Electricity Market: Transmission Business Fails to Compete with Chinese Competitors

ABB's business in China's electric power sector encountered Waterloo. According to the results recently released by ABB, its investment in China's power industry maintained rapid growth, and its 2010 performance in China's power sector declined by 19%.

In this regard, ABB North Asia and ABB (China) Co., Ltd. President Fang Qin said: "ABB's challenge comes from a number of growing competitors, more and more competitors continue to emerge, the current market prospects in some areas It is not very clear, especially in the transmission industry."

He pointed out that the main part of the power business affecting ABB is the transmission business, and the development of the power distribution business is still good.

According to ABB's performance report, ABB (China) sales in 2010 were US$4.4 billion, a year-on-year increase of 3%. Among them, the automation business grew fastest, reaching 42%, but the power business became a “delayed” business segment, which fell close to 20%.

In particular in the transmission market, domestic competitors are besieged. In recent years, the market share of domestic companies has increased dramatically, and the market share of high-end transmission has exceeded the market share of foreign companies.

Data from XJ Electric shows that at present, in the UHV DC transmission project, the market share of Xuji's converter valve has reached 50%, and the market share of control and protection equipment has reached 75%.

A group of data from the National Grid and GF Securities is just an indication of the decline in ABB's transmission market: In the 500kV transformer market, ABB’s share fell from 26% in 2006 to 14% in 2009, and TBEA From 16% to 36%; the same time period, ABB accounted for 24% of the 200kV transformer market fell to 6%, while TBEA increased from 22% to 24%.

The data released by the State Grid also shows that among the three successful companies that were announced by the State in 2010 for smart grids, except that the circuit breakers were all obtained by Siemens, the rest were almost entirely absorbed by domestic companies. Among them, in the field of transformers, TBEA and China West have obvious advantages, with share of 40% and 33.3% respectively.

People in the industry believe that with the continuous breakthrough of core technologies in the field of power transmission and distribution, domestic transmission and distribution equipment manufacturing technologies have reached internationally advanced levels in some areas. At the same time, the State Grid Corporation of China will consider localization requirements when bidding, which will undoubtedly give Foreign and domestic electric equipment companies, including ABB, pose new challenges.

Faced with the strong siege of leading enterprises in the domestic and international electrical equipment industry, ABB has made strategic adjustments from product development, market development, and service business.

Fang Qin said that ABB will have several new factory construction projects this year, including the mine hoisting system and the Azipod green ship propulsion system factory. At the same time, it will expand more business in China, such as integrating analysis systems, opening up mid-markets, and formulating mid-market strategies.

Liu Xingang, head of ABB's power system department in North Asia and China, said that in the course of recovery of the power market in 2011, with the intensification of market competition, ABB will accelerate the process of localization, realize cost optimization and open up new channels. Increase the development and research and development of mid-market and develop products suitable for mid-market. At the same time, it strengthened its service and launched a comprehensive service business.

On February 23, 2011, Liu Xingang returned to ABB as the person in charge of power systems in North Asia and China. Liu Xingang worked in ABB China's power business for 9 years before returning to ABB to work at Westinghouse Electric.

Strengthening cooperation with the government and the domestic power grid will be a major focus of ABB's 2011 strategy. It is understood that on February 17, 2011, ABB Group cooperated with China Southern Power Grid to design, manufacture, install and debug 800 kV UHV DC for a converter station for Yunnan Uzada-Guangdong UHVDC power transmission project. Transformer equipment.

In fact, at the end of 2010, heads of multinational corporations such as ABB and Siemens paid frequent visits to the China Southern Power Grid and the State Grid, and the smart grid meals invested by trillions of yuan in China’s power grid upgrades.