Investment Rating - The report maintains an "Overweight" rating for both the Utilities and Environmental sectors [6]. Core Viewpoints - The report emphasizes that the environmental value of green electricity is being re-evaluated due to the impending hard constraints of the Nationally Determined Contributions (NDC) by 2035, shifting China's climate action from intensity control to total reduction [16]. - It predicts that the demand for green electricity will not be less than 6.59 trillion kWh by 2035, with an average annual increase in wind and solar installations of 4.15 million kW from 2026 to 2035, significantly higher than the average of 2.61 million kW during the 14th Five-Year Plan [7][46]. - The report identifies three main lines of opportunity: benefiting green electricity operators and leading energy-intensive companies through direct connections to green electricity, the importance of green electricity self-sufficiency for energy-intensive leaders, and the potential of the green fuel sector under total reduction policies [5][6]. Summary by Sections Investment Recommendations - Recommended stocks include: - Longking Environmental (600388 CH) with a target price of 28.96 and a "Buy" rating - China Power (2380 HK) with a target price of 3.86 and a "Buy" rating - Three Gorges Energy (600905 CH) with a target price of 4.75 and a "Buy" rating - Longyuan Power (001289 CH) with a target price of 19.44 and a "Buy" rating [3]. Market Perspective - The report contrasts with market consensus, which views NDC as a long-term concept with limited short-term impact. It argues that the countdown to carbon peak from 2028 to 2030 is only 2-4 years away, making NDC a potential annual assessment constraint [4][13]. - It highlights that the supply-demand dynamics for green certificates have reversed, with a significant increase in demand expected by 2030, reaching 3-3.3 billion certificates [14]. Policy Impact - The report notes that policies have reshaped the supply-demand structure for green certificates, with a significant reduction in effective supply due to new regulations [8]. - It predicts that the price of green certificates could double, significantly enhancing the revenue for green electricity operators and reconstructing the valuation framework for the sector [6][9]. Carbon Emission Projections - The report estimates that carbon emissions will peak between 11.4 and 11.8 billion tons CO₂e from 2028 to 2030, with a projected reduction of 7.2% to 8.4% by 2035 compared to peak levels [19][21]. - It emphasizes that coal consumption will peak during the same period, while natural gas consumption is expected to rise [32][37]. Green Electricity Demand - The report asserts that the actual demand for green electricity will exceed expectations, with a projected total capacity of 36 billion kW by 2035, which is only the baseline requirement [46]. - It anticipates that the cumulative increase in wind and solar installations could reach 415 million kW over the decade from 2026 to 2035, with a compound annual growth rate of 13.8% [46].

Core Insights - The electricity spot market is a key focus for high-quality development, with nuclear power and coal power transformation competing within the same ecological niche [1][2] - The primary driver for the growth of renewable energy is the Nationally Determined Contributions (NDC), while technological advancements play a secondary role [3] Group 1: Electricity Reform - There is no perfect template for electricity reform; a new type of production relationship is needed, with green electricity consumption as the main line and safety as the bottom line [1] - The issue of "energy trilemma" must be addressed, as water, wind, and solar all derive from the sun and require extensive mutual consumption [1] - A national unified electricity market needs to be established to facilitate this [1] Group 2: Electricity Spot Market - The electricity spot market is crucial for the high-quality development of renewable energy and ultra-high voltage systems [2] - The pricing system is shifting from a multi-track to a single-track system, with a transition from scalar to vector [2] - Key thresholds include: 15% renewable energy generation as a critical point for system cost increases, 15% as a point for grid prosperity, and 20% as a point for increased demand for flexible resources [2] Group 3: Growth of Renewable Energy - The growth of renewable energy primarily stems from NDC, followed by technological progress [3] - Investment recommendations include: 1. Secondary equipment from a grid safety perspective 2. Flexible resources such as nuclear power, coal power transformation, gas turbines, solar thermal, hydroelectric transformation, pumped storage, new energy storage, and user-side adjustments (virtual power plants, V2G, demand response) competing within the same ecological niche [3] 3. The construction of the electricity spot market requires improved metering infrastructure, including both electricity and carbon measurement [3]