In recent years, China's power industry has experienced rapid advancement, making significant strides in both technology and management. Achievements such as ultra-high voltage and supercritical technologies have positioned China as a global leader. Great progress has been made from the planning or to the construction as well as the operation and maintenance management level.
As China's power, petroleum, chemical, urban rail transportation, automotive, and shipbuilding industries have expanded rapidly, particularly with the acceleration of grid transformation, the consecutive introduction of ultra-high voltage projects, and the global shift of wire and cable production to the Asia-Pacific region centered around China, the domestic wire and cable market has expanded swiftly.
The wire and cable manufacturing sector has emerged as the largest among over twenty subdivisions of the electrical and electronic industry, accounting for a quarter of the sector.
I. Mature Development Phase of the Wire and Cable Industry
Subtle shifts in China's cable industry development over recent years indicate a transition from a period of rapid growth to one of maturity:
- Stabilization of market demand and a deceleration in industry growth, resulting in a trend towards standardization of conventional manufacturing techniques and processes, with fewer disruptive or revolutionary technologies.
- Strict regulatory oversight by relevant authorities, coupled with an emphasis on quality enhancement and brand building, is leading to positive market incentives.
- The combined effects of external macro and internal industry factors have prompted compliant enterprises to prioritize quality and branding, effectively demonstrating economies of scale within the sector.
- Requirements for entry into the industry, technological complexity, and investment intensity have increased, leading to differentiation among enterprises. The Matthew effect has become evident among leading companies, with a rise in the number of weaker companies exiting the market and a decrease in new entrants. Industry mergers and restructuring are becoming more active.
- According to tracked and analyzed data, the proportion of cable-listed companies' revenue in the overall industry has steadily increased year by year.
- In specialized areas of industries conducive to centralized scale, industry leaders are not only experiencing improved market concentration, but their international competitiveness has also grown.
II. Trends in Development Changes
Market Capacity：
In 2022, the total national electricity consumption reached 863.72 billion kilowatt-hours, representing a year-on-year growth of 3.6%.
By industry:
- Primary industry electricity consumption: 114.6 billion kilowatt-hours, up by 10.4%.
- Secondary industry electricity consumption: 57,001 billion kilowatt-hours, up by 1.2%.
- Tertiary industry electricity consumption: 14,859 billion kilowatt-hours, up by 4.4%.
- Urban and rural residents' electricity consumption: 13,366 billion kilowatt-hours, up by 13.8%.
By the end of December 2022, the country's cumulative installed power generation capacity reached approximately 2.56 billion kilowatts, marking a year-on-year growth of 7.8%.
In 2022, the total installed capacity of renewable energy sources exceeded 1.2 billion kilowatts, with hydroelectric, wind power, solar power, and biomass power generation all ranking first in the world.
Specifically, wind power capacity was about 370 million kilowatts, up by 11.2% year on year, while solar power capacity was about 390 million kilowatts, a year-on-year increase of 28.1%.
Investment Status：
In 2022, investment in grid construction projects reached 501.2 billion yuan, a year-on-year increase of 2.0%.
Major power generation companies across the nation completed investment in power engineering projects totaling 720.8 billion yuan, reflecting a year-on-year increase of 22.8%. Among these, hydropower investment was 86.3 billion yuan, down by 26.5% year on year; thermal power investment was 90.9 billion yuan, up by 28.4% year on year; nuclear power investment was 67.7 billion yuan, up by 25.7% year on year.
In recent years, driven by the "Belt and Road" initiative, China has significantly expanded its investments in African power, leading to a broadened scope of Sino-African cooperation and the emergence of unprecedented new opportunities. However, these initiatives also involve more political, economic, and social issues, leading to significant risks from various angles.
Market Outlook：
Presently, relevant departments have issued some goals for the "14th Five-Year Plan" in energy and power development, as well as the "Internet+" smart energy action plan. Directives for the development of smart grids and plans for distribution network transformation have also been introduced.
China's long-term positive economic fundamentals remain unchanged, characterized by economic resilience, substantial potential, ample maneuvering room, sustained growth support, and an ongoing trend of optimizing economic structural adjustments.
By 2023, China's installed power generation capacity is projected to reach 2.55 billion kilowatts, rising to 2.8 billion kilowatt-hours by 2025.
Analysis suggests that China's power industry has undergone rapid development in recent years, with a considerable increase in industry scale. Under the influence of new high-tech such as 5G and the Internet of Things (IoT), China's power industry has entered a new stage of transformation and upgrading.
Development Challenges：
China's diversified development trend in the new energy industry is evident, with traditional wind power and photovoltaic bases actively branching into energy storage, hydrogen energy, and other sectors, creating a multi-energy complementarity pattern. The overall scale of hydropower construction is not large, mainly focused on pumped storage power stations, while power grid construction across the nation is witnessing a new wave of growth.
China's power development has entered a crucial period of shifting methods, adjusting structures, and changing power sources. Although comprehensive power reform has made significant progress, the upcoming phase of reform will confront formidable challenges and formidable obstacles.
With China's rapid power development and ongoing transformation and upgrading, the large-scale expansion of the power grid, increasing voltage levels, a growing number of high-capacity and high-parameter power generation units, and massive integration of new energy power generation into the grid are all leading to a complex power system configuration and operational characteristics.
In particular, the increase in non-traditional risks brought about by the application of new technologies such as information technology has raised higher requirements for system support capabilities, transfer capabilities, and adjustment capabilities, presenting significant challenges to the safe and stable operation of the power system.