1. Power Decarbonization as a Critical Driver
Renewable energy sources such as wind and solar are often located in remote areas, necessitating expanded power lines and investments in hardware and software to address their intermittency issues. The UK's plan to achieve a net-zero grid by 2030 has prompted network operators to develop a five-year investment plan of nearly $100 billion. Even in the US, despite changing presidential attitudes, investments in renewable energy will continue to grow due to declining costs.
2. Rising Share of Electricity in Energy Consumption
The IEA predicts that electricity demand growth will far exceed overall energy demand in the next decade as electricity becomes more widely used in vehicles, home heating, industrial processes, and many other applications. California alone needs to invest $50 billion by 2035 in electricity distribution upgrades to meet electric vehicle charging demands.
3. Continuous Growth in Global Energy Demand
Economic development and increased air conditioning use have driven up electricity demand in developing countries. Goldman Sachs estimates that India's grid will require $100 billion in investment between 2024 and 2032, while energy consulting firms project that China's annual grid investment will also increase significantly by 2030.
4. Increased Energy Consumption from AI Operations
Tech giants' investments in AI have increased energy consumption, with data centers consuming enormous amounts of energy, forcing network operators to upgrade relevant power equipment. For example, Tokyo Electric Power in Japan plans to invest over $3 billion in infrastructure upgrades, while spending on auxiliary electrical equipment such as cooling systems has also increased substantially.
5. Urgent Need for Grid Reinforcement
Frequent extreme weather events cause tremendous losses, and aging grid infrastructure is vulnerable. The US Department of Energy provides loan guarantees to California power companies to help build grid resilience, while European infrastructure also faces aging issues.
However, challenges exist alongside opportunities. As grid infrastructure investment surges, supply chain bottlenecks have begun to emerge. Global transformer shortages, price increases, and extended delivery times have prompted companies to increase capital expenditure and innovation efforts.
Currently, grid operators are addressing multiple issues including increased power consumption, changes in power generation structure, and aging infrastructure. However, there are no signs of slowing in power infrastructure spending. Industry insiders indicate that pressure will only increase, and it is precisely these pressures that keep the industry optimistic about the future, looking forward to better seizing opportunities and addressing challenges in this "supercycle" to achieve sustainable development.