Summary of this issue:
In the medium and long term demand outlook for China's energy and coal released on December 14, 2021 and the medium and long term forecast for China's energy and coal demand (II) released on February 15, 2022, we analyzed the logic of the annual rise of energy consumption elasticity (total energy consumption growth rate / real GDP growth rate) and the subsequent deductive trend since the 13th five year plan, And split the pulling force of the upward elasticity of energy consumption in this round. From the perspective of China's power consumption structure, this paper explains the continuous growth of power consumption in the whole society from 2020 to 2021. Combined with the calculation of specific emerging industries and residents' domestic power consumption, this paper forecasts and prospects the power demand of the whole society in China from 2022 to 2025.
The increase of electricity contribution of emerging industries and the adjustment of electricity consumption structure are the main reasons for the higher than expected growth of electricity consumption. From 2020 to 2021, affected by covid-19 epidemic, China's economy was under pressure, while the power consumption of the whole society continued to exceed expectations in monthly, quarterly and annual dimensions. The elasticity coefficients of power consumption in 2020 and 2021 were 1.72 and 1.32 respectively. With the rapid development of industries with more high-tech content and core competitiveness, such as high-tech and equipment manufacturing industry, information transmission and Internet service industry, these industries not only have high economic added value, but also have the characteristics of high energy consumption and high power consumption. From 2019 to 2021, the marginal contribution rates of power consumption increment of six high energy consuming industries, high technology and equipment manufacturing industry, information transmission and Internet services were - 6.6%, 3.3% and 2.8% respectively (difference method: industry average incremental contribution rate - proportion of power consumption). Emerging industries have become one of the core forces of power consumption growth in the whole society, driving the upward elasticity coefficient of power consumption. With China's economic development and the improvement of per capita GDP, household electricity consumption has increased rapidly. In 2021, household electricity consumption accounted for 14.1%, an increase of 0.5 PCT compared with 5 years ago and 2.2 PCT compared with 10 years ago. Household electricity itself contributes to the growth of electricity consumption without directly generating economic value. The increase of its proportion leads to a large deviation in the prediction of electricity consumption based on the elasticity coefficient of electricity consumption.
From 2022 to 2025, the growth rate of power consumption in the whole society is expected to be 5.5% - 6.5%. Based on the analysis of emerging industries and residents' domestic power consumption, and combined with the trend of China's power consumption elasticity coefficient in the past 10 years, we predict that China's power consumption elasticity coefficient will be 1-1.3 from 2022 to 2025. Under the assumption of GDP growth rate of 5% - 5.5%, the growth rate of the whole society's power consumption is expected to be 5.5% - 6.5%, the growth center is 6%, and the whole society's power consumption will be 10.30-10.69 trillion kwh in 2025.
In 2025, the power consumption of emerging industries will account for 19.7-20.5% of the power consumption of the whole society, and the average contribution rate of power consumption increment from 2021 to 2025 will reach 35.3% - 40.3%, contributing more than 50% of the power consumption increment together with residents' life. Through the calculation of six emerging industries: communication base station, data center, charging and replacement service of new energy vehicles, photovoltaic industry, manufacturing of computers, communications and other electronic equipment, and electric furnace steel, we predict that by 2025, the proportion of power consumption will be 5.76%, 6.13%, 1.25%, 3.02%, 3.24% and 0.62% respectively, with a total of 20.02%, an increase of 5 pct compared with 2021 (15.1%), The contribution rate of average power consumption increment from 2021 to 2025 is 37.5% (6% power consumption growth assumption). It is estimated that in 2025, the household electricity consumption will account for 15.22%, an increase of 1.1 PCT compared with 2021 (14.1%), and the average incremental contribution rate will be 16.8% (6% electricity consumption growth assumption).
Industry rating and investment suggestions: the rapid development of emerging industries, power substitution and the increase in the proportion of residents' domestic electricity will enhance the demand elasticity and growth toughness of China's power consumption in the whole society. For the development and growth of emerging industries such as new energy vehicles, photovoltaic, semiconductors and digital new infrastructure, we should not only see the role of their high added value in promoting China's industrial transformation and upgrading and high-quality economic development, but also see the characteristics of high energy consumption and high power consumption behind emerging industries, which will marginally drive the sustained and rapid growth of power consumption in the whole society, And further push up China's power peak load. At the same time, with the increase of per capita GDP, the future growth space of residents' domestic power consumption is huge and the certainty of sustained growth is strong. It will also further promote the rapid growth of power consumption in the whole society and promote the elasticity of power consumption relative to economic growth. China's energy resource endowment of "rich coal, poor oil and little gas" determines the absolute dominant position of coal in China's energy and electricity. Thermal power accounts for about 70% of the power generation of the whole society. Coal for electricity is the most important consumption field of coal (accounting for about 60%) and will gradually increase (accounting for more than 90% in the United States). Considering the bright prospect of new energy development, it will take a long time period, At present, the proportion in the power and energy structure is still very low (the proportion of power generation in 2021 is just over 10%), so the high increase of power consumption will form a strong support for the continuous growth of coal demand, and the continuous exceeding expectation of power demand will drive the continuous exceeding expectation growth of coal consumption. At the same time, as the power load on the power consumption side rises, the volatility increases, and the proportion of unstable power sources such as wind, light and hydropower increases, the regulation capacity and peak capacity value of coal power will gradually highlight, maintaining the "optimistic" rating of coal and power industry.
Combined with our systematic research on the energy and coal production capacity cycle, this round of energy inflation cycle is still in the early and medium term. At this stage, the fundamental trend of the coal industry and the underlying logic of the dual carbon energy policy are good for the repair and improvement of the valuation of the sector. Considering the certainty of the high growth of the performance of the sector in the whole year, especially in the first half of this year, At present, it is still the best stage to actively allocate the coal sector on bargain hunting. Investment rating: we continue to look at the coal sector in an all-round way and continue to suggest paying attention to the historic allocation opportunities of coal. It is suggested to pay attention to three main investment lines: first, Yankuang energy, the leader of power coal with low value, high dividend and growth potential, Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) ; Second, regional leaders of coking coal Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Guizhou Panjiang Refined Coal Co.Ltd(600395) , which are both scarce and growing; Third, Shanxi Coking Coal Energy Group Co.Ltd(000983) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , which have great potential for extensive expansion brought by the increase of asset securitization rate of state-owned coal group.
Risk factors: the macro economy stalled sharply and went down; The development of digital infrastructure and integrated circuit industry is less than expected due to external sanctions and intervention; The growth of new energy vehicle ownership is lower than expected; The gradual increase of per capita GDP was less than expected.
