The 14th five year plan for modern energy system was released, and China’s energy structure transformation has entered an important window period. In the context of carbon neutrality, the global energy pattern is being reshaped, and China has also entered an important window period of energy structure transformation. During the 13th Five Year Plan period, China’s energy structure has been continuously optimized and remarkable results have been achieved in low-carbon transformation. The 14th Five Year Plan period is a key period for China to lay a good foundation for realizing the goal of “double carbon”. On March 22, the national development and Reform Commission issued the “14th five year plan” for modern energy system. The plan pointed out that the field of traditional energy emphasizes energy security and ensures China’s fossil energy supply. And we should continue to promote the low-carbon transformation of energy and improve the efficiency of the energy system. In the field of new energy, we will vigorously develop wind, water and nuclear power, and strengthen the application of Cecep Solar Energy Co.Ltd(000591) , geothermal energy, biomass energy and other renewable energy in key industrial fields.
Crude oil is irreplaceable in the medium and short term, and we will adhere to the development strategy of energy security. We believe that from a global perspective, crude oil is an important chemical raw material, and its important uses cannot be replaced in the short term, so the chemical demand for crude oil will maintain growth in the short term; The number of fuel vehicles in the world is still large, so the demand for refined oil fuel will remain stable in the short term; China’s dependence on crude oil imports is high, and ensuring energy security has become an important task for China’s crude oil enterprises. Therefore, the strategic position of “king of bulk” (crude oil) is irreplaceable in the medium and short term. In the process of energy transformation, China attaches great importance to energy supply security. The central economic work conference in December 2021 pointed out that the gradual withdrawal of traditional energy should be based on the safe and reliable substitution of new energy. To ensure energy supply, large enterprises, especially state-owned enterprises, should take the lead in ensuring supply and stable prices. We should deepen the energy revolution and build a powerful country. In addition, IEA predicted in world energy outlook 2021 that the global crude oil demand will reach the peak of 97 million barrels per day in 2025, remain basically stable until 2030, and finally reduce to 77 million barrels per day in 2050.
In the window period of energy structure transformation, vigorously develop “wind”, “light”, “lithium”, “hydrogen” and “gas”. Due to China’s resource endowment of “rich coal, poor oil and little gas”, coal accounts for more than half of China’s energy structure, and coal combustion and power generation cause serious carbon emission problems. Based on China’s energy situation, we focus on the main lines of energy transformation such as wind power generation, lithium battery, hydrogen energy and natural gas: 1) wind power generation: from 2001 to 2019, coal consumption caused nearly 80% of China’s CO2 emissions. Coal-fired power generation is an important demand field for coal. Under the “double carbon” goal, vigorously developing wind power generation instead of coal-fired power generation is an effective path for China’s carbon emission reduction; 2) Lithium battery and hydrogen energy: from the perspective of oil demand structure, we believe that the development of new energy vehicles will effectively reduce oil consumption. If new energy vehicles such as lithium battery and hydrogen fuel cell completely replace fuel vehicles, the proportion of oil consumption in transportation, transportation and storage will be greatly reduced, so as to reduce the total consumption of Petrochina Company Limited(601857) without affecting the necessary industrial consumption; 3) Natural gas: with low carbon emission per unit, it is a carbon friendly fossil energy. As the cleanest fossil energy, natural gas has great advantages in supply stability and acquisition cost compared with non fossil energy. Therefore, in order to slow down the rising rate of carbon emissions and even achieve carbon peak in the medium and short term, we must vigorously promote the use of natural gas while developing non fossil energy.
Investment suggestions: 1. In terms of traditional energy, with the continuous promotion of global carbon neutrality policy, according to the long-term capital expenditure plan announced by overseas giants, the growth rate of global oil and gas capital expenditure will continue to decrease. As basic energy, important chemical raw materials and important strategic reserves, the value of crude oil is bound to rise again. Therefore, we are still optimistic about the prosperity of the petrochemical industry. 2. In terms of new energy, based on China’s energy situation, we focus on the three main lines of energy transformation: wind power generation, lithium battery and hydrogen energy, and continue to be optimistic about the future development prospects of the industry.
Risk analysis: the risk of epidemic spread, geopolitical risk, the risk of too fast growth of shale oil production, and the risk of less than expected policy strength.
