Core Viewpoint - The launch of a national unified electricity market in China is set to support the "dual carbon" goals and efficient energy allocation, indicating a profound transformation in the electricity system, accompanied by new challenges [1] Group 1: Challenges and Risks - The transition to a national electricity market may lead to resource siphoning from underdeveloped regions to developed ones, raising concerns about market efficiency and regional equity [1] - New market participants face uncertainty in market signals, particularly as renewable energy projects move away from guaranteed planning electricity, making investment decisions precarious [1] Group 2: Strategies for Adaptation - Participants need to enhance market adaptability and manage price volatility, with examples including adjusting production schedules to low-price periods and optimizing costs through time-based electricity pricing [1] - Companies must shift from passive acceptance to strategic participation in the market [1] Group 3: Institutional Framework - Activating diverse stakeholders and strengthening transparent regulation are crucial for breaking the zero-sum game, requiring more users to enter the spot market and ensuring fair and transparent rule mechanisms [2] - The transformation challenges not only technology but also the wisdom of institutional design and the strategies of various participants [2] - There is a need for further linkage between renewable energy development models and electricity market prices, with all players, including renewable energy companies, contributing to the overall reduction of electricity costs [2]

Group 1: Market Transformation - The southern regional electricity market has initiated continuous settlement trials, marking the arrival of the "electricity e-commerce era" in China [1][2] - The national unified electricity market is nearing completion, focusing on market-driven pricing and efficient resource allocation [1][4] - The electricity market is transitioning from a planned economy to a market-driven model, with dynamic pricing based on supply and demand [2][4] Group 2: New Opportunities and Challenges - The new trading model allows for price fluctuations, creating opportunities for companies to optimize electricity costs by purchasing cheaper green energy during peak production times [2][3] - Companies are adapting by shifting production to low-cost electricity periods, potentially reducing electricity costs by over 10% [3] - The rise of renewable energy sources is reshaping the electricity market, necessitating a shift from traditional power generation models to more flexible and efficient systems [6][7] Group 3: Industry Dynamics - The electricity market is experiencing a significant transformation, with resilience becoming a key focus as renewable energy sources increase [5] - The expansion of renewable energy capacity is expected to exceed 1.4 billion kilowatts by the end of 2024, surpassing traditional coal power for the first time [6] - The competition between traditional coal power and renewable energy is intensifying, requiring coal power companies to adapt their business models to remain competitive [7][8] Group 4: Technological Innovations - Virtual power plants are emerging as a new model, aggregating decentralized resources to enhance system efficiency and stability [11][12] - Data centers are evolving to integrate energy storage and management systems, contributing to the optimization of renewable energy utilization [12] - The development of smart microgrids and virtual power plants is expected to be supported by new policies in the near future [13]

Investment Rating - The report maintains an "Overweight" rating for the public utility industry, expecting the industry index to outperform the market index by over 10% in the next six months [47]. Core Insights - The public utility index increased by 1.0% over the past two weeks, underperforming the CSI 300 index by 2.2 percentage points, ranking 28th among 31 industries [6][13]. - Year-to-date, the public utility index has decreased by 0.02%, also underperforming the CSI 300 index by 0.9 percentage points, ranking 23rd among 31 industries [6][13]. - Among the sub-sectors, the heating service sector rose by 6.4%, photovoltaic power generation by 5.2%, and electric energy comprehensive services by 3.3% in the last two weeks [15]. - The report highlights significant developments in the southern regional electricity market, marking a key step towards a unified national electricity market [42]. Summary by Sections 1. Market Review - As of July 3, the public utility index has seen a 1.0% increase in the last two weeks, while the CSI 300 index has outperformed it by 2.2 percentage points [6][13]. - The sub-sectors showed mixed performance, with five sectors rising and two declining [15]. 2. Industry Valuation - The public utility sector's price-to-earnings (P/E) ratio is 18.5 times, with the photovoltaic sector at 747.3 times, indicating a significant valuation disparity [20][21]. 3. Industry Data Tracking - The average price of Shenxi Yulin block coal (Q6000) was 596 RMB/ton, up 2.4% from the previous value, while Qinhuangdao port coal (Q5500) averaged 613 RMB/ton, up 0.4% [32][33]. 4. Key Company Announcements - China Nuclear Power reported a 15.65% year-on-year increase in cumulative power generation for the first half of the year [40]. - Longyuan Power announced a 23.58% decrease in power generation for June compared to the previous year [40]. 5. Key Industry News - The southern regional electricity market's continuous settlement trial was launched, aiming to optimize electricity resource allocation across provinces [44]. - The State Council emphasized encouraging private capital participation in water and electricity infrastructure projects [44]. 6. Industry Weekly Perspective - The report suggests focusing on companies like Huadian International and Guodian Power due to the decline in average coal prices [42].

