An industry report highlights the accelerating global expansion of China's small-scale gas turbines, which are becoming essential for addressing overseas off-grid power shortages. The analysis suggests focusing on companies poised to benefit from the international demand for off-grid power and China's push for technological self-reliance, including DONGFANG ELEC (HKG: 01072), China Power (SHA: 600482), and AECC Aviation Power (SHA: 600893). The key points from the report are as follows:

Recent Industry Developments

Two significant events underscore the sector's momentum. First, on the evening of June 3rd, the official account of China Shipbuilding 703 Institute announced that Guanghan Gas Turbine's domestically produced models have secured over one hundred orders. Second, on June 2nd, it was reported from DONGFANG ELEC's 2025 annual general meeting that the company has already signed contracts for 15 gas turbine units destined for overseas markets.

Capabilities of Leading Domestic Producers

Guanghan Gas Turbine specializes in the 3-50MW small and medium-sized gas turbine sector. Its CGT series turbines have found diverse applications, including in long-distance natural gas pipelines and offshore platforms. The CGT30 and CGT40 models boast single-unit efficiencies nearing 40%, reaching advanced levels for their power class. Meanwhile, the H25 series is widely used in industrial combined-cycle power generation and cogeneration projects, achieving a comprehensive energy utilization rate exceeding 90%.

DONGFANG ELEC's Breakthrough in Self-Reliant Technology

DONGFANG ELEC began developing its fully independent 50MW F-class gas turbine (G50) in 2009. The turbine achieved full-load operation successfully in 2020 and commenced commercial operation in January 2023, marking a pivotal breakthrough from concept to reality for China's gas turbine industry. Beyond the G50, the company launched a 15MW heavy-duty gas turbine (G15) suitable for cogeneration and distributed energy in July 2024. Furthermore, in September 2025, it unveiled a 15MW pure-hydrogen heavy-duty gas turbine (G15H) capable of zero-carbon combustion and stable, flashback-free operation across all conditions.

Global Market Trends Creating Export Opportunities

A significant trend towards off-grid power is emerging overseas, creating a prime export window for China's domestically controlled small-scale gas turbines. Since 2025, North America's power supply gap has drawn sustained market attention. In February 2026, a directive for internet giants to build their own power plants (off-grid generation) formally opened this export window. Overseas power demand is shifting from large-grid reliance to off-grid solutions, correspondingly driving a shift in turbine demand from high-power heavy-duty units to lower-power, lighter models. This shift is propelled by three key factors: the expansion of AI data center computing infrastructure, the power needs of industrial systems (such as mining, gas fracturing, and continuous chemical production), and a surge in demand for flexible power supply and emergency backup in island and off-grid scenarios.

Potential Risks to Consider

Investors should be aware of several risks, including the potential for overseas off-grid power demand to fall short of expectations, slower-than-anticipated development of AI-related power consumption, and increased competition from international rivals.