In the summer of 2026, China is expected to have a maximum electricity load of 1.6 billion kilowatts, with an additional 90 million kilowatts of power supply shortfall. At the same time, IDC's computing power consumption surged by 44% year-on-year in the first quarter, with an average annual growth rate of 39.5% in computing power consumption over the past three years, which is five times the overall growth rate of electricity consumption in society. The devouring of electricity by AI is becoming a permanent incremental demand, and the power industry is upgrading from the traditional infrastructure track to the core infrastructure of the AI era.

Electricity becomes the main battlefield of AI in the second half

Firstly, the investment in the power grid during the 15th Five Year Plan period is a real hammer. In the next five years, the total investment in the new power grid will exceed 5 trillion yuan, with a focus on 15 newly built ultra-high voltage direct current, digital transformation of the national distribution network, and external transmission channels for wind and solar power bases. Ultra high voltage, secondary control equipment, transformers, and energy storage systems have become the first flow of funds, with orders continuing to increase until 2028.

Secondly, there has been an explosive growth in computing power consumption. In the first quarter of 2026, IDC's computing power consumption increased by 44%, and AI power grabbing became a permanent increment, no longer a short-term theme. Thirdly, the summer power supply gap is widening. The official estimate is that the maximum load this summer will be 1.6 billion kilowatts, with an additional 90 million kilowatts of power supply gap. After the implementation of capacity pricing, the profits of power plants are expected to double.

Monopoly barriers build moats

China Xidian: National team of ultra-high voltage transformers, core supplier of ultra-high voltage AC/DC transformers and converters in China, covering all under construction ultra-high voltage key projects in China, and a core supplier of first level centralized procurement for State Grid and Southern Power Grid.

Pinggao Electric: the king of ultra-high voltage AC switches, with the highest market share of 800kV ultra-high voltage GIS composite electrical appliances in China. The bidding unit price of the first batch of distribution network equipment will increase by 43% in 2026, and the industry's price increase cycle will begin.

TBEA: a global leader in transformers, with ultra-high voltage converters accounting for 18% of the global market and over 40% of the domestic market. It is the only enterprise in the world that combines transmission and transformation equipment, polysilicon, and coal in the entire industry chain, and is the exclusive supplier of special transformers to top IDC enterprises.

Southern Power Grid Energy Storage: Central state-owned enterprises specializing in pumped storage, backed by Southern Power Grid, hold millions of kilowatts of pumped storage installed capacity, and directly enjoy the benefits of the new capacity electricity pricing policy.

AI power grid super brain

The company is the absolute leader in domestic power grid dispatch automation systems, with a market share of over 75% for three-level dispatch automation systems, 74.5% for ultra-high voltage direct current control and protection, and over 50% for distribution network automation. We have independently developed 4500V high-power IGBT chips, breaking the overseas monopoly of Infineon and Mitsubishi. We have led and participated in the formulation of national standards for over 70% of power grid dispatch and ultra-high voltage control, and are the industry rule makers.

In terms of performance, new contracts worth 75.868 billion yuan were signed for the whole year of 2025, and the production capacity is scheduled to cover until 2027. The performance for the next two years will be fully locked in. Overseas business has exploded, with a year-on-year growth rate of over 200% in newly signed international contracts in the first half of 2025. The $210 million dispatch system for Saudi NEOM Zero Carbon New City and the national smart grid project in Brazil have been implemented, and the high-end markets in the Middle East and South America have been fully opened up. As the demand for AI computing power continues to rise, this enterprise that controls the "brain" of the power grid is standing at the core of the AI power era. Editor/Yang Beihua