Report Industry Investment Rating The report does not mention the industry investment rating. Core View of the Report In 2026, the power market is expected to maintain a pattern of loose supply and demand, and the downward pressure on electricity prices remains. On the supply side, thermal power is still in the peak production period, and the new installed capacity of wind and solar power will still reach about 300GW but with negative year - on - year growth. On the demand side, the growth rate of全社会 electricity consumption is expected to moderately rebound to about 5.4%. Electric energy prices are expected to continue to decline, while non - electric energy prices may rise slightly. Regional electricity prices will show differentiation [2][70][71]. Summary According to the Directory 1. 2025 Power Market Review - **Power Supply**: The growth rate of power generation has slowed down. From January to October, the power generation of above - scale enterprises increased by 2.3% year - on - year. The new installed capacity of power equipment was about 397.84 million kilowatts, a year - on - year increase of 42.6%. New energy and thermal power were the main sources of installed capacity growth. The utilization hours of thermal power units decreased [6][14]. - **Power Demand**: The growth rate of electricity consumption slowed down. From January to October, the total electricity consumption of the whole society was about 8.62 trillion kilowatt - hours, a year - on - year increase of 5.1%. The electricity consumption rhythm was significantly affected by temperature. The growth rate of electricity consumption in the secondary industry was under pressure, while that in the tertiary industry and residents' living increased relatively fast [17][18]. - **Power Price**: Most provincial electricity prices continued to decline. From January to November, only 9 provinces such as Inner Mongolia West, Qinghai, and Ningxia saw year - on - year increases in the industrial and commercial agency power purchase prices, while the rest showed varying degrees of decline [23]. 2. Power Supply and Demand Outlook - **Power Supply**: In 2026, thermal power will still be in the peak production period, with an expected new installed capacity of about 103GW, a year - on - year increase of 12%. The new installed capacity of wind and solar power will total about 300GW, but the growth rate will decline. The new installed capacity of hydropower and nuclear power is expected to be about 23GW and 12GW respectively [26][30][33]. - **Power Demand**: The power consumption elasticity coefficient is expected to rise slightly to about 1.1. With a GDP growth expectation of 4.7%, the growth rate of全社会 electricity consumption in 2026 is expected to reach about 5.4%, showing a moderate rebound [35]. - **Supply - Demand Balance**: The marginal surplus of electric energy may continue. The utilization hours of thermal power units are expected to decrease, and the power generation of hydropower, wind power, and nuclear power is expected to increase [39]. 3. Key Regional Electricity Price Outlook - **Overall Situation**: Electric energy prices may remain weak, while non - electric energy costs are expected to rise. The cost of capacity electricity price is expected to increase significantly, and the impact of auxiliary service costs on the terminal electricity price is relatively limited [43][46]. - **Guangdong**: In 2026, the medium - and long - term electricity price will likely operate near the floor price, and the marginal change is limited. The spot price center is expected to move down slightly. The increase in non - electric energy costs is relatively limited, and the industrial and commercial electricity price is expected to decrease by 15 - 20 yuan/MWh [50][54]. - **Shandong**: The spot electricity price is expected to remain weakly volatile. The medium - and long - term electric energy price is expected to drop to 330 - 340 yuan/MWh. Due to the increase in non - electric energy costs, the overall electricity cost reduction is about 10 - 15 yuan/MWh [55][59]. - **Inner Mongolia West**: The electricity price is expected to continue to decline, mainly driven by the continuous development of new energy. The cancellation of the risk prevention mechanism may further drive down the electricity price. Non - electric energy costs have little impact on the terminal electricity price [62][63]. - **Shanxi**: The decline of electric energy prices is limited. The non - electric energy costs will increase significantly. The terminal industrial and commercial electricity price is expected to increase slightly by about 10 yuan/MWh [69]. 4. Summary In 2025, the power market was in a pattern of loose supply and demand, and electricity prices generally declined. In 2026, this pattern is expected to continue. Electric energy prices are expected to continue to decline, while non - electric energy prices may rise slightly. Regional electricity prices will show differentiation [70][71][72].

