Investment Rating - The report maintains a "Positive" investment rating for the utility sector [12] Core Insights - The Chinese government reiterated its "dual carbon" goals, emphasizing the implementation of dual control over carbon emissions and intensity, which will impact the electricity sector significantly [2][6] - The electricity industry, being the first sector included in the carbon market, has undergone multiple compliance cycles, with a projected 1% decrease in baseline allocation values for carbon emissions in 2023 [6][18] - The tightening of carbon emission controls is expected to affect both thermal and green electricity differently, with potential implications for investment strategies [6][18] Summary by Sections Carbon Emission Control - The baseline allocation for carbon emissions in the electricity sector is set to decrease by 1% in 2023, considering the progress of the "14th Five-Year Plan" [6][18] - The pressure on thermal power generation to reduce emissions has been evident, with a notable increase in carbon emissions intensity in 2024 due to increased reliance on thermal power for peak load management [7][19] Green Electricity Market - The establishment of a green electricity trading system since 2021 has faced challenges due to insufficient demand, but upcoming regulations are expected to significantly increase the demand for green certificates [9][31] - By 2025, the consumption ratio of green electricity in key energy-intensive industries is projected to create a demand for approximately 46.38 million non-hydropower green certificates [31][34] Investment Recommendations - The implementation of dual carbon controls is anticipated to enhance the economic viability of green attributes, benefiting operators of wind and solar power who can obtain green certificates [10] - The report highlights specific companies such as Longyuan Power, Xinte Energy, and Fujian Energy as favorable investment opportunities due to their strong fundamentals and focus on renewable energy [10]