5G
  • Artificial Intelligence 
  • Industry IoT 
  • Internet Data Centers
  • Ultra-High Voltage Transmission Grids (UHVs)
  • EV Charging Networks 
  • Inter-city High-Speed Rails 

The focus on UHVs could lead to a big boost to the energy industry, with players like ABB and Siemens likely to benefit, according to Yu.

“We urge the international supply chain to zoom into the opportunity brought by the new strategy,” she said in the Energy Iceberg memo.

The massive UHV construction plan could also have implications to the renewable energy industry, helping to lessen curtailment of wind and solar power. However, Yu noted that the majority of the existing UHVs are used to transmit thermal power instead of renewables so the impact on the renewable sector remains to be seen. 

In addition, increased focus on EV charging infrastructure means the sector could see exponential growth in what is already a hot market. Indeed, RenewableEnergyWorld.com reported that China installed more than 1000 EV charging stations per day in 2019.

Economic growth in China has been slowly declining over the past years, and the GDP growth target for 2020 was set at ‘around 6 percent,’ compared to ‘6 to 6.5%’ for 2019 and 8% in 2010, according to Yu. The trade war with the U.S. is a factor of that slower growth — in addition to macroeconomic decisions, purchase targets, and market uncertainty. About two-thirds of China’s provinces and regions and municipalities recently cut their growth targets.