SHANGHAI, Jan. 28 (SMM) – The State Council issued the 12th Five-Year Plan for Energy Development (hereinafter referred to as Plan) on January 23. According to the Plan, power consumption in China will reach 6.15 trillion kwh by 2015. A new round of power grid upgrade targeted rural areas will be launched to ensure all rural residents can have access to electricity and to make sure that on-grid prices will be uniform for urban and rural residents.     

Investments in power gird in the countryside are expected to increase over the next two years, which industry insiders claim has only limited effect on stimulating consumption of copper wire and cable. Cable producers believes that power companies will prefer aluminum stranded wire given that overhead lines are more often used due to complicated terrain in rural areas.   

The State Council has decided to launch power grid upgrade projects in the countryside since early 2011. Thanks to increasing investments, most of the upgrade projects in developed and populous areas have been completed after years of construction. Zhang Guobao, the former head of the National Energy Administration (NEA) once predicted that investments in the three-year rural power grid upgrade (2010-2012) will be no less than RMB 200 billion. Although no specific figure regarding rural power gird investment has been unveiled, actual investments in this regard should be well above forecasts based on the National Bureau of Statistics (NBS)'s release of actual amounts of investments in power gird construction (including rural areas) during 2010-2012.  

Some industry insiders say rural power grid upgrade may be completed in 2015 since on-grid price will be uniform by then regardless of electricity generated by State Grid Corporation of China (SGCC) or China Southern Power Grid (CSPG). This means rural power grid upgrade in remote areas and areas without access to electricity will accelerate during 2013-2014 so as to complete the target of rural power grid upgrade.  

To sum up, investments in main power grid (220KV-750KV) will slow down following years of large-scale construction. Instead, more money will be injected into ultra-high voltage power grid (800KV DC and 1000KV AC) and distribution network (110kv and below).