Analysis of Global Power Market

Analysis of China's Power Operation Market Market Drivers Drivers of Power Operation Market, China Influence Main Drivers (1-2 years) Influence (3-5 years) 1 Continuous Growth of Economy and Power Demand High High 2 Industrial Upgrading and Changes in Industrial Power Structure High High 3 Development of Power Transmission High Medium 4 5 сл Structural Reform of the Coal-fired Power Sector Favorable Financial Policies for Hydropower Sector High Medium Medium Medium 60 Development of NEV* Market and Rail Transit Medium High DRIVERS XEDS 7 Construction of Data Centre Medium High Description Drivers Favorable Financial Policies for Hydropower Sector Development of NEV Market and Rail Transit Construction of Data Centre As a renewable and clean energy source, hydropower received policy support from Chinese government and qualified hydropower enterprises are entitled to various financial support including VAT refund and encouraging financial institutions to reduce loan interest rates and appropriately extends the loan terms. These policies reduce the cost and cash flow pressure of hydropower enterprises and increase the profitability of hydropower enterprises. ➤ Driven by the continuous technological advancements and supportive policies, the NEV market is experiencing rapid growth in China. China is the largest NEV market in the world with sales volume of NEVS more than 1.25 million in 2018, indicating a CAGR of 57.3% from 2016 to 2018, and total ownership of more than 2.61 million by the end of 2018 according to the statistics from the CAAM. Also, the charging infrastructures are developing rapidly to meet the charging demand from NEVs, increasing the utilisation rate of NEVS. ➤ ➤ ➤ Additionally, China is actively promoting the development of rail transit. The total mileage of electrified railways increased from 80.3 thousand kilometers by 2016 to 91.7 thousand kilometers by 2018 according to the statistics from the NRA. The total mileage of urban railways, which are fully electrified, increased from 4,152.8 kilometers by 2016 to 5,761.4 kilometers by 2018. The electrification in the transportation sector is becoming an increasingly important driver for power consumption. In order to support the rapid development of advanced fields of IT industry, such as of Internet, cloud computing and big data, a large number of data centres have been built in China in recent years. The expansion of data centres will bring increasing demand for power. Driven by support policies and continuous technological innovations, the information technology industry in China will maintain a rapid growth in the future. The development of information technology industry will drive increasing demand for power. * NEV (New Energy Vehicles) includes electric vehicles and plug-in hybrid electric vehicles. Source: Frost & Sullivan FROST SULLIVAN 59

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