Group 1 - The core viewpoint of the articles emphasizes the importance of market reforms in promoting the high-quality development of renewable energy in Fujian Province, particularly through the establishment of a green electricity trading mechanism [1] - The implementation of the new pricing mechanism for renewable energy is expected to facilitate the direct connection of green electricity projects, such as waste-to-energy and data centers, enhancing the stability of supply and encouraging project development [1] - The acceleration of subsidy payments by "two networks" companies since July 2025 is anticipated to improve the cash flow situation for green electricity companies, potentially leading to a more rational capital expenditure approach and better free cash flow [1] Group 2 - The narrowing supply-demand gap for green certificates is expected to lead to an increase in the environmental value coverage of green electricity, with a supply contraction anticipated in 2024 and 2025 [2] - The price of green certificates is projected to rise, further enhancing the environmental value of green electricity, especially as major energy-consuming sectors face green electricity consumption ratio assessments starting in 2026 [2]

Core Insights - The report maintains a positive investment rating for the renewable energy sector, highlighting the stability of hydropower business models and the increasing value of green electricity in a low-interest-rate environment [1] - The assessment indicates a tightening of green electricity consumption requirements for key industries, which is expected to enhance the market value of green electricity [4][12] - The report suggests focusing on high-quality A/H share renewable energy operators with stable profitability as potential investment targets [30] Group 1: Renewable Energy Consumption Assessment - The National Development and Reform Commission has expanded the scope of renewable energy consumption assessments, tightening requirements for industries such as steel, polysilicon, and cement, with specific targets set for 2025 and 2026 [4][12][19] - The actual consumption responsibility weight for renewable energy in 2025 has increased compared to the expected targets for 2024, with an average increase of 1.77 percentage points for total consumption and 2.48 percentage points for non-hydropower consumption [17][18] Group 2: Green Certificate Market Dynamics - The supply of green certificates is expected to contract, with a significant inventory clearance anticipated by the end of 2025, which may lead to an increase in the market price of green certificates [5][21][22] - The average price of green certificates has shown a significant increase, with a 63.24% rise in April 2024 and an 18.12% increase in May 2025, indicating a recovering market [25][26] - The narrowing supply-demand gap for green certificates is projected to enhance the environmental value returns for operators, with a potential increase in revenue per megawatt-hour as the coverage rate improves [5][27] Group 3: Investment Recommendations - The report recommends focusing on renewable energy operators with strong asset quality and stable profitability, listing specific companies such as Longyuan Power, Xintian Green Energy, and Datang Renewable Power as beneficiaries of the evolving market dynamics [30][31]

Investment Rating - The industry investment rating is optimistic (maintained) [1] Core Insights - The report emphasizes the shift towards a more relaxed power supply and demand environment, highlighting the importance of stable profitability in the power industry [3] - The introduction of mandatory green electricity consumption ratios for high-energy-consuming industries is expected to stimulate the green certificate market and enhance its value [4][5] - The green certificate supply shock is anticipated to end by the end of 2025, leading to improved market conditions [12][13] Summary by Sections Supply - The supply shock caused by the issuance of green certificates is expected to conclude by the end of 2025, with a total of 47.34 billion green certificates issued in 2024, including 31.58 billion that are tradable [4][12] - The green certificate issuance is projected to grow, with estimates of around 25 billion in 2025 and reaching 40 billion by 2030 [20][21] Demand - The mandatory consumption policies for high-energy industries are likely to drive an increase in green certificate consumption, with only 14.12% of the issued certificates being traded in 2024 [5][24] - The electricity consumption of high-energy industries accounted for 27.32% of the total social electricity consumption in 2024, indicating significant potential for green certificate demand [5][27] Outlook - The green certificate market is expected to experience a recovery post-2025, with improved consumption policies likely to enhance trading volumes and prices [32] - The report suggests that the green certificate prices may return to reasonable levels, significantly boosting the profitability of renewable energy operators [6][34] Beneficiary Stocks - Recommended stocks include high-quality, low-valuation renewable energy operators such as Datang Renewable, Longyuan Power, China Power, and others [36][37]

Core Insights - The report maintains a positive investment rating for the power industry, emphasizing the shift towards a more relaxed supply-demand balance and the importance of stable profitability in the sector [1][7]. Supply - The supply shock caused by the issuance of green certificates (绿证) is expected to end by the end of 2025, as the market has achieved full coverage of green certificate issuance across various renewable energy sources [12][13]. - In 2024, a total of 4.734 billion green certificates were issued, with 3.158 billion being tradable, marking a significant increase compared to previous years [4][16]. - The green certificate market is anticipated to see a gradual improvement in supply-demand dynamics as the backlog of issued certificates begins to expire starting in 2026 [4][6]. Demand - The introduction of mandatory green electricity consumption requirements for high-energy-consuming industries is expected to drive growth in green certificate consumption [5][22]. - In 2024, the trading volume of green certificates was only 14.12% of the issued amount, indicating a lack of consumption momentum, but recent policies are expected to enhance this [5][24]. - High-energy industries accounted for 39.73% of total electricity consumption in 2024, with significant potential for increased green certificate demand as consumption requirements are enforced [27][28]. Outlook - The green certificate market is projected to experience a "pain period" in 2025, but with the easing of supply pressures and the implementation of mandatory consumption policies, prices are expected to stabilize [6][32]. - By 2030, the issuance of green certificates is expected to reach approximately 4 billion, driven by stable growth in renewable energy generation and increasing coverage rates [21][20]. Beneficiary Stocks - The report suggests selecting high-quality, low-valuation renewable energy operators as beneficiaries, including companies like 大唐新能源 (Datang Renewable), 龙源电力 (Longyuan Power), and 中国电力 (China Power) [36][37].