Zhongjin: The expectation of power shortage in North America is expected to continue, which is likely to drive the release of demand in areas such as machinery and equipment in our country.

Zhongjin released a research report stating that the expansion of AI computing power, changes in the manufacturing industry landscape, and electrification are driving the increase in electricity consumption in North America, leading to significant power shortages. Currently, the power shortage in North America has become systematic, involving multiple aspects of power generation, transmission, distribution, and end-use. In the short term, North America may still mainly rely on gas turbines as the primary new power source. Looking ahead, the reshaping of the energy system will still rely on the expansion of gas-fired power, nuclear power, and comprehensive upgrades of the power grid. It is expected that the current power shortage in North America will continue to drive demand in sectors such as machinery equipment, power equipment, photovoltaic new energy, and non-ferrous metals, providing Chinese companies with good opportunities for overseas development. Key points from Zhongjin are as follows: Continuing Pressure of "Power Shortage" in North America The expansion of AI computing power, changes in the manufacturing industry landscape, and electrification are driving the increase in electricity consumption in North America, leading to significant power shortages. On the demand side, explosive growth in AI may be the main reason. In September, OpenAI and NVIDIA announced a collaboration to build a 10GW data center for training and running next-generation AI models. It is widely expected by the media (as of October 31, 2025) that the total capital expenditure (including financing leases) of the top four cloud companies in North America in 2025 is expected to increase by 58.5% year-on-year, reaching $362 billion; even in 2026, it may still maintain about 30% growth on a high base. Model training and reasoning are highly dependent on electricity, and the rapid advancement of data center construction is leading to a rapid increase in electricity demand. On the supply side, the aging problem of the North American power grid is prominent, with a large number of old coal-fired and gas-fired projects being phased out, and the construction cycle of traditional gas-fired projects usually exceeds 3 years, while nuclear projects can take 5-10 years, resulting in short-term difficulties in resolving the power supply-demand imbalance. Power net imports data also show a rapid expansion of the power deficit. According to EIA data, from January to September this year, U.S. net power imports have reached 20.94 terawatt-hours, an increase of 125% year-on-year. Zhongjin International Group predicts that in the next five years, the annual incremental power load in the United States may exceed 30GW, with about 20GW of new load coming from the commissioning of data centers, and the average annual power deficit may be around 15GW, indicating the possibility of long-term power shortages. The tight pressure of power supply and demand in North America has been transferred to end-user electricity prices. According to the U.S. Energy Information Administration, as of August this year, U.S. retail electricity prices have increased by an average of 6% compared to the same period last year. Democratic senators blame some regions' rising electricity prices on the government's promotion of data center construction and its impact on renewable energy, accusing it of failing to protect consumers from subsidizing the costs of large data centers. At the same time, power shortages and rising electricity prices may lead to increased electricity costs for businesses, potentially squeezing profits in related industries and requiring caution to prevent cost transmission from creating operational pressures. To fill the huge power gap caused by the development of AI in the United States, the Trump administration plans to invest billions of dollars of national funds to finance the construction of new nuclear power plants. In May, President Trump signed an executive order requiring the construction of 10 large nuclear reactors by 2030 to meet the power needs of data centers. Last month, the Trump administration reached an $80 billion agreement with Westinghouse Electric to build nuclear power plants across the United States. U.S. Energy Secretary Chris Wright recently stated that with the gradual start-up of new reactors, most of the funding for nuclear power plants would be supported by the Energy Department's loan office. However, the long construction cycle of nuclear power plants means that capacity is not expected to be released until 2028-2030, making it difficult to bridge the current power gap. The expectation of continued power shortages in North America, which industries in China are likely to benefit? The power shortage in North America has become systematic, involving various aspects of power generation, transmission, distribution, and end-use. Combining the views of various industry groups within Zhongjin, it is believed that in the short term, North America may still mainly rely on gas turbines as the primary new power source, supplemented by rapidly deployable solid oxide fuel cells (SOFC), photovoltaics, and energy storage, while upgrading overall efficiency through new technologies such as solid-state transformers (SST). Looking ahead, the reshaping of the energy system will still rely on the expansion of gas-fired power, nuclear power, and comprehensive upgrades of the power grid. Since the beginning of this year, the logic of power shortages in North America has been strengthened and has attracted the attention of investors. From the main power source of gas turbines to the cutting-edge power source of SOFC, and then to the chain of power equipment going overseas driven by North