Power operator to spend record 650b yuan

State Grid Corporation of China, the nation's largest power network operator, plans to raise investments to a record high as it seeks to keep pace with surging renewable power.

The grid operator for roughly 80 percent of the nation will spend more than 650 billion yuan (HK$694.2 billion) this year, according to state-run CCTV. The firm last year said it planned to spend about 600 billion yuan on capital expenses.

China, which is still heavily reliant on coal power plants, is adding wind and solar farms at an unprecedented rate to meet climate pledges and reduce the need for expensive fuel imports. All the new intermittent power generation has strained the grids, with more power lines and energy-storage equipment required to deliver electricity where it needs to go around the clock.

Long-distance, ultra-high-voltage power lines, as well as smaller networks linking rooftop solar panels, will be the biggest beneficiaries of increased grid spending in China, analysts at China International Capital Corporation (3908) said in a research note last month. State Grid completed three new UHV lines last year, putting its total at 38, CCTV reported.

Increased spending on power infrastructure could also help boost demand for materials like copper and steel.

Bloomberg