Great Wall Securities: U.S. power grid equipment is expected to initiate a mandatory upgrade cycle, benefiting domestic AI power equipment's overseas demand

Tongtong Finance APP has learned that Great Wall Securities released a research report stating that, according to IEA data, global grid investment has grown rapidly since 2020, reaching $390 billion in 2024, with an expected surpassing of $400 billion in 2025. The US energy infrastructure is mostly below standard, combined with a significant increase in AI electricity demand, which is expected to trigger a mandatory upgrade cycle for US grid equipment. The substantial growth in AI data center power demand is likely to directly drive demand for transformers, high-voltage cables, and other equipment. In 2025, China’s grid equipment exports are expected to continue high growth, benefiting domestic related export companies.

Great Wall Securities’ main views are as follows:

Strong global demand for grid equipment, steady increase in investment scale

Due to equipment aging replacement needs, new AI demand, and supply constraints, demand for grid equipment in regions like the US continues to rise. According to IEA data, since 2020, global grid investment has grown rapidly, reaching $390 billion in 2024, with an expected exceeding of $400 billion in 2025. The US energy infrastructure is mostly below standard, and with the significant increase in AI electricity demand, the US grid equipment is expected to enter a mandatory upgrade cycle.

Electricity demand from AI data centers is expected to increase significantly

According to IEA data, global data center electricity consumption was about 415 TWh in 2024, and is projected to rise to 945 TWh by 2030, with an average annual growth rate of about 15%. IEA forecasts that by 2030, the US and China will account for 80% of global data center electricity demand. Compared to 2024, by 2030, US data center electricity consumption may increase by 240 TWh (+130%), China by 175 TWh (+170%), and Europe by 45 TWh (+70%). The obvious growth in AI data center power demand is expected to directly boost demand for transformers, high-voltage cables, and other equipment, benefiting related domestic export companies.

Supply restrictions on overseas grid equipment provide opportunities for Chinese companies to go global

The delivery cycle for US transformers has extended from 50 weeks to over 120 weeks. Chinese grid equipment companies have relative advantages in delivery time, technology, and cost, and export orders for transformers and other equipment are expected to continue benefiting.

Policy support ushers in new development opportunities for the grid equipment industry

Domestically, during the 14th Five-Year Plan, national grid investment is expected to reach 4 trillion yuan, a 40% increase over the 14th Five-Year Plan period. Regarding overseas expansion, the “Work Plan for Steady Growth of Power Equipment Industry (2025–2026)” explicitly encourages active exploration of international markets, deepening cooperation with emerging markets; guiding companies to reasonably and orderly expand overseas, improve product quality, and build a power equipment brand image; and encouraging component manufacturing enterprises to integrate into overseas supply chains.

China’s grid equipment exports continue to grow rapidly

According to General Administration of Customs data, the total transformer exports in 2025 reached $9.036 billion, with a cumulative growth rate of 34.83%, setting a new record high. In December 2025, among key power equipment export products, the export values of transformers, wires and cables, copper wound wires, low-voltage switches, and insulators increased by 31.92%, 22.20%, 11.71%, 10.60%, and 31.91% year-on-year respectively, showing a multi-variety high-growth trend, with monthly export values on the rise. In 2026, driven by multiple domestic and international demand factors, exports of key grid equipment products are expected to continue their positive trend.

Risk warnings

Risks of overseas economic recession; fluctuations in Federal Reserve policies; uncertainties in overseas tariff policies; escalation of geopolitical conflicts.