Reference News Network, March 18 report: Bloomberg News website published an article titled "China's 'Super Grid' Provides a Buffer Against Energy Shocks" on March 16. The following is a compilation of the report:

China's long-term energy construction work has gained new momentum due to the war in the Middle East, and the strategy of power grid operators to issue bonds and inject thousands of billions of dollars into the market has also been consolidated.

As the world's second-largest economy, China has become one of the largest investors in the power grid sector. In recent years, China has invested heavily in infrastructure to utilize more renewable energy and reduce reliance on imported energy. To support this growth, state-owned power grid operators have become the largest bond issuers in China, with bond issuance reaching unprecedented levels and bond yields approaching historical lows.

The large-scale investment highlights the central role of the power grid in Beijing's strategic development. This strategy involves transmitting electricity generated from wind and solar power from remote areas in the west to industrial centers in China. Analysts say that given the impact of oil supply disruptions, power grid construction is likely to accelerate.

Penny Chen (音), senior director at Fitch Ratings, said: "China's infrastructure construction efficiency is far higher than that of most countries, and the power grid is no exception." This advantage may further expand as soaring electricity prices have become a factor limiting the development ambitions of artificial intelligence and manufacturing in other regions.

Data compiled by Bloomberg shows that so far this year, China's two major power grid operators, State Grid Corporation and China Southern Power Grid, have issued RMB 92.5 billion in bonds domestically. In 2025, these two companies set a record for bond issuance of RMB 901 billion. So far this year, the average issuance interest rate for these bonds has been 1.7%.

The transmission lines operated by State Grid cover more than 80% of China's territory and provide power to over 1 billion people. China Southern Power Grid also operates power supply services in multiple provinces in China, including the economically strong province of Guangdong.

The financing boom in power grid infrastructure has enabled State Grid, the world's largest utility company, to reclaim the title of China's largest bond issuer since 2024, surpassing major commercial banks and state railway construction enterprises. In just the past year, the company issued a record RMB 754.5 billion in bonds, three times the amount of the previous year.

Li Gen, founder of the Beijing Fundamental Private Fund Management Center, said that in the next five years, State Grid's annual bond issuance could range between RMB 1.2 trillion and RMB 1.4 trillion. During the construction peak in the coming two years, its annual bond issuance could even exceed RMB 1.5 trillion. This will "firmly consolidate its position as China's largest corporate bond issuer."

These measures are part of China's plan to invest about RMB 5 trillion in the power grid over the next five years. This funding will be used to build a super grid to ensure the proper transmission of renewable energy power.

In some ways, investment in the power grid highlights how energy security has become a direct and critical safeguard for economic resilience against external shocks. China hopes to mitigate the impact of potential shortages of oil and gas resources.

Penny Chen from Fitch said that state-owned power grid companies often have sound balance sheets, leaving ample room for further borrowing.

However, cheap and abundant electricity supply is not enough just through massive investments. China's transmission and energy storage assets have low utilization rates, and the path for market-oriented reforms that can unlock these assets' potential remains unclear.

Despite this, the recent disruption of energy supplies through the Strait of Hormuz has validated the reasonableness of China's energy strategy. Lin Boqiang, director of the China Institute of Energy Policy at Xiamen University, said: "This highlights the importance of ensuring security and stability through localizing energy supply." He added that China's transition to green energy is the correct strategic move. (Translation/ Qing Songzhu)

State Grid Corporation of China's Ningxia-Hunan ±800 kV UHV DC Transmission Project (the "Ning Electric to Hunan" project) Zhongning Converter Station in Zhongwei City, Ningxia (Xinhua News Agency photo)

Original source: toutiao.com/article/7618396824333369892/

Statement: This article represents the views of the author."