CICC: Overseas Power Supply and Demand Contradictions Are Prominent, Chinese Manufacturers Welcome Accelerated Overseas Expansion Window

China International Capital Corporation Research Report states that overseas data centers are facing a “power shortage” dilemma, with queue times in some congested regions of Europe and America reaching over 7 years. Grid capacity is now determining capital flows, with large developers focusing on Northern Europe, Southern Europe, and emerging markets. Meanwhile, in the US and Europe, some areas of the FLAP-D market are shifting from optional to mandatory backup power, and various new power supply solutions are being explored simultaneously. The supply and demand imbalance abroad is prominent, and Chinese manufacturers are entering a rapid export window, capturing high-elasticity market opportunities.

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CICC | AI “Power Exploration” (Thirteen): Solving the Overseas Data Center Power Search Dilemma

CICC Research

Overseas data centers are facing a “power shortage” dilemma, with queue times in some congested regions of Europe and America reaching over 7 years. We observe that grid capacity is increasingly influencing capital flows, with large developers paying attention to Northern Europe, Southern Europe, and emerging markets. At the same time, in the US and Europe, some areas of the FLAP-D market are shifting from optional to mandatory backup power, and multiple new power supply solutions are being explored simultaneously. The overseas supply and demand imbalance is prominent, and Chinese manufacturers are entering a fast-track export window, seizing high-elasticity market opportunities.

Summary

Power Supply Side: On-site power supply is the trend, with autonomous gas turbines breaking through exports. Gas turbines are the mainstream solution for on-site power, with global orders and prices rising by 2025. However, leading overseas manufacturers face tight supply, with lead times exceeding three years, making it difficult to meet rapid power needs. This presents market breakthrough opportunities for Chinese OEMs, with leading company Dongfang Electric achieving its first export of G50 autonomous gas turbines last year. Additionally, SOFC, SMR, geothermal systems, and other forms each have their own characteristics. We believe that combining “self-supply + grid” is a highly feasible future direction.

Grid Side: The global power cycle is large, with China’s transformer exports growing rapidly. As AIDC scales up to hundreds of megawatts and connection points reach high voltage levels requiring dedicated substations, long-standing issues like slow approval processes have constrained effective transmission in Europe and America. There is a supply gap in core equipment transformers; in 2025, China’s transformer exports will hit a new high. We are optimistic that Chinese companies with complete industrial chains and rapid delivery capabilities will continue to expand their markets.

Data Center Side: SST is expected to help AIDC achieve grid-friendly operation. On one hand, SST can adapt to power calculation and coordination scenarios, working with energy storage systems to provide auxiliary services like peak shaving and frequency regulation, enabling flexible grid interaction. On the other hand, relying on power electronics for rapid response and active control, SST can mitigate the impact of AI model training on the grid. We believe Chinese manufacturers with strong grid understanding and market channels are likely to stand out.

Risks

AIDC development falling short of expectations, changes in international trade policies, and shifts in new technological routes.

(Source: First Financial)