American demand, related sectors have shown recent performance. Looking ahead, as the Sino-US economic and trade relations enter a new stage, China's institutional dividends, large-scale economy, upstream and downstream synergy, industrial cluster effects, and engineer dividends continue to improve global industrial competitiveness. It is expected that the current power shortage in North America will continue to drive demand in sectors such as machinery equipment, power equipment, photovoltaic new energy, and non-ferrous metals, providing related Chinese companies with good opportunities for overseas development. Specifically: In terms of machinery equipment, compared to other power generation options, gas turbine power generation in the short term has many advantages, such as high thermal efficiency, rapid response to demand, short construction period, stable power output, low cost, and relative cleanliness (in the long term, hydrogen can be blended to reduce carbon emissions), and may be the optimal short-term solution for powering North American data centers. The construction of large gas turbine orders brought by North American AI data center construction has grown significantly, including global leaders such as GE, Siemens, Mitsubishi, etc., expanding production to meet demand. Domestic subcontracting and key component suppliers such as blades, casting, materials, etc., are expected to benefit. In terms of power grid equipment, driven by energy transformation and AI infrastructure construction, North America's aging power grid urgently needs upgrades and expansion, entering a phase of large-scale development of power grid construction. Transformers face a serious supply shortage due to long manufacturing and delivery cycles. According to industry group calculations at Zhongjin, from 2024 to 2027, apart from the Asia-Pacific region, the supply-demand gap for transformers in major overseas markets is expected to continue to expand, with the North American region's supply gap potentially reaching as high as 66%. China, as a major manufacturer of power equipment globally, with a complete industrial chain, high delivery efficiency, mature overseas project experience, is expected to become a major supplier to fill the gap. Customs data shows that from January to September 2025, China's transformer exports amounted to $6.5 billion, a 39% year-on-year increase. Overseas demand for electrical equipment is abundant, while structural supply problems remain. Zhongjin industry groups expect that supply constraints will continue to support higher profits in the transformer industry. In terms of energy storage, the high-energy consumption, high power density characteristics of AI data centers, and their "roller coaster" power usage patterns pose a severe test to the grid's regulation and stability. Energy storage is expected to become a standard solution to address this. Energy storage has the advantage of rapid response, adapting to the next generation of data centers' 800V DC power supply architecture, acting as a "stabilizer" to mitigate AIDC load fluctuations; it can also serve as a high-reliability "power bank" to ensure critical computing tasks continue uninterrupted during power shortages, and may help solve the scaling challenges of AIDC in the face of scarce grid resources. If energy storage gradually becomes a standard feature of AIDC, the demand for energy storage in North America may exceed expectations. It is recommended to focus on leading Chinese companies with technological and channel advantages that are accelerating overseas plant construction. In terms of new technologies such as HVDC/SST, the exponential growth of AI workloads is increasing the power demand of data centers. The traditional 54V rack internal power distribution is suitable for kilowatt (KW) level rack designs, incapable of supporting the megawatt (MW) level racks that will soon enter modern AI factories. High-voltage DC power supply (HVDC) architecture has the advantages of high flexibility, efficiency, and reliability. NVIDIA is promoting the upgrade of power supply architecture to 800V HVDC, aiming for full deployment by 2027. SST, due to its small size, high efficiency, short construction period, and high flexibility, is expected to become the preferred technology solution for future AIDC power supply. Zhongjin industry groups believe that the future development trend of HVDC/SST is clear, which may benefit enterprises with leading advantages in new technology accumulation, product layout, and project experience. In terms of photovoltaic new energy, with the retirement of old power sources, the long construction period of new gas-fired and nuclear power plants, in the short term, the demand for photovoltaics, energy storage, and SOFC fuel cells has significantly increased due to their ability to be quickly deployed and provide stable power and regulation capabilities. In the long term, the expansion of global new energy demand in the post-cycle, accelerated investment in the power grid, and deepening applications of energy storage will continue to drive industry prosperity. In terms of non-ferrous metals, aluminum wires are widely used in North American transmission and distribution networks. The accelerated construction of the American power grid will drive demand for aluminum materials for cables, directly boosting the consumption of electrolytic aluminum. However, electrolytic aluminum consumes a large amount of electricity, and domestic production capacity in the United States is constrained by high electricity prices. Against the backdrop of China's close to capacity and slow overseas expansion pace, Zhongjin industry groups expect supply constraints to continue to support higher profits in the electrolytic aluminum industry. Risk factors: Demand not meeting expectations, greater flexibility in North American overseas development, changes in trade policies.