SHANGHAI, Mar 26 (SMM) – China’s copper consumption growth sees limited traction from the critical investor—China State Grid (SGCC) this year, as the state-owned electricity network operator only plans a moderate investment increase.
Ultra-high voltage (UHV) projects that have been heavily betted on to enhance the grid's distribution capacity, are not expected to significantly drive up copper consumption, either, as they will use aluminum conductor steel reinforced (ACSR) cables, rather than copper-containing cables, in overhead power lines.
SGCC has expanded its planned investment on the nation's electricity network this year by 10% to 450 billion yuan from its initial plan, with UHV projects accounting for 40.24% or 181.1 billion yuan.
SGCC’s latest spending plan for this year marks only a 0.6% increase from its realised investment of 447.3 billion yuan in 2019.
Data showed that realised investment on grid projects by SGCC have shrunk for three consecutive years, falling more than 10% from a peak of 497.7 billion yuan in 2016 to 447.3 billion yuan in 2019.
In the construction of UHV projects, transformer substations are expected to be the biggest consumer of copper, if copper-containing cables are not used in overhead power lines. About 200 km of cables will be used to build a transformer substation, while copper used in a transformer is typically less than 10,000 kg.
China eyes ‘new infrastructure’ to shore up growth
UHV power facilities are one of the officially listed seven areas of "new infrastructure," which have been looked to by Beijing to hedge against the economic fallout of the novel coronavirus outbreak and boost the country's economy in the long term.
"New infrastructure" also include 5G, inter-city transport, vehicle charging stations, big data centres, artificial intelligence and industrial internet.
SGCC’s 181.1 billion yuan investment in UHV projects this year is expected to drive social investment to 223.5 billion and overall investment to nearly 500 billion yuan.
With new domestic virus cases in China grinding to a halt and businesses getting back to work, SGCC has resumed all its projects, except for those in the epicentre of Hubei, according to a statement from the company earlier this month.
Key UHV direct current transmission projects, including ±800 kv Qinghai-Henan and ±800 kv Yazhong-Jiangxi projects, began to resume work in the second half of February, and the Shaanbei-Wuhan link started construction at the end of February.
Completion of a slew of UHV projects is expected in this and next year.
