AI computing power is driving a global power deficit! China's power equipment industry is embracing its golden opportunity to expand overseas
Amidst the dual wave of global computing power expansion and energy infrastructure upgrades, China's exports of power equipment are ushering in a new round of growth opportunities. According to data from the General Administration of Customs, in the first quarter of this year, China's cumulative export value of transformers reached 13.809 billion yuan, marking a year-on-year increase of 43.13%. Notably, the export growth rate of high-power transformers has been particularly impressive. Simultaneously, high-end power equipment, represented by prefabricated modular substations, is accelerating its "going global" process. Recently, China's highest voltage level prefabricated modular substation exported successfully delivered electricity in Oman.Driven by the "twin engines" of technology and standards, the Chinese approach is offering new options for the construction of global power infrastructure.
The expansion of computing power has given rise to a "rigid demand" for power equipment
Amidst the wave of data center construction, electricity demand is experiencing explosive growth. According to a research report by Ping An Securities, global data center electricity consumption is expected to double from 460 terawatt-hours in 2022 to over 1,000 terawatt-hours this year, making data centers a significant driver of electricity demand growth in numerous countries and regions. Additional data indicates that the global data center transformer market will reach a value of $9.45 billion in 2025, and is projected to grow to $10.08 billion this year.The accelerated aging of power grids in Europe and the United States has further exacerbated the supply-demand gap. According to a research report by Huaxin Securities, currently, over 50% of the power grid equipment in the United States has been in operation for more than 25 years, and about 40% of the distribution networks in Europe have been operational for over 40 years. The local transformer production capacity in Europe and the United States faces severe bottlenecks, with the average delivery cycle for power transformers being around 2.5 years, and for power generation step-up transformers being even longer, at around 2.8 years. Although local manufacturers in Europe and the United States intend to expand production, they still face serious limitations in core materials.It is worth mentioning that in February, the research team at Goldman Sachs raised its forecast for electricity consumption in US data centers, predicting that the demand for electricity in US data centers will jump from 31 GW in 2025 to 66 GW in 2027. Based on this revision, Goldman Sachs expects a 9% to 12% increase in US transformer demand from 2027 to 2028. Wood Mackenzie, an energy consulting firm, estimates that the current global supply gap for power transformers is as high as 30%, and the gap for distribution transformers has also reached 10%. Amidst this imbalance between supply and demand, Chinese transformer companies are becoming the most important supply force in the global market.According to data from the General Administration of Customs, in 2025, China's total export value of transformers reached a record high of 64.6 billion yuan, representing a year-on-year increase of nearly 36%. The average export price per unit increased from approximately 150,000 yuan in 2024 to 205,000 yuan in 2025, with a significant increase in the proportion of high-end large transformers. From January to April this year, China's transformer export value increased by 27% year-on-year, and the average product price increased by about one-third compared to the same period last year, indicating a trend of both volume and price growth in the industry.
Leading enterprises have orders scheduled until 2027
Against the aforementioned background, the substation construction model primarily relying on civil engineering is gradually becoming less capable of meeting the demands of "rapid deployment + high reliability". Prefabricated modular substations, leveraging their advantages such as modular design, factory production, and rapid on-site assembly, have emerged as a crucial technological approach that aligns with the pace of computing infrastructure construction. Compared to traditional models, they significantly reduce the construction period and enhance project delivery efficiency.Chinese enterprises started early in this field and have formed a relatively complete industrial chain system. They possess integrated output capabilities from equipment manufacturing, system integration to engineering implementation. Taking the 400 kV prefabricated cabin substation built and put into operation by TGOOD Electric Co., Ltd. in Qingdao, Shandong Province, in Oman as an example, this project adopts a modular integration scheme, consisting of four independently functional and systemically coordinated integrated prefabricated cabins. The overall structure is assembled from 24 standardized functional modules. All equipment is designed, manufactured, and systemically debugged domestically. After being transported to the site, rapid station construction is achieved through standardized module assembly, with the entire process compressed to half a year, significantly improving the efficiency and certainty of project delivery. It is understood that this project is the prefabricated cabin substation with the highest voltage level exported and the most comprehensive system integration scheme.McKinsey suggests that future infrastructure projects will place greater emphasis on whole-life cycle costs and system reliability, which will impose higher requirements on equipment suppliers' system integration capabilities, digitalization levels, and operation and maintenance service capabilities. Chinese enterprises have made continuous breakthroughs in digital design, remote operation and maintenance, and engineering delivery, providing support for their participation in international high-end projects. It is also understood that some domestic leading enterprises have orders scheduled until the end of 2027, and the delivery time for individual high-end models targeting data centers has even been postponed to 2029.
Upgrade development model to comprehensive solutions
Driven by the combined effects of rebounding global demand and enhanced domestic supply capacity, China's export structure of power equipment is undergoing accelerated optimization and upgrading, with the proportion of high-voltage, large-capacity, and system integration products continuously increasing.The "going global" of transformers is expected to gradually evolve from a cyclical opportunity into a medium-term industry trend, and research institutions are generally optimistic about the medium- and long-term development prospects of the industry. Guotai Junan points out that the global power grid investment cycle has begun, and coupled with the integration of new energy into the grid and the growth of load side, the demand for transformers and related equipment will remain high. Huatai Securities believes that enterprises with high-voltage manufacturing capabilities and overseas engineering experience will occupy an advantageous position in the new round of competition.
Third-party analysis institutions generally anticipate that the future industry development model will evolve from pure equipment exports to overseas production capacity layout, localized manufacturing, EPC general contracting, and technical cooperation. The proportion of single equipment exports will gradually decline, and "complete, modular, and systematic" products represented by prefabricated cabin substations will grow rapidly. At the same time, the integration of digital and intelligent functions will also drive the upgrading of power equipment from traditional hardware to comprehensive solutions comprising "hardware + software + services".
It is worth mentioning that, with the changes in the international trade environment and the tightening of technical standards, enterprises still face certain challenges in expanding overseas markets, including differences in certification systems, supply chain uncertainties, and geopolitical risks. In response, the industry suggests that we should further enhance our ability to independently control core technologies, strengthen the layout of localized services, and enhance our connectivity with international standard organizations and industry institutions to improve our compliance capabilities.
