(I)Current situation of UHV market

During the "14th Five-Year Plan" period, the construction of large-scale wind power and solar generation bases have been accelerated, the investment scale of power grid has increased, the problems of the new energy grid-connected consumption and the cross-regional power transmission need to be further solved. Under the background of promoting economy and stabilizing growth, the UHV industry is expected to usher in the peak of investment and construction in 2023, effectively driving the development of upstream and downstream industrial chains.
Line Length and Transmission Capacity of UHV Project

The construction of UHV projects has accelerated, and the accumulated line length of UHV projects increased rapidly from 16937 kilometers in 2016 to 446134 kilometers in 2022.

According to the statistics of State Grid data, from 2016 to 2022, the State Grid UHV cross-region and inter-provincial power transmission capacity gradually increased, and the growth rate has increased. In 2022, the UHV cross-region and inter-provincial power transmission capacity of State Grid reached 2834.611 billion kWh.

(II) UHV Investment Situation

UHV construction in China can be roughly divided into four stages. The first stage is the experimental stage (2006-2008), and in August 2006, the National Development and Reform Commission approved China's first UHV AC project; the second stage is the first round peak of UHV development(2011-2013); the third stage is the second round peak of UHV development(2014-2016), and the present stage is the fourth stage of UHV development (2018-present).

The first stage of rapid development of China's UHV investment scale was from 2014 to 2017, with an investment quota of 196.6 billion yuan, followed by relatively stable development. From 2018 to 2020, a total of 213 billion yuan was invested to develop UHV engineering construction. In the future, affected by the acceleration of the new power system construction, the development of UHV will usher in the peak of investment construction, and it is estimated that the investment scale will reach 380 billion yuan from 2021 to 2025.

(III) Summary of UHV Project

During the "14th Five-Year Plan" period, the State Grid planned to construct the UHV project of "24 AC and 14 DC," involving more than 30,000 kilometers of lines, with 340 million KVA of power transformation and commutation capacity and a total investment of 380 billion yuan. In 2021,31 provinces (municipalities) of the country announced the "14th Five-Year Plan" development plan, of which 25 provinces (municipalities) clearly wrote out the new energy development plan during the "14th Five-Year Plan" period, and 17 provinces (cities) started to build UHV projects.

2022 is a crucial year of the "14th Five-Year Plan". Several UHV projects have been completed and put into operation, and several projects have been constructed or approved at full capacity.

On September 30,2022, Fujian-Guangdong interconnection project, the key power project of the national "14th Five-Year Plan" ,jointly invested and constructed by State Grid Corporation of China and China Southern Power Grid Corporation was officially put into operation, and the power grids of Fujian and Guangdong provinces were interconnected for the first time. The project will play an important role in improving the mutual supply of surplus and shortage of power in Fujian and Guangdong provinces, promoting the optimal allocation of energy resources and ensuring the safe and reliable supply of power.

The Fujian-Guangdong interconnection project started in April 2021 with a total investment of RMB 3.2 billion yuan. It built a DC back-to-back converter station in Fujian, which was connected to Fujian power grid and Guangdong power grid respectively through two 500kV AC lines, with a transmission capacity of 2 million kilowatts and a total length of 303km. The project is the second interconnection channel between the State Grid and the Southern Power Grid after the Three Gorges-Guangdong ±500kV HVDC Project.

On December 30,2022, Baihetan -- Zhejiang ±800kV UHV DC transmission project was successfully completed and put into operation, which marked the full completion of Baihetan Hydropower Station power transmission channel project. Baihetan -- Zhejiang Project is a national major project of "West-East Power Transmission". It is one of the main transmission channels of Baihetan Hydropower Station, the second largest hydropower station in China with installed capacity. It is a key project to help ensure power supply in eastern China. It is a super project to effectively stimulate domestic demand and help stabilize economic growth. It is a green project to optimize energy structure and serve the goal of "carbon peaking and carbon neutrality".