2025年过半，中国全国统一电力市场建设迈出关键一步。 6月底，中国南方区域电力市场启动连续结算试运行，从之前只是按周、按月等短期开展交易变成 可以每天不间断交易。现在，买卖双方可以在这个"电力超市"里根据需求随时跨省区买卖电力。 （来源：中国新闻网） 由此，价格"指挥棒"将发挥作用。以海南与广东联络线为例，南方区域市场结算试运行期间，联网 线路日均交互送电近1000兆瓦时，且呈现夜间海南负荷需求大、广东送电海南，中午时段海南光伏 大发、海南送电广东的特性。 统一电力市场建设，也将进一步解决中国新能源跃升发展带来的消纳需要。 华北电力大学国家能源发展战略研究院执行院长王鹏对中新社记者表示，近年来中国推动新能源跃 升式发展，但西部地区新能源大基地的风光消纳面临困难。统一电力市场有助于新能源全国范围内 合理流动，形成适合中国国情、有更强新能源消纳能力的新型电力系统，有助于能源清洁低碳转 型。 就南方电网区域电力市场来看，通过利用各省区的供需时段和调节性能差异，可以在更大范围内自 动适应新能源发电的随机性与波动性。2024年11月，在新能源大发的情况下，南方电网区域全网 新能源利用率达到99.21%。 对进一步建设 ...

南方区域电力市场交易范围覆盖广东、广西、云南、贵州、海南等地，市场注册主体数量超22万 个。转为连续结算后，预计日均交易规模达到38亿千瓦时；"高峰高价、低谷低价"，市场将释放更 真实、更连续的价格信号，提升电力资源的优化配置效率。 （转自《人民日报》） 28日，经过35个月的前期准备和12轮的短期试运行测试，南方区域电力市场正式转入连续结算试 运行阶段。从之前按周、按月等短期开展交易变成可以每天不间断交易，双方根据需求随时跨省区 买卖电力。这是全国统一电力市场初步建成的重要标志性成果。 根据相关规划，到2025年，全国统一电力市场初步建成，电力市场顶层设计基本完善，实现全国基 础性交易规则和技术标准基本规范统一。 （丁怡婷） ...

Core Viewpoint - The construction of a unified national electricity market in China is accelerating, with a goal to be fundamentally established by the end of this year, as stated by the General Manager of State Grid Corporation, Pang Xiaogang [1]. Group 1: National Electricity Market Development - The establishment of a unified national electricity market is a key task in deepening electricity system reform and building a unified national market [1]. - By July 2024, the Central Committee's decision on further deepening reforms aims to enhance energy management and establish a unified electricity market [1]. - The "National Unified Electricity Market Development Planning Blue Book" aims for a preliminary establishment of the market by 2025, with basic design and unified trading rules and technical standards [1]. - By 2029, the goal is to fully establish the national electricity market, promoting unified market rules, fair regulation, and high-standard connectivity of market facilities [1]. Group 2: Electricity System Transformation - The Chinese electricity system is undergoing significant transformation due to the substantial increase in renewable energy, affecting the characteristics of power sources and the operation of the grid [2]. - The focus is on enhancing the resilience of the grid, with research on preventing large-scale power outages and improving grid stability management [2]. - The company is also enhancing the construction of both the main grid and distribution networks to address previous weaknesses and improve operational technology [2]. Group 3: Technological Innovation and Renewable Energy - Innovation is crucial for the development of the electricity system, with ongoing research in operational simulation control and advanced technologies like superconducting transmission and long-distance flexible DC transmission [2]. - As of now, the installed capacity of wind and solar energy in the State Grid's operating area exceeds 1,325 GW, accounting for 46.9% of total installed capacity, making it the largest power source [2]. - To address the intermittent and volatile nature of renewable energy, the company is developing pumped storage power stations and upgrading coal power plants for flexibility and cleanliness [2].

Core Viewpoint - The establishment of a national unified electricity market is a crucial component of the broader national market, essential for promoting energy transition and optimizing electricity resource allocation [1][5]. Group 1: Market Development - The national market for cross-provincial and cross-regional electricity trading is projected to reach 1.4 trillion kilowatt-hours by 2024, a tenfold increase since 2016 [2]. - The total marketized electricity trading volume increased from 1.1 trillion kilowatt-hours in 2016 to 6.2 trillion kilowatt-hours in 2024, rising from 17% to 63% of total electricity consumption [2]. - The electricity market has effectively played a role in ensuring supply, promoting transformation, and stabilizing prices, contributing significantly to high-quality economic and social development [2]. Group 2: Policy and Regulation - Since the new round of electricity system reform, a multi-layered market framework has been established, covering inter-provincial and intra-provincial transactions, as well as various trading periods and types [1]. - The basic rules for electricity market operation have been revised, and a series of supporting regulations have been developed to unify the market's operational standards [1][4]. Group 3: Renewable Energy Integration - Over 50% of the national renewable energy generation is expected to be consumed through market mechanisms by 2024, maintaining a utilization rate of over 95% despite rapid growth in installed capacity [3]. - The trading volume of green certificates and green electricity reached 446 billion kilowatt-hours in 2024, a year-on-year increase of 364%, with about one-quarter of renewable energy achieving environmental value through this market [3]. Group 4: Future Outlook - By 2025, the goal is to establish a preliminary national unified electricity market with basic regulatory and technical standards unified, and by 2029, to fully build the national unified electricity market [4]. - The construction of a national unified electricity market is seen as a vital support for the new development pattern and a necessary choice for promoting green and low-carbon energy transition [5].

