A Brief Discussion On The Main Development Trends in The Current Electric Power Industry (2026)

I. Overall Industry Logic
The industry as a whole is shifting comprehensively from scale expansion to high-quality, safe, low-carbon, and intelligent development. The core task is to build a new type of power system (coordinating generation, grid, load, and storage), while balancing the dual carbon goals and energy security.

II. Six Core Trends and Key Data

1. Power Generation Side: Renewable energy becomes dominant, traditional thermal power functions transform
1. Continuous surge in wind and solar: New installations in 2026 are expected to exceed 400 million kilowatts, with wind and solar accounting for more than 50% of total installed capacity. Photovoltaic installations will exceed coal power for the first time, becoming the largest power source.
2. Reshaping the role of coal power: Completely withdraw from the main supply position and shift to peak regulation, backup, and capacity support. The "three-linkage" renovation comprising energy efficiency improvement, flexibility improvement, and heat supply transformation will be fully implemented.
3. Optimization of energy structure: By the end of 2026, non-fossil energy installed capacity is expected to account for 63%, with power generation exceeding 45%. Hydropower and nuclear power, as stable baseload sources, will expand steadily.

2. Power Grid Side: Upgrading ultra-high-voltage backbone, popularizing smart distribution networks
1. Strengthening the backbone grid: Total grid investment during the 15th Five-Year Plan approaches 5 trillion RMB, with key layouts for transmitting power from West to East and inter-provincial renewable energy transmission channels. Flexible DC technology becomes mainstream, solving long-distance transmission losses and fluctuation issues of renewable energy.
2. Shift in distribution network focus: Investment in distribution network renovation accounts for over 50%, with unmanned substations, digital twin dispatch, and distributed grid integration adaptations fully promoted.
3. Accelerating market reforms: A nationwide unified power market is taking shape, with spot trading accounting for 30% and node-based electricity prices and ancillary service transactions becoming routine.

3. Energy Storage Side: Becoming a mandatory standard, multiple technological routes run in parallel
1. Supporting energy storage as a hard requirement: New renewable energy power plants generally include 15%-20% energy storage; standalone energy storage is officially integrated into the power revenue system and eligible for capacity price subsidies.
2. Rapid installation growth: By the end of 2025, new energy storage installations reach 140 million kilowatts, with a year-on-year growth of 84%.
3. Development direction: Wide adoption of liquid-cooled large cells and networked storage, with an increasing share of long-duration storage over 8 hours; the energy storage system is formed with pumped storage as the base, electrochemical storage as the increment, and virtual power plants as the supplement.

4. Digitalization Side: Comprehensive AI penetration, deep coordination of computing and electricity
1. Full-scenario intelligent implementation: AI is widely applied in grid dispatch, equipment inspection, fault warning, and load forecasting, significantly improving the digitalization rate of power equipment.
2. Widespread digital twins: Enable full-process simulation, real-time monitoring, and precise operation and maintenance of the grid, greatly enhancing grid stability and operational efficiency.
3. Computation-power integration as a new hotspot: Rapid growth of data center and AI computing loads makes green-power computing integration projects a new industry focus.

5. Market Side: Comprehensive restructuring of the electricity pricing mechanism

1. The peak-valley price difference continues to widen, highlighting the value of demand-side response and increasing the benefits of load regulation. 2. Capacity-based electricity pricing is being implemented comprehensively, covering coal power, pumped storage, energy storage, and other adjustable power sources, ensuring the stability of bottom-line power profitability. 3. Green electricity trading is booming, with large industrial factories and data centers as the core procurement entities, and green electricity maintaining a long-term premium space of 0.05-0.1 yuan per kWh.

6. Industrial end: Accelerating domestic substitution and improving the quality of equipment for overseas markets
1. The localization of core power equipment is speeding up, with breakthroughs in key components such as high-voltage IGBTs, bushings, and tap changers, targeting a domesticization rate of over 90% within three years. 2. Ultra-high-voltage, energy storage, photovoltaic inverters, and smart grid equipment lead global competitiveness, with overseas orders continuously increasing.

III. Core sectors in the next three years (priority order)
1. High-certainty essential sectors: new energy storage, smart grid retrofitting, new energy peak-shaving support services 2. High-growth emerging sectors: virtual power plants, green electricity trading, integrated computing and electricity, long-duration energy storage 3. Stable bottom-line sectors: flexible coal power, pumped storage, incremental nuclear power projects

IV. Industry summary
The power industry has moved away from the traditional "build power plants, expand the grid" approach. In the future, the core competition will be concentrated on four dimensions: low-carbon regulation capability, intelligent dispatch capability, market-based trading capability, and high-end equipment technology capability.