Orient: Grid structure shifting toward coordination of main, distribution, and microgrids; bullish on distribution network construction during the "15th Five-Year Plan"

Orient released a research report stating that during the "15th Five-Year Plan" period, China's electricity demand will still maintain an average annual growth of around 5%. Facing the systemic transformation brought by the high proportion of new energy grid connection, the construction of new-type power grids needs to be systematically and coordinately advanced around new architectures, new technologies, and new services. The National Energy Administration has clearly stated that the proportion of new energy in power source development will continue to increase and has provided target guidance. The large-scale grid connection of new energy will drive UHV construction and new-type power grid construction, and drive the volume growth of primary and secondary equipment. Orient's main viewpoints are as follows: Event According to China Energy News, the National Energy Administration held a deployment meeting on new-type power grid construction. During the "15th Five-Year Plan" period, China's electricity demand will still maintain an average annual growth of around 5%, the proportion of new energy will further increase, the demand for green and high-quality electricity from high-end industries will grow steadily, new models and new business forms will emerge at an accelerated pace, competition in core technologies will intensify, and higher requirements will be placed on new-type power grid construction. Facing the systemic transformation brought by the high proportion of new energy grid connection, the construction of new-type power grids needs to be systematically and coordinately advanced around new architectures, new technologies, and new services. The bank summarized that this deployment meeting mainly focused on four points for building new-type power grids. First, consolidate the grid foundation and create a new architecture of main grid, distribution network, and microgrid coordination. To adapt to the high proportion of new energy grid connection, promote the power grid's transition from one-way power transmission to bidirectional interaction among source, grid, load, and storage, smooth wind and solar fluctuations, and support distributed energy access. Second, strengthen technological innovation and implement new technologies such as AI, flexible grid-forming, intelligent regulation, and long-duration energy storage. The system will shift from "source follows load" to "source-load interaction," solve the problems of weak inertia and output fluctuations of new energy, and cultivate new quality productive forces in the power sector. Third, expand power grid services and develop new power grid services adapted to new business forms. Facing new loads such as computing power and electrified transportation, promote the power grid's transformation into a comprehensive carrier of "energy + computing power," and implement computing-power-electricity coordination and integrated source-grid-load-storage. Fourth, hold the safety bottom line and build a highly resilient power grid. Respond to changes in fault characteristics caused by power electronics and the impact of extreme weather, ensure the stable operation of large power grids, and balance energy transition and system security. The penetration rate of new energy continues to increase, and power grid construction will shift toward coordination of main grid, distribution network, and microgrid. The upstream and downstream pull effect of the new-type power grid industry chain is strong, with dual value of stabilizing investment in the short term and optimizing the energy structure in the long term. In terms of new energy penetration rate, during the 14th Five-Year Plan, the proportion of new energy installed capacity and power generation rose rapidly; it is expected that by 2030, the proportion of wind and solar installed capacity will exceed 50%, and a high proportion of new energy will become the new normal for the power system. On the power source side, the volatility of wind and solar increases the uncertainty of power flow; the proportion of synchronous thermal power units declines, and the system shows characteristics of low inertia, low damping, and weak support, increasing system stability risks and creating demand for power electronics and stability control equipment. On the power grid side, AC and DC, high-voltage and low-voltage grids are deeply coupled; the power grid shifts from "main grid-led, distribution network-assisted" to "multi-layer coordination of main grid, distribution network, and microgrid," with bidirectional power flow, significantly increasing the complexity of dispatch and operation. On the load side, loads shift from pure electricity consumption to prosumer type; distributed photovoltaics sink in large quantities into medium- and low-voltage distribution networks, and distribution networks shift from passive to active networks, source-grid-load-storage interaction strengthens, and demand for distribution network safety control and intelligent transformation increases. The bank believes that the gradual increase in domestic new energy penetration rate brings increased uncertainty and volatility to the existing power grid. The National Energy Administration has clearly stated that power grid construction will shift from "main grid-led, distribution network-assisted" to coordination of main grid, distribution network, and microgrid. It is bullish on the approval and construction of major power grid projects such as domestic transmission corridors & the demand for primary and secondary power grid equipment driven by new-type power grid construction. Risk warning Power grid distribution network investment falling short of expectations, etc.