绿电直连政策以制度创新"四应"国家大局 绿电直连是风、光、生物质等新能源通过直连线路向单一电力用户供给绿电，实现电量清晰物理溯 源的模式。国家发展改革委、国家能源局不循旧历，联合 印发《关于有序推动绿电直连发展有关事 项的通知》（以下简称《通知》） ，实现 "四应"，即呼应社会诉求、响应行业发展、回应系统安 全、顺应电力改革，以制度创新服务国家大局，助推新质生产力发展，凸显了国家发展改革委、国 家能源局的政治机关意识和服务型政府责任担当。 一、呼应社会诉求快速出台政策 为此，《通知》从四个方面对加强规划引领进行部署。 一是在项目建设上区分四种情形 ， 对存量 负荷、新增负荷、出口外向型企业、新能源消纳受限等情况，分门别类予以规范。特别是对具有自 备电厂的存量负荷，提出足额清缴可再生能源发展基金前提下的绿电直连实施路径。 二是在规划统 筹上强调 "三入" ， 即风光发电规模要计入省级新能源发电开发建设方案，项目建设方案要纳入省 级或城市的能源电力和国土空间规划，特殊情况接入 220（330）千伏电网的要纳入电力系统安全 风险专项评估范畴。 三是模式创新上强调三个明确 ， 主责单位明确，原则上由负荷作为绿电直连 ...

政策持续加码，推动电力现货市场建设步伐显著加快。近日，国家发改委办公厅、国家 能源局综合司发布的《关于全面加快电力现货市场建设工作的通知》（以下简称《通知》） 明确了电力现货市场建设时间表和路线图，标志着我国电力现货市场建设驶入快车道。 业内认为，这一政策是落实党的二十大关于构建全国统一大市场战略部署的重要举措， 意味着我国电力市场化改革迈向更深层次、更广范围的全面加速阶段。 市场建设步入快车道 《通知》指出，湖北电力现货市场要在2025年6月底前、浙江电力现货市场要在2025年 底前转入正式运行，安徽、陕西力争在2026年6月底前转入正式运行。2025年底前，福建、 四川、辽宁、重庆、湖南、宁夏、江苏、河北南网、江西、河南、上海、吉林、黑龙江、新 疆、蒙东、青海要启动现货市场连续结算试运行。南方区域电力现货市场要启动连续结算试 运行，京津冀电力市场要创造条件启动模拟试运行，省间现货市场要实现发电企业参与省间 现货购电，并加紧研究售电公司、电力用户直接参与省间现货交易的机制。 《通知》强调，电力现货市场连续运行一年以上，且经第三方评估满足《电力现货市场 基本规则（试行）》规定的正式运行启动条件的，可按程序转入 ...

Investment Rating - The report maintains an "Overweight" rating for the energy and power equipment sectors [7] Core Viewpoints - The acceleration of the national unified electricity market is driving the construction of ultra-high voltage (UHV) projects, which are essential for achieving interconnection within the national grid [2][19] - The construction of UHV is not only to meet renewable energy consumption but also to address long-term energy imbalances, with significant demand for long-distance transmission solutions [14][41] - The report anticipates a peak in approvals for UHV projects, with expectations of 5-6 direct current (DC) and 3-4 alternating current (AC) projects approved in 2025, a significant increase from 2024 [3][45] Summary by Sections UHV Project Acceleration - The report predicts that the pace of UHV project approvals will accelerate, with an expected average of 6-7 UHV projects starting annually during the 14th Five-Year Plan period [1][3] - The expected annual order volume for UHV projects is projected to reach approximately 46 billion yuan, a 182% increase compared to the average winning bid amount from 2020 to 2024 [3][14] Market Dynamics - The UHV equipment market is characterized by high barriers to entry and concentrated profits, with major equipment components accounting for 80% of the market share [5][15] - Key suppliers such as State Grid NARI, Pinggao Electric, China XD Electric, and XJ Electric are expected to benefit significantly from the upward cycle of the sector [6][15] Back-to-Back Projects - Back-to-back DC transmission projects are crucial for addressing the power interconnection needs of adjacent provinces with asynchronous grids, with 5-6 projects expected to be approved within the year [4][16] - The report highlights that suppliers of converter transformers and converter valves are likely to see significant benefits from these projects [4][16] Financial Projections for Key Companies - State Grid NARI is projected to generate net profits of 1.15-1.64 billion yuan from each conventional/flexible DC UHV project, with an estimated profit elasticity of 1.1-1.6% [6][18] - Pinggao Electric is expected to earn 0.84/1.05 billion yuan from each DC/AC UHV project, with a profit elasticity of 4.2%/5.3% [6][18] - China XD Electric is projected to earn 2.4/1.2 billion yuan from each DC/AC UHV project, with a profit elasticity of 10.1%/5.0% [6][18] - XJ Electric is expected to generate net profits of 0.66-0.99 billion yuan from each conventional/flexible DC UHV project, with a profit elasticity of 3.1-4.7% [6][18]