Chinese new round of upgrading rural power grids will be invested 700 billion yuan
Chinese government decided to implement a new round of power grid upgrading project in countryside. The funds involved will reach 700 billion yuan.
On February 3, Chinese Premier Li Keqiang chaired a State Council executive meeting. In the meeting it was decided to promote new urbanization, modernization of agriculture and poverty alleviation relocation and to implement a new round of power grid upgrading project in the countryside.
The power distribution network of users in Chinese county region including rural, agriculture, forest and pastoral areas is 110kV and below, which is known as the rural power grid. Compared with the main grid of China, distribution network and rural power grid construction relatively fall behind. With the improvement of standard of living and electrification, rural power cannot meet a lot of local production and living needs, which need to upgrade.
State Council believes that rural power grids can improve rural production and living conditions, develop of related industries and stimulate efficient investment and consumption. It is an important measure to serve multiple purposes.
It was decided to implement a new round of rural power grid upgrading project in the meeting. The project was divided into three specific parts. First, accelerate the upgrading of rural power grids in the western and poverty-stricken areas by focusing on contiguous poor areas, old revolutionary base areas. Try to solve the problems like voltage is not up to standard and no power. Improve the ability to accept new distributed energy generation.
Second, combine high standard farmland construction and promote the agricultural water-saving irrigation to promote full coverage of electricity plains village wells. Link agro-processing, rural electricity business development with new demand in rural consumption upgrade and increase the intensity of the center of the village power grids.
Third, tackle rural power grid construction in Tibet, Xinjiang and the Tibetan in Sichuan, Yunnan, Gansu and Qinghai provinces and concentrate on accelerating Isolated Network County networking process.
July 7, 2015, the National Energy Board announced that they and the NDRC have started the nearly 100 billion investment projects of the new rural power grids upgrade this year, involving 25 provinces (autonomous regions and municipalities) and Xinjiang Production and Construction Corps and a total of 2139 specific projects throughout the Midwest 1629 countries. The investment was about 92.6 billion yuan.
The funds of rural power grids proposed by State Council was expected seven times than last time. "To implement of the above project, the estimated total investment is above 700 billion yuan." The State Council executive meeting said.
State Council said the source of this 700 billion yuan of funds, continue to be arranged to the basis of the central budget investment and combined electricity reform to broaden the financing channels by commercial mechanisms to attract social capital to participate in the transformation of rural power grid construction.
Rural Network has over a broad characteristics, throughout the country. So the engineering and investment are relatively large. In recent years, the State Grid Corporation (hereinafter referred to as State Grid) and China Southern Power Grid Company (hereinafter referred to as South Grid) increased investment in rural power grids in each year.
According to data provided by the State Grid, it had a total investment of more than ten thousand billion by the end of July 2015. In 2015, the State Grid invested 67.4 billion yuan based on the 90.2 billion yuan investment. The total of funds were about 157.6 billion yuan, involving 1189 counties.
According to the report of "China Southern Power Grid", by the end of 2014, South Grid accumulated 206.7 billion yuan of net investment in rural power grid construction and transformation, including twelve rural power grids. According to the original plan of South Grid, "Thirteen Five" period will invest 36.52 billion yuan of rural power grid construction and transformation for centralized contiguous destitute areas.
700-billion rural power grids project will benefit the industries of relevant parts, raw materials and upstream iron and steel, metallurgy, nonferrous metals, cement and electrical components.
Previously, according to the estimates of State Grid, there were about two-thirds of capital of rural power grid construction and transformation investment, used to purchase electrical equipment and materials, which can promote the development of upstream and downstream industries, especially to increase the production and sales in the cement, steel, aluminum, electrical equipment manufacturing industry.
Power equipment manufacturers are the most direct beneficiaries of rural power grids project, in particular, the manufactures of equipment and substation of 110 kv and below, distribution network secondary equipment, low-voltage electrical business, as well as the enterprises related to smart grids, power distribution automation, substation automation and so on.
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Rural power grid upgrading largely
Cable companies are in short supply
Conventional equipment in China's cable corporates has long been in overcapacity, the upgrading of rural power network will effectively alleviate the adverse situation.
Upgrading rural power grids
The new round of boom of rural power grids upgrading and construction has brought great opportunity of development for cable industries especially agricultural cable industry.
Conventional equipment in China's cable corporates has long been in overcapacity, the upgrading of rural power network will effectively alleviate the adverse situation. Cable companies are faced with enormous business opportunities; however on the other hand, although many small cable companies are dotted in our countryside, they do not fully meet the needs of rural infrastructure projects for wire and cable.
It is reported that , over the years , the State Grid Corporation has basically reverse the lagging situation of agriculture net through several special rural power grid construction and transformation projects such as county power grid renovation project, Midwest rural network improvement project , "power" project and a new round of upgrading rural power project. However, with the advance of new urbanization, agricultural population settling in towns, villages and urban shanty towns and transformation of urban village will bring significant changes in electricity load levels and the power structure. The load of rural power grid will increase rapidly; function and morphology will change significantly as well. Besides, there will be increasing demanding for security of supply, reliability and quality of service.
In recent days, the State Development and Reform Commission and Energy Bureau start a new investment project of the transformation and upgrading of rural power grid which is nearly 100 billion, focusing to improve the rural power grids grid, improve supplying power quality and reliability. The new round of boom of rural power grids upgrading and construction has brought great opportunity of development for cable industries especially agricultural cable industry.
Insiders said that about two-thirds of the investment of the rural power grid construction and transformation will be used for the procurement of equipment. No matter in the transformation of urban or rural distribution network, the cable is the main equipment, which accounting for most of the proportion, bringing a new growth point for China’s cable corporates.
Technical level and the safety and reliability of rural power network are directly related to the level of rural areas power supply facilities in urbanization, for example, in MEW industry standards, there are characteristic requirements for provision of rural water and hydropower engineering cable, and there are different requirements for conductors’ material, insulation, sheath type and laying installation conditions, which the city cable companies will not necessarily be able to fully meet.
Cable products used in rural power grid construction are some of the popular simple products. Facing this growth opportunity, the cable companies can choose to focus to deal with specific products according to their condition, and focus on product quality, strengthening internal management, striving to reduce product costs and improving price competitiveness. In the new round of rural power grid construction projects, local cable companies, especially those providing cable products to rural network, should pay special attention.
Facing huge demand opportunity of rural power grid renovation project, related enterprises, on the one hand, should continue to focus on enhancing the quality of cable products, meanwhile they also should improve agricultural production and the efforts of research and development of new varieties cable. Besides, they should introduce new varieties of cables which modern cable construction of rural electrification needs to adapt to new market demands.
Implementation of rural power network upgrading project will optimize the structure of rural power grids continuously. The continuously improving power supply capacity, supply reliability and service levels can further meet the rapidly growing demand for electricity in rural areas need. Next, the NDRC will strengthen project management and urge the relevant units to speed up construction projects and timely inspect and supervise the engineering progress and quality, coordinating to solve the problems and difficulties encountered in upgrading rural power grids to ensure the rural power grids upgrading project accomplished on time with quality and quantity on schedule carrying out.