Investment Rating - The report assigns an "Overweight" rating for the industry [1][10]. Core Insights - Gansu has raised the capacity electricity price to 330 RMB/year.kW, and the spot clearing price cap has increased from 0.65 RMB/kWh to 1.0 RMB/kWh, highlighting the value of peak-shaving power sources [3][4]. - The report indicates that the previous cap on spot electricity prices limited the profitability of peak-shaving power sources, which has led to slow development of peak-shaving units and energy storage. The policy change is seen as a response to the rapid growth of new energy installations [4][5]. - By the end of 2024, China is expected to have 1,473 operational electrochemical energy storage stations with a total installed capacity of 62.13 GW/141.37 GWh [5]. - The report notes significant growth in thermal power performance for the first half of 2025, with companies like Gan Energy and Zhejiang Energy showing year-on-year increases in net profit and electricity generation [5]. Summary by Sections - **Electricity Price Changes**: Gansu's capacity electricity price has been raised to 330 RMB/year.kW, and the spot price cap has increased to 1.0 RMB/kWh, which is expected to benefit peak-shaving power sources [3][5]. - **Electricity Demand Growth**: National electricity load reached a historical high of 1.506 billion kW on July 16, 2025, with significant year-on-year increases in various regions [5]. - **Thermal Power Performance**: Companies in the thermal power sector reported generally positive performance in the first half of 2025, with notable increases in net profits for some firms [5].

Core Viewpoint - Shandong Province, known as the "first province of renewable energy," has initiated "Eight Major Actions" to address the challenges of renewable energy consumption and explore a new path for high-quality development in the sector [2][4]. Group 1: Actions and Goals - The Shandong government aims to optimize the ratio of solar and wind power installations from 3.2:1 to 2.6:1 by the end of the year, complete the renovation and approval of 20 million kilowatts of existing units, and add approximately 1 million kilowatts of compressed air storage and over 2 million kilowatts of electrochemical storage within the year [2][11]. - The "Eight Major Actions" include optimizing the structure of renewable energy installations, enhancing the power system's adjustment capabilities, accelerating the development of new energy storage, and stimulating the demand for green electricity [2][11]. Group 2: Current Challenges - Shandong has experienced a significant increase in negative electricity prices, rising from 19 hours during the same period last year to nearly 50 hours this year, highlighting the urgency of addressing renewable energy consumption issues [4][10]. - The province's renewable energy and clean energy installations exceed 51%, with solar power leading nationally and wind power ranking fifth, yet the rapid growth has led to consumption challenges [4][5]. Group 3: Historical Context and Development - Shandong's solar power capacity was only 4.55 GW at the end of 2016, ranking lower than several other provinces, but has since become the leading province in solar power installations due to strategic policy initiatives and resource advantages [5][6]. - The province began large-scale distributed solar development in 2017, four years ahead of the national promotion, which has contributed to its current leading position in solar energy [6]. Group 4: Future Directions - The province's strategy includes reducing the proportion of solar installations while increasing wind power capacity, a policy termed "heavy wind, light solar," to alleviate the pressure on the power system [11]. - Shandong plans to enhance the flexibility of existing coal-fired power plants, with a goal of completing the renovation of 20 million kilowatts of units by 2025, to support renewable energy consumption [12]. - The development of energy storage solutions, including compressed air and electrochemical storage, is emphasized, with specific targets for new installations in the coming years [13]. Group 5: Infrastructure and Market Reforms - The enhancement of the power grid is crucial for improving renewable energy consumption capabilities, with plans to strengthen the provincial and municipal grid structures and optimize grid operation [14]. - The transition to a new type of power grid that accommodates renewable energy's variability is essential, requiring high-precision forecasting and flexible intelligent systems [14].

Core Insights - The first "20 megawatt-hour new type filling bed thermal storage system" auxiliary peak-shaving project has been officially put into operation at Huadian Shanxi Shuozhou Thermal Power Company, addressing the flexibility issues of coal-fired power generation units [1] - This project represents a significant technological breakthrough in the field of flexibility transformation for coal-fired units, moving beyond traditional power generation and heating models [1] - The new thermal storage system enhances the efficiency and economic viability of thermal power peak-shaving by storing produced thermal energy during low electricity demand periods and releasing it during peak demand for heating or power generation [1]