Core Viewpoint - The construction of a unified national market is essential for establishing a new development pattern, as emphasized by General Secretary Xi Jinping in various writings, highlighting the need for a high-standard market system and effective market rules [1][2]. Group 1: Importance of a Unified National Market - The unified national market is a fundamental requirement for leveraging China's large-scale market advantages, facilitating resource integration and maximizing scale and agglomeration effects [2][3]. - A unified electricity market is a critical component of the national unified market, promoting the optimization of electricity resource allocation and ensuring energy security [2][3]. Group 2: Support for Domestic Circulation - The new development pattern is centered around domestic circulation, supported by a unified national market, which enhances the accumulation of social wealth and national strength [3][4]. - Electricity is vital for smooth domestic circulation; a fragmented electricity market can increase resource allocation costs and hinder the effectiveness of the unified market [3][4]. Group 3: Energy Security and Economic Stability - Accelerating the construction of a unified electricity market is crucial for maintaining energy security and economic stability amid complex international environments [4][5]. - The unified electricity market will enhance the resilience of the energy system and support the development of strategic emerging industries [4][5]. Group 4: Green and Low-Carbon Transition - The electricity sector plays a key role in achieving China's dual carbon goals, and a unified market is necessary for large-scale consumption of green electricity [6][7]. - The construction of a unified electricity market will facilitate the integration of carbon and electricity markets, promoting a green and low-carbon transition [6][7]. Group 5: Progress in Electricity Market Construction - The electricity market has seen significant growth, with market transactions increasing from 1.1 trillion kWh in 2016 to 6.2 trillion kWh by 2024, representing a rise from 17% to 63% of total electricity consumption [8]. - The market structure is evolving, with over 800,000 market participants and a growing number of new business models emerging [7][8]. Group 6: Future Directions for Market Development - The construction of a unified electricity market requires the establishment of unified rules, infrastructure, and regulatory mechanisms to ensure efficient operation and coordination [9][10]. - Expanding market openness and enhancing international cooperation in energy will strengthen China's position in global energy governance [11].

Core Viewpoint - The second International Energy Sustainable Development (ESG) Forum was successfully held in Chongli, focusing on energy cooperation and sustainable development in the context of the Belt and Road Initiative [1] Group 1: Reports and Findings - The "Belt and Road Countries Energy and Power Development Report (2025)" was released, providing a comprehensive overview of energy development across Asia, Europe, Africa, and America, addressing resource endowments, energy supply-demand patterns, and energy transition policies [1] - The "Electric Power Industry ESG System Construction Research" report outlines the current status, achievements, and challenges of ESG development in the electric power sector, proposing policy recommendations to foster a collaborative governance framework [1] - The "New Energy Market Participation Series Research" report highlights the inadequacies of current market mechanisms in reflecting the multi-dimensional value of new energy, emphasizing the need for improved market structures [2][3] Group 2: Recommendations for Market Improvement - Recommendations include establishing a long-term market trading mechanism tailored for new energy generation characteristics and optimizing cross-regional trading methods [3] - The auxiliary service market should expand new service categories and improve cost-sharing and price transmission mechanisms to enhance market participants' adjustment capabilities [3] - The capacity market needs to be refined to ensure comprehensive capacity guarantees and to explore compensation methods suitable for new energy [3] Group 3: ESG Evaluation Framework - The "2025 China Energy Listed Companies Sustainable Development (ESG) Evaluation Report" introduces a comprehensive evaluation system with 37 quantitative and 43 qualitative indicators, incorporating key financial metrics for the first time [4] - The evaluation was conducted on 632 energy sector listed companies across major exchanges, with a focus on sustainable development indicators [4]

