This week’s view: the construction of the national unified power market system is expected to accelerate
On January 28, 2022, the national development and Reform Commission and the National Energy Administration issued the guiding opinions on accelerating the construction of a national unified power market system, making important arrangements for the development direction of China’s power market. The opinions set systematic requirements for the construction of multi-level unified power market system from many aspects, and put forward the goal of initially completing the national unified power market system by 2025 and basically completing the national unified power market system by 2030. We believe that the following points deserve special attention. 1) Accelerate the construction of the national power market: study and promote the timely establishment of the national power trading center, and finally form a multi-level unified power market system with mutual coupling and orderly connection of the national market, provincial (District, city) / regional power market. The barriers to cross provincial and cross regional power trading are expected to be broken step by step; 2) Build a market mechanism suitable for the new power system: improve the market mechanism suitable for a high proportion of new energy, orderly promote the participation of new energy in power market transactions, and find the environmental value of green power in a market-oriented way; 3) Improve the power price formation mechanism: reform and improve the market-oriented formation mechanism of coal and electricity prices, improve the electricity price transmission mechanism, orderly promote all industrial and commercial users to enter the power market, and ensure the relative stability of electricity prices for residents, agriculture, public welfare undertakings and other utilities.
The deepening of power market-oriented reform has boosted the rapid development of China’s energy storage industry. The opinions clearly put forward the goal of initially establishing a national unified power market in 2025, and “the initial formation of market transaction and price mechanism conducive to the development of new energy and energy storage” is an important aspect. The power spot market, auxiliary service market, power generation capacity cost recovery mechanism and widening the peak valley price difference mentioned in this document have further laid the policy tone for the market-oriented development of China’s energy storage. As the “rigid demand” in the new power system, we believe that the energy storage industry will usher in deterministic development opportunities from the 14th five year plan. We suggest paying attention to Shenzhen Kstar Science & Technology Co.Ltd(002518) , Shenzhen Sinexcel Electric Co.Ltd(300693) , Kehua Data Co.Ltd(002335) , Shenzhen Envicool Technology Co.Ltd(002837) and other related targets of the energy storage industry chain.
Market review this week: the performance of power equipment sector is relatively strong in the fourth week of 2022
The power equipment sector fell 1.9% this week, higher than the CSI 300 index by 2.6%, of which wind power equipment performed best (+ 9.0%) and other power equipment performed relatively poorly (- 6.6%).
Industry chain tracking: the prosperity of lithium battery industry chain continues, and the price of silicon continues to rise
Lithium battery: due to the superposition of downstream demand boom and the continuous shortage of some raw materials, the overall price of lithium battery industry chain remained high this week.
Photovoltaic: the price of silicon material continues to rise slightly this week. The inventory clearing of components since November 2021 has come to an end. The production scheduling of components has improved significantly from January to February 2022, and the prices of silicon wafers and batteries have strong support. In the short term, China’s silicon supply increment is less than the demand increment, and the silicon price rises slightly before the Spring Festival. With the gradual release of new silicon production capacity from 2022, the terminal installation demand is expected to rise rapidly.
Risk tips: changes in new energy industry policies, supply chain bottlenecks lead to lower than expected demand, and intensified market competition leads to the decline of industry profitability
