Report summary:

Smart grids use UHV power grids as the backbone grid and use advanced communication, information and control technology to build a unified intelligent power grid characterized by informatization, automation, digitalization, and interactivity. Its essence is to solve problems related to the energy supply side through intelligent construction of power grid transmission and distribution. Compared with traditional power grids, smart grids have five major characteristics: self-healing, defense, compatibility, interactivity, and cost efficiency:

Self-healing: It can achieve real-time continuous monitoring, evaluation and diagnosis of power grids, and has a strong early warning control system and preventive control capabilities, so as to achieve automatic fault diagnosis, fault isolation and system self-recovery.

Defensibility: It can maintain the power supply capacity to users in the event of major disturbances and faults; can effectively resist computer viruses and ensure information security.

Compatibility: Compatible with various types of devices, including primary and secondary devices, and supports correct and reasonable access to renewable energy.

Interactivity: It can realize intelligent interaction between the power grid and customers to meet the individual needs of customers; market transactions can better promote the participation of power market players in the safe management of power grids, thereby improving the level of safe operation of power systems.

Economical and efficient: It can schedule between different regions in a timely manner, balance the power supply gap, implement a dynamic floating electricity price system, provide users with electricity that can withstand electricity prices, and achieve optimal operation of the entire power system.

Over the past ten years, the overall investment in power grids across the country has shown an upward trend, but the overall growth rate has been slow, and it will accelerate sharply in 2024. In 2023, the total amount of power grid investment reached 527.5 billion yuan, a record high, but the year-on-year growth rate was only 5.4%, and the increase was not significant. However, in 2024, power grid construction accelerated markedly under the impetus of clear policies such as the “Guiding Opinions on the High-Quality Development of Distribution Grids under the New Situation” and the “Action Plan to Accelerate the Construction of New Power Systems (2024-2027)”. From January to August 2024, the total investment in the national grid was 333 billion yuan, an increase of 23.1% over the previous year. In the future, with the further implementation of the policy, power grid infrastructure upgrades will maintain rapid growth.

Sectional aspects: According to the “National Grid Intelligent Planning General Report”, smart grid investment focuses on power transformation, distribution and electricity consumption. From 2009 to 2020, the three fields of transformation, distribution, and electricity consumption invested 74.81, 89.21, and 118.47 billion yuan respectively, accounting for the main proportion, and are the main areas of intelligent power grid construction.

In the field of debt conversion, this article sorts out 22 targets that are highly relevant to smart grids, covering all aspects of power generation, transmission and distribution, and electricity consumption, and providing various core components, power equipment, and smart solutions for smart grids.

Risk warning: Risk that policies are not progressing as fast as expected, and there is a risk of technological iteration and replacement.