Current investment tips:
To build a new power system, the policy framework is slowly launched. Under the 30.60 dual carbon strategy, the proportion of new energy in China's power supply structure will increase rapidly in the future. Compared with the traditional power supply structure, the main problem of new energy is instability. Supply and demand need two-way matching. Therefore, under the traditional power supply structure, the electricity price system is mainly formulated around the generation cost; Under the power supply structure with the rising proportion of new energy, the design of electricity price system needs to take the consumption cost as the core. In March 2021, the general secretary first proposed to build a new power system with new energy as the main body at the ninth meeting of the central financial and Economic Commission. Under the guidance of the highest level voice, relevant policies of China's power system have been intensively issued since March. In summary, they can be divided into three categories, namely, promoting new energy consumption, electricity price marketization reform and energy dual control / carbon emission reduction. The three categories of policies can be further divided into four quadrants of "source, network, load and storage". Up to now, the policy framework of the new power system has been basically formed.
It is clear that the peak shaving energy storage cost is transmitted to the user side, and the market mechanisms of pumped storage, time of use electricity price and auxiliary services have been introduced one after another. In terms of cost sharing, China successively introduced pumped storage, time of use electricity price and auxiliary service market mechanism in April, July and December, emphasizing the implementation of two-part electricity price for pumped storage, in which the capacity electricity price is included in the recovery of transmission and distribution electricity price; Enlarge the peak valley difference of TOU price and connect with the power spot market; The cost of auxiliary services shall be apportioned according to the principle of "who provides, who benefits; who benefits, who bears", and shall be separately disbursed in the user's electricity charge. The internal logic of the three sets of documents comes down in one continuous line. They all emphasize that the peak shaving energy storage and auxiliary service costs are transmitted to the downstream, and the power supply and power grid are no longer "compulsory services", which greatly reduces the transmission pressure of consumption costs to upstream new energy operators, and is conducive to ensuring the consumption and return rate of new energy projects in the era of parity.
Power rationing promotes power reform, and the state's attitude towards on grid electricity price has quietly changed. China has experienced a three-year electricity price reduction cycle since 2018, resulting in the inertial thinking that the on grid electricity price can only go down to a certain extent. However, under the double carbon target, with the new situation of energy conservation and emission reduction and industrial upgrading in the whole society, the national attitude towards electricity price has changed quietly. The national development and Reform Commission issued a document in August to prohibit the implementation of preferential electricity price policies for electrolytic aluminum industry; In September, energy dual control was determined to be connected with green power to support green power to have an additional premium; In October, the coal electricity price is allowed to rise by 20%, and the electricity price of high energy consuming industries is not limited. Recently, Jiangsu, Guangdong and Shaanxi successively announced the annual long-term association transaction results in 2022, and the increase of electricity price greatly exceeded the market expectation. It is expected that with the tightening of power supply and demand pattern and the severe situation of dual control of energy, China's on grid electricity price will enter an upward cycle.
In November, the general secretary once again issued a voice to promote power reform and lay the policy tone for 2022 and even the 14th Five Year Plan period. In response to the general secretary's speech, the National Energy Administration released the road map for energy work in 2022 on December 25, proposing seven key work directions in the energy field in 2022. Combined with the spirit of the document, we analyze that China will basically complete the construction of the new power system policy "framework" in 2021, need more "content" in 2022, and the rhythm of high-density policy is expected to continue. At the current time point, with the continuous increase of policies related to the new power system, we believe that power operators are still one of the most deterministic and cost-effective industries in the new energy field. Based on the group's positioning, power supply and demand pattern, the 14th five year plan for new energy development, regional resource endowment and valuation, China power, China Resources Power, Guangdong Electric Power Development Co.Ltd(000539) , Inner Mongolia Mengdian Huaneng Thermal Power Corporation Limited(600863) , Huaneng Power International Inc(600011) .
Risk tip: there is uncertainty in the implementation of the policy, and the cost decline of wind power photovoltaic equipment is lower than expected; Fierce competition among operators leads to the mismatch between IRR and discount rate of new projects; Extreme coal prices make thermal power break through the cash flow balance point.
(Shanghai Shenyin Wanguo Securities Research Institute)
