The vision for the power grid in the Twelfth Five-Year Plan Outline

On March 16, the blueprint for China's 12th Five-Year Plan for economic and social development (hereinafter referred to as the 'Outline') was officially released. A close examination of the new round of national development strategic planning reveals that its ideas and directions have presented a broad future for the development of the State Grid Corporation.
Grid development carries a new mission.
After experiencing the baptism of the 11th Five-Year Plan, some deep-seated issues restricting the development of China's energy and electricity sector have received due attention. At this year's National People's Congress, there is a broad consensus on accelerating the development of ultra-high voltage and strong smart grids.
General Secretary Hu Jintao emphasized during the review of the Jiangsu delegation that we should actively adjust the energy structure and industrial structure, and accelerate the research and manufacturing of smart grid technologies and equipment. The government work report also outlined plans to promote changes in energy production and utilization methods.
The 'Outline' further proposes that to meet the requirements of large-scale inter-regional transmission and new energy grid-connected power generation, we should accelerate the construction of a modern grid system, further expand the scale of electricity transmission from the west to the east, develop ultra-high voltage and other large-capacity, high-efficiency, long-distance advanced transmission technologies, rely on advanced technologies such as information, control, and energy storage to promote smart grid construction, effectively strengthen urban and rural grid construction and transformation, and enhance the grid's ability to optimize power allocation and supply reliability.
The development foundation of the 'One Special Four Major' strategy has been further solidified. In terms of optimizing energy development layout, the 'Outline' emphasizes coordinating national energy development layout and key construction, building five national comprehensive energy bases in Shanxi, Ordos, eastern Inner Mongolia, southwestern regions, and Xinjiang, with a focus on developing nuclear power in some eastern coastal and central regions. It aims to improve local processing and conversion levels of energy resources to reduce pressure from large-scale, long-distance transportation of primary energy. The proportion of non-fossil energy in primary energy consumption has reached 11.4%, marking its first inclusion in the five-year planning outline. This inevitably requires State Grid to fully leverage the 'network market' function of the grid to enhance its capacity for large-scale acceptance of clean energy generation.
A close reading of the '12th Five-Year Plan' reveals that at a micro level, there are rich and specific contents directly benefiting people's livelihoods. The 'Outline' lists the scope and focus of basic public services during the '12th Five-Year' period, including electrification in administrative villages and ensuring that all populations in areas without electricity have access to it. The 'Outline' points out that in new rural construction, comprehensive renovations should be made to unrenovated rural grids, and upgrades should be implemented for rural grids facing insufficient supply capacity due to rapid growth in electricity demand.
Company development takes new steps.
'The 12th Five-Year Plan' will be a critical period for China's economic and social development as well as a key time for accelerating economic structural adjustments and changing development methods. How can State Grid Corporation achieve more sustainable and healthier development?
On one hand, it is about fully leveraging the role of 'the hand of planning'. During the '12th Five-Year' period, deepening state-owned enterprise reform will continue to make new strides. China will promote strategic adjustments in state-owned economy, improve mechanisms for state capital entry and exit as well as reasonable flow, concentrating state capital in important industries related to national security and vital sectors of the national economy. China will also explore implementing classified management for public welfare-oriented and competitive state-owned enterprises.
On the other hand, 'the hand of the market' is also indispensable. For example, to ensure that electric power enterprises achieve healthy sustainable development, it is urgent to establish a scientific and reasonable electricity pricing mechanism. The good news is that during the '12th Five-Year' period, China will establish a resource product pricing mechanism that can flexibly reflect market supply-demand relationships, resource scarcity levels, and environmental damage costs to promote structural adjustments, resource conservation, and environmental protection.
For State Grid Corporation with grand ambitions, the '12th Five-Year Plan' provides a higher starting point and more effective action guidelines, bringing numerous good opportunities.
'Going out' remains open. The 'Outline' emphasizes that China should adhere to a combination of 'bringing in' and 'going out', balancing foreign investment with outward investment while enhancing capabilities for safely and efficiently utilizing both markets and resources. It should guide various ownership enterprises to orderly carry out overseas investment cooperation according to market orientation and enterprise autonomous decision-making principles. Currently, the company has established advantages and conditions for further expanding international operations; over the next five years, it aims to achieve greater breakthroughs.
A technology innovation system centered on enterprises needs to be accelerated. The 'Outline' points out that China should focus on guiding and supporting innovative elements to gather towards enterprises while increasing government support for technological resources directed at enterprises so that they truly become main players in research development investment, technological innovation activities, and application of innovative results. This means that companies must further leverage their role in supporting and leading technological innovation.
Energy conservation and emission reduction remain significant missions for companies. The 'Outline' states that we must implement a strategy prioritizing conservation while comprehensively enforcing total resource utilization control, bidirectional supply-demand regulation, differentiated management to significantly improve energy resource utilization rates while enhancing various resource security levels. This indicates that companies are actively building energy-saving service systems aligned with China's major policies.
In the next five years, State Grid Corporation must regard reform innovation as a powerful driving force for promoting scientific development within the company while adhering to market-oriented reform directions; it must use reform to promote development while focusing on resolving systemic contradictions affecting long-term corporate growth so as to better respond to future competition and challenges.