China currently operates about 1.18 million kilometers of transmission lines, most of which are fairly old. The nation ran about 3 million Gigawatt hours of electricity through its grids in 2008, with 6.6 percent being lost during transmission, according to Shanghai Daily's report in September 2009. China's total power demand is expected to more than double by 2020.

Most of the nation's electricity is produced by coal-fired stations. Government officials hope to clean up the air by boosting the proportion of energy coming from renewable sources to 15 percent within 10 years.

Zhong suggested that with new grids, utility companies could install advanced metering that assists both commercial and residential customers in reducing peak-hour energy usage. New grids could also allow facilities to monitor usage and reduce outages.

"I hope the new upgraded grids will ratchet up China's investment in its power industry, which for years has suffered from under-funding and blackouts. Lack of investment also led to power lines collapsing in the south during the snow storms of 2008," Zhong said.

In Zhong's opinion, power grids should not only be more capable of handling alternative energy sources, such as wind and solar power, but that they should also meet the increasing demands in rural areas.

Power analyst Huang Shouhong at Essence Securities said China might need to spend up to 68 billion yuan (US$10 billion) annually to upgrade its grids. Investment on that scale would be positive for domestic industries related to power transmission, transformation equipment and automated product manufacturing.

China is now beginning to use ultra-high voltage (UHV) lines that allow for efficient electrical flow without significant loss. This type of transmission is especially useful in a country as vast as China where resources are plentiful but unevenly distributed.

Zhong suggests that to improve power supply and quality, the current rural electricity supply system needs large-capacity transformers and wires.

"More than 10 years ago, the design standard of transformation capacity was 2 to 4 kilowatts per household in rural areas. But as more color TVs, washing machines, refrigerators and air conditioners enter common farmers' houses, the standard should be improved to 8 to 10 kilowatts," Zhong said.