Core Viewpoint - The Guangdong Electric Power Trading Center has announced the first batch of virtual power plant operators, marking a significant step in the development of the virtual power plant market in Guangdong, with plans for resource aggregation trading starting in 2025 [2][4][11]. Group 1: Announcement of Virtual Power Plant Operators - The Guangdong Electric Power Trading Center published the list of the first ten companies included in the virtual power plant operator directory, which includes Guangdong Electric Power Investment Co., Ltd., Guangdong Yuedian Power Sales Co., Ltd., and others [2][5]. - The registration period for these operators was from August 19, 2025, to September 18, 2025, with no objections received during the public notice period [4][5]. Group 2: Resource Aggregation Trading - The notice outlines the commencement of resource aggregation trading for power generation, which will officially start on September 22, 2025, with subsequent trading for 2026 to be announced later [11][12]. - The trading participants must include registered operators with independent access points for solar, wind, and independent storage resources connected at voltage levels of 10 kV and below [11][12]. Group 3: Trading Process and Requirements - The trading process involves several steps, including registration of distributed projects, aggregation trading, and submission of transaction unit information for approval [12]. - The trading will focus on the energy output and green certificates from the aggregated resources, with contracts being signed on a monthly basis [12][13].

Group 1 - The core viewpoint of the article emphasizes the importance of optimizing the electricity market system in China, particularly through the implementation of the "Guidelines" issued by the National Development and Reform Commission and the National Energy Administration [2][3] - The article highlights the significant achievements in electricity market construction since the pilot of the electricity spot market began in 2017, noting that while progress has been made, there is still a gap to mature market standards [2][3] - The "Guidelines" aim to enhance the operational management level of the electricity market and provide a reference for regions that have not yet achieved continuous operation of the electricity spot market [2][3] Group 2 - The "Guidelines" propose strengthening the connection between long-term and spot market trading mechanisms to address the issue of price discrepancies that create arbitrage opportunities, thereby promoting fair trading [3][4] - The article discusses the need to improve the integration of energy and ancillary service market trading mechanisms, as the demand for ancillary services has rapidly increased in the new power system [4][5] - It emphasizes the importance of connecting wholesale and retail markets to ensure transparent pricing and effective transmission of market prices to end users [4][5] Group 3 - The article outlines the necessity of aligning the electricity market with the construction of a new power system, focusing on optimizing market mechanisms for renewable energy integration and establishing reliable capacity compensation mechanisms [5][6] - It stresses the importance of not only building a robust market but also ensuring effective management of market operations, including standardizing operational processes and enhancing technical support capabilities [6][7] - The "Guidelines" call for the regulation of market interventions to maintain order and competition, while also advocating for innovative regulatory approaches to improve market oversight [7][8]

Core Insights - The article highlights the significant progress made in China's energy sector since the implementation of the "14th Five-Year Plan," focusing on market-oriented reforms that enhance the vitality and dynamism of the energy market [1][2][3]. Group 1: Energy Price Mechanism - The energy price formation mechanism has been rapidly improved, with coal, new energy, and other sources entering the market, allowing most electricity prices to be determined by market competition [1]. - The pricing for all users, except residential and agricultural electricity, has become fully market-oriented, transforming electricity into a freely tradable commodity [1]. Group 2: Energy Market System - A multi-layered, multi-category, and multi-functional national unified electricity market system has been established, covering medium to long-term and ancillary service market transactions [1][3]. - The spot market is being rapidly rolled out across the country, with seven regions already operational, creating the world's largest "electricity supermarket" [1][3]. Group 3: Innovation in Energy Industry - The National Energy Administration has strengthened top-level design and increased policy supply to promote new business entities, virtual power plants, and green electricity connections [2]. - The total scale of virtual power plants has exceeded 35 million kilowatts, equivalent to the installed capacity of one and a half Three Gorges power stations [2]. Group 4: National Unified Electricity Market - The construction of a national unified electricity market has made substantial progress, establishing a diverse and functional market structure [3]. - A comprehensive "1+6" basic rule system has been developed to address previous fragmentation and regional barriers, ensuring transparency and fair competition in the market [3]. Group 5: Market Scale and Participation - The trading volume of electricity in the market has increased from 10.7 trillion kilowatt-hours during the "13th Five-Year Plan" to 23.8 trillion kilowatt-hours, more than doubling [4]. - A diverse market structure has emerged, with various stakeholders, including coal, new energy, gas, nuclear, and hydropower actively participating [4].

