(Yicai) April 8 -- China’s electrical grid buildout is gathering pace, with the two biggest power distributors investing a combined CNY167.5 billion (USD24.5 billion) in the grid in the first quarter and five-year plans pointing to an almost CNY1 trillion (USD146 billion) spending spree each year.

State Grid made nearly CNY130 billion of fixed-asset investment in the three months ended March 31, up about 37 percent from a year earlier, while China Southern Power Grid invested CNY38.5 billion (USD5.6 billion), a nearly 50 percent increase, according to data released by each firm.

State Grid started 393 network projects of 66 kilovolts, 110 kV, and above, while 579 were completed and began operations, representing year-on-year increases of 42 percent and 24 percent, respectively. The faster growth in new project starts compared with completions suggests investment is likely to remain elevated in the months ahead.

One of the main objectives of this investment round is to support China’s green and low-carbon energy transition. State Grid said first-quarter spending on new energy grid-connection projects exceeded CNY10 billion, a more than 50 percent jump from a year ago, ensuring that electricity from big solar and wind projects can be connected to the grid and absorbed in time.

State Grid also invested CNY56.8 billion in its distribution network in the first quarter, mainly to upgrade urban and rural power supply systems and meet rising demand for distributed energy resources and electric vehicle charging infrastructure.

China’s power grid investment is entering a historic peak period. State Grid previously announced that its total fixed-asset investment is expected to reach CNY4 trillion (USD586.1 billion) between 2026 and 2030, marking a 40 percent increase on the previous five years. Over the same period, China Southern Power Grid’s fixed-asset investment is projected to approach CNY1 trillion.

The two companies plan to focus their investments on four key areas: ultra-high voltage transmission, smart distribution networks, new-type energy storage, and coordination between power grids and computing infrastructure.

The pair are together expected to invest nearly CNY5 trillion in fixed assets over the next five years, with the annual average approaching CNY1 trillion. This would mark China’s power grid construction entering a new stage characterized by trillion-yuan annual investment.

Power grid investment is necessarily vast, spans a long industrial chain, and has a strong multiplier effect, quickly translating into real economic activity and helping to steady growth. Moreover, because the grid is the key vehicle for the energy transition, heavier investment is helping remove bottlenecks in clean power distribution and consumption, supporting energy security and a broader green transformation.

Editors: Tang Shihua, Emmi Laine