Investment Rating - The report assigns an "Overweight" rating for the industry [5]. Core Insights - The report highlights that in provinces with less renewable energy, there is a need for more long-term contracts, while provinces with more renewable energy may benefit from fewer long-term contracts and more spot market sales. The signing of contracts is expected to be concentrated in the last week, similar to the previous year [5]. - The electricity export plan for Yunnan in 2026 is projected to be 153.3 billion kWh, an increase from 145.2 billion kWh in 2025. The report notes a significant drop in coal prices, which may negatively impact long-term contract negotiations [5]. - The report indicates that electricity consumption driven by AI has surged, with a 43% year-on-year increase in electricity usage for internet data services from January to October this year. The total computing power scale is growing at an annual rate of approximately 30% [5]. - The latest incremental mechanism electricity prices are detailed, with Zhejiang's 2026 mechanism price at 0.3929 yuan/kWh, Chongqing's wind/solar prices at 0.3961/0.3963 yuan/kWh, and Qinghai's wind price at 0.24 yuan/kWh [5]. - The report discusses the integration of transportation and energy in Anhui, aiming for a non-fossil energy generation capacity of around 300,000 kW by 2027 along highways, and 500,000 kW by 2030 [5]. - In Qinghai, the proportion of long-term coal contracts is expected to decrease to 60% in 2026, with the average clearing price for various energy sources provided [5]. Summary by Sections - **Long-term Contracts**: The report emphasizes the need for long-term contracts in provinces with limited renewable energy and suggests that provinces with abundant renewable energy may achieve better returns by focusing on spot market sales [5]. - **Electricity Export Plans**: Yunnan's electricity export plan for 2026 is set at 153.3 billion kWh, indicating growth in external electricity supply [5]. - **AI and Electricity Consumption**: There is a notable increase in electricity consumption driven by AI, with a 43% rise in internet data service electricity usage [5]. - **Incremental Mechanism Prices**: The report provides specific mechanism electricity prices for various provinces, indicating a structured pricing approach for renewable energy [5]. - **Transportation and Energy Integration**: The integration plan in Anhui aims to enhance energy generation capacity along transportation routes, promoting the use of renewable energy [5]. - **Coal Contract Proportions**: The report notes a decrease in long-term coal contract proportions in Qinghai, reflecting a shift in energy market dynamics [5].