Core Viewpoint - The press conference highlighted the significant achievements in high-quality energy development during the "14th Five-Year Plan" period, emphasizing the establishment of a national unified electricity market as a key initiative in China's energy sector reform [1][2][3]. Group 1: National Unified Electricity Market Construction - The construction of the national unified electricity market system is accelerating, with a diverse and comprehensive market being established, including intra-provincial and inter-provincial trading, as well as various trading timeframes and types of services [1][2]. - The implementation of normalized cross-grid trading has been achieved, enhancing the integration of electricity supply across regions [1]. Group 2: Market Rules and Framework - The national unified electricity market rules have been largely completed, with a foundational "1+6" rule system established to address previous fragmentation and regional barriers, ensuring transparency and fair competition [2]. - The new framework allows electricity sales companies to operate nationwide with reduced operational costs through a single registration process [2]. Group 3: Market Scale and Participation - The scale of the electricity market has seen significant growth, with transaction volumes increasing from 10.7 trillion kWh during the "13th Five-Year Plan" to 23.8 trillion kWh, representing more than a doubling of market activity [3]. - The proportion of electricity traded through the market has risen from 40% in 2020 to over 60% for four consecutive years, indicating a robust market participation [3]. - A diverse range of market participants has emerged, including various types of power generation and commercial users, contributing to a well-structured market landscape [3].

Core Viewpoint - The construction of a national unified electricity market is a crucial support for building a new development pattern and is essential for deepening the reform of the electricity system and promoting the green and low-carbon transition of energy [1][4]. Group 1: Importance of National Unified Electricity Market - The national unified electricity market is a key component of the national unified large market and is vital for optimizing electricity resource allocation and facilitating energy transition [1][4]. - The electricity market serves as a hub for the conversion of primary and secondary energy, playing a central role in the energy system [1]. - The construction of this market can effectively address challenges such as energy security, green electricity consumption, and price guidance, which cannot be balanced in smaller regions [1]. Group 2: Progress and Achievements - Since the implementation of the new round of electricity system reform, the construction of the electricity market has progressed steadily, with a preliminary formation of a multi-competitive主体格局 [2]. - The market transaction scale has expanded year by year, with the national market transaction electricity volume increasing from 1.1 trillion kWh in 2016 to 6.2 trillion kWh 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, significantly contributing to high-quality economic and social development [3]. Group 3: Challenges and Areas for Improvement - Despite significant achievements, there are still gaps to address, such as existing trading barriers between different market levels and the need for further strengthening of multi-level electricity market coordination [3]. - The functions and trading varieties of the electricity market need to be enriched, and the policy mechanisms supporting large-scale development and market entry of renewable energy require improvement [3]. - Innovative market mechanisms are needed to enhance system adequacy and flexible adjustment capabilities [3].

Core Viewpoint - The implementation of the "Notice on Deepening the Market-oriented Reform of New Energy Grid-connected Electricity Prices" (Document No. 136) aims to clarify the trading rules and pricing mechanisms for new energy in both spot and medium-to-long-term markets, with varying execution policies across different provinces [1][2]. Group 1: Policy Implementation - Inner Mongolia and Xinjiang have already released implementation plans that require all new energy project grid-connected electricity to enter the market, establishing a sustainable pricing settlement mechanism [1]. - Shandong Province has issued draft proposals indicating that new energy projects will participate in market trading, which could significantly influence the national new energy market [2]. - There is uncertainty regarding the entry of distributed energy into the market, as some provinces have not clearly differentiated between centralized and distributed energy in their local policies [2][3]. Group 2: Market Dynamics - The Document No. 136 encourages a dual-track approach for spot and medium-to-long-term markets, allowing for price fluctuations between industrial peak prices and new energy cost returns [3]. - The current trend shows a significant decline in electricity prices in the spot market due to the increasing scale of new energy installations and falling coal prices, with some medium-to-long-term prices dropping to 20% below the benchmark price [3]. - The new policy stipulates that electricity included in the sustainable pricing settlement mechanism cannot simultaneously earn green certificate revenues, leading to a choice between compensation income and green certificate income for power generation companies [3][4]. Group 3: Green Certificate Market - The anticipated reduction in the availability of green certificates due to the new policy could significantly impact export-oriented companies and regions that rely on purchasing green certificates to meet renewable energy consumption responsibilities [4]. - The price of green certificates has surged from around 2 yuan per certificate in January to over 8 yuan following the release of Document No. 136, indicating a shift in market dynamics [4].