2. UHV industrial chain and key enterprises in the industry

(I) UHV industrial chain

In terms of UHV industry chain, its upstream is mainly power supply control terminal, including explosion-proof high and low voltage frequency converter and UHV switch; the midstream are UHV transmission lines and equipment, including DC and AC UHV, transmission end cable racks, insulation devices and electrical electrical apparatus detection; the downstream is mainly power supply terminal.

In the UHV industry chain, the UHV lines and equipment in the middle stream are the main body of UHV construction, and the UHV equipment in this main body can be further divided into DC UHV equipment and AC UHV equipment according to the DC project and AC project. Although DC voltage and AC voltage both belong to UHV, they are different in technology, transmission capacity and stability, in which DC voltage of ±800kV and above is mainly transmitted by DC UHV equipment; AC voltage of 1000kV and above is mainly transmitted by AC UHV equipment.

(II)Key enterprises in UHV industry

1.China XD Group Co., LTD

The main business of China XD Electric Co., Ltd. is R&D, design, manufacturing, sales, testing, complete sets of related equipment, technical research, service and engineering contracting of transmission and distribution and control equipment. The layout of UHV equipment product of China XD Electric Co., Ltd. is more diversified, including a full set of UHV equipment,such as transformers, reactors, high-voltage switches, power capacitors, transformers,lightning arresters, insulators and bushings, converter valves and wire and cable products.

2.Nari Technology Co.,LTD

The Nari Technology Co., Ltd. is mainly engaged in R&D, design, manufacturing, sales, related system integration and engineering general contracting business of power grid automation and industrial control, power automation information communication, relay protection and flexible transmission, power generation and water conservancy and environmental protection. The Nari Technology Co.,LTD has reached the leading level in several key equipment in the field of UHV, and has a full range of UHV relay protection products.

3. XJ Electric Corporation.

XJ Electric Corporation is engaged in the development and sales of secondary equipment and primary equipment of power system. XJ Electric Corporation has products mainly including intelligent power substation and distribution system, intelligent medium-voltage power supply equipment, smart meters, intelligent charging and switching system for electric vehicles, DC transmission system and EMS processing services.

4. Pinggao Electric Co.,LTD

The company is a major R&D and manufacturing base of domestic high-voltage switch, and its business scope covers high-voltage switch, transmission and distribution and control equipment, instrumentation and other electrical products and equipment R&D, production and other services. As an international leading electrical switch leader, the company carries out cooperation around UHV, primary and secondary equipment integration, operation and maintenance, inspection and test projects, to promote marketing synergy of industrial sectors. At present, the company's market share in the field of UHV GIS switches is as high as 40-45%. Significant breakthroughs have also been made in the field of UHV DC such as DC circuit breakers, cut-off filters, and DC through-wall bushings.

5. Ke Electric CO.,LTD.

Shijiazhuang Ke Electric Co., Ltd. Was founded in 2000, which is committed to building a new format for the development of the global power industry and provide intelligent power system solutions for customers in the power industry, public utilities and large industries. Through diversified development strategy, multi-dimensional innovation concept, multi-means capital operation, we will integrate global resources, embrace intelligent manufacturing, and strive to build a high-tech, high-growth quality enterprise. The business involves more than ten series of intelligent substation, intelligent power distribution, intelligent power consumption, new energy, etc.

3. Development prospects of UHV industry

Overall, China's UHV technology has been in the leading position in the world, UHV equipment has been completely localized, and the industry is in a rapid development stage. According to preliminary statistics of UHV investment, during the "14th Five-Year Plan" period, China's UHV investment is expected to be about 380 billion yuan, which is a rapid growth compared with the UHV investment of more than 270 billion yuan during the "13th Five-Year Plan" period. At the same time, during the 14th Five-Year Plan period, it is planned to construct "24 AC and 14 DC" for UHV projects.