According to a report by The Information, in response to escalating electricity demands, three major U.S. regional grid operators—in Texas, the Mid-Atlantic, and the Midwest—have secured approvals over recent months for transmission expansion projects totaling $75 billion. The core of this initiative involves large-scale construction of 765-kilovolt ultra-high voltage lines. Key projects include: 1) In the Mid-Atlantic region, PJM Interconnection approved a $11.8 billion plan in February, traversing Pennsylvania, West Virginia, Virginia, and Maryland, extensively utilizing 765-kilovolt specifications; 2) In Texas, ERCOT approved two investment plans totaling $33 billion, covering the eastern and western parts of the state; 3) In the Midwest, the Southwest Power Pool (SPP) and the Midcontinent Independent System Operator (MISO) are advancing projects exceeding $30 billion, with lines connecting Oklahoma to New Mexico and extending from South Dakota to the Great Lakes region. This voltage level represents the highest currently operational in the U.S., with single-line transmission capacity up to six times that of conventional lines. Upon completion, this expansive "electricity superhighway" network will see its total mileage surge from the current approximately 2,000 miles to 10,000 miles, achieving a fourfold expansion in scale.
Data from the International Energy Agency (IEA) indicates that in 2024, U.S. data center electricity consumption accounted for 45% of the global total, nearly double that of China, highlighting its dominant role in global digital infrastructure energy use. BloombergNEF forecasts that by 2035, the proportion of U.S. data center electricity consumption to the nation's total will sharply rise from 3.5% in 2024 to 8.6%. This growth rate far exceeds that of any other industry and is projected to surpass the electricity consumption growth of new energy vehicles within the next five years. It is precisely this unprecedented pressure on energy consumption that is compelling U.S. grid operators to advance the construction of ultra-high voltage transmission networks at an unprecedented speed and scale.
A research report from East Money Securities stated that the North American grid expansion validates the global grid sector's positive outlook. With tight domestic power equipment production capacity, manufacturers already supplying the North American market are poised to benefit from both market expansion and potential market share gains, while manufacturers not yet entered face a window of opportunity for market entry. A CICC research report highlighted the prominent supply-demand contradictions overseas, suggesting that Chinese manufacturers are entering an accelerated window for international expansion to capture highly elastic market opportunities. It is recommended to continuously monitor three key investment directions with strong international potential: on-site power generation (such as gas turbines), grid equipment, and solid-state transformers (SST).
Related Hong Kong-listed power equipment concept stocks include: DONGFANG ELEC (01072), Harbin Electric (01133), Shanghai Electric (02727), Chongqing Machinery & Electric (02722), Precision Castparts (01286), and WASION HOLDINGS (03393).