In the middle and late 20th century, countries have begun to use dry-type transformers, and China began to introduce dry-type transformers in the eighties and nineties of the last century. Now China's transformer production has been able to meet the standard, not only pay attention to the protection of their own intellectual property rights, but also continue to carry out product research and development. With the take-off of the economy, China's demand for dry-type transformers is also rising at a growth rate of 20%, and China has become a country with a large sales volume of dry-type transformers in the world.

1. Opportunities brought by rising electricity prices to power grid construction

The state has adjusted the benchmark electricity price and sales price of coal-fired power generation in many provinces, and cancelled the special fund for structural adjustment from power generation enterprises to industrial enterprises.

The levy standards of the national fund for major water conservancy projects and the support fund for the resettlement of large and medium-sized reservoirs will be reduced by 25% respectively.

The new income of power grid enterprises is mainly used in the following three aspects.

The first is to make up for the increase in environmental costs such as energy conservation and emission reduction, including the increase in desulfurization costs.

The second is to transform electricity meters for residential users.

In the future, in the process of "one household and one meter" transformation, power grid management enterprises will no longer charge residential users for the cost of meter transformation.

In addition, the new revenue generated by the grid enterprises can also be used to compensate for the increased power purchase costs of the grid enterprises due to the rising fuel costs.

Overall, it is optimistic that the UHV plan will be approved, but it is expected to reach a peak of construction in the coming years, given the high certainty that large-scale power shortages are frequent, the state-backed high-end equipment manufacturing for independent technologies, and the overall investment in the grid.

2. The expansion of power grid investment brings optimistic prospects for the dry-type transformer industry

In recent years, the imbalance in the asset structure of China's power stations and power grids requires increased investment in the power grid, and in the face of an unexpected economic downturn, power grid investment has also become an ideal investment target. Judging from the figure below, from 2013 to 2018, China's power grid investment is on the rise, and the next few years are in the comprehensive construction stage of China's smart grid, and it is expected that China's power grid investment will continue to grow in the next few years. The expansion of the scale of investment in the power grid will lengthen the business cycle of the industry, especially the ultra-high voltage and ultra-high voltage equipment manufacturing enterprises will enjoy the excess profits brought by the high prosperity.

3. UHV has become the focus of power grid construction, and the demand for high-end transmission and distribution equipment has surged

According to the State Grid plan, during the "13th Five-Year Plan" period, on the basis of the "four crossings and five straights" project, the follow-up UHV project will be constructed in three batches, the first is to accelerate the construction of the "five crossings and eight straight" UHV project, and secondly, the construction of the "ten crossings and two straight" UHV project will be started before 2018 to accelerate the construction of a unified synchronous power grid.

It is understood that the total length of the new line is 12,000 kilometers, passing through 13 provinces (autonomous regions and municipalities), with a total investment of 173.7 billion yuan. In addition, the construction of UHV power grid will promote the transformation and upgrading of the equipment manufacturing industry and stimulate economic growth. It is estimated that the total investment of the "two direct" projects will reach 47.4 billion yuan, which will increase the output value of the power transmission and transformation equipment manufacturing industry by 21.3 billion yuan, directly drive the investment of power supply and other related industries by about 118.5 billion yuan, increase 33,000 jobs, and drive GDP growth of 15.2 billion yuan per year.

At the same time, with the launch of China's "One Belt, One Road" strategy, UHV projects are constantly landing abroad. On the basis of the start of the beautiful mountain project in Brazil, the State Grid said that the company is carrying out power and energy cooperation with Russia, Kazakhstan, Mongolia, Pakistan and other neighboring countries, accelerating the planning and preliminary construction of the UHV interconnection project, and is expected to basically realize the interconnection with the surrounding national power grid by 2025.