Events
On March 22, the national development and Reform Commission and the National Energy Administration jointly issued the “14th five year plan” for modern energy system. The plan pointed out that China’s energy security has entered a critical period and the low-carbon transformation of energy has entered an important window period.
Comments
Accelerate the transformation of green energy and ensure energy security. The plan focuses on energy security and makes arrangements for Petrochina Company Limited(601857) , independent natural gas production. It is required that the oil production will rise to 200 million tons in 2022 and the natural gas production will reach more than 230 billion cubic meters in 2025. China is a big energy consumer. Only by paying attention to energy security can we ensure the steady development of the national economy as a whole. Accelerate the green and low-carbon transformation of energy. The construction of green energy is also closely related to energy security. The increase of green energy will reduce the use of fossil fuels and reduce the external dependence on oil and gas. From the perspective of energy security, accelerating wind power and Cecep Solar Energy Co.Ltd(000591) construction will be the focus of this plan.
Benefiting from the policy boost, the prosperity of the energy sector rose. In terms of A-shares in the energy industry, at present, with the implementation of new energy industry planning in various provinces and cities, the performance of relevant enterprises has increased rapidly and performed brightly, which has been widely concerned by the market. In terms of fossil energy, with the recent high international energy prices, oil and natural gas have opened up profit margins. After the release of this plan, wind power, photovoltaic and supporting energy storage in the field of new energy will be further supported by policies to maintain the existing high growth trend. The document mentioned that the demonstration of hydrogen production from wind power and photovoltaic will be carried out, and the construction of hydrogen energy will be put on the agenda, which will effectively help the performance growth of hydrogen related enterprises. In terms of traditional fossil energy, in order to ensure energy security and the investment in oil and gas exploration and exploitation, the prosperity of the oil service industry is expected to be boosted. As the underpinning of China’s energy security, coal is planned to improve China’s coal security capacity to ensure sufficient coal supply, and coal prices are expected to fall. Overall, the introduction of the plan will give a new boost to the energy industry with obvious early adjustment, especially the green energy sector.
New energy construction and oil and gas exploitation are two main investment lines. The first is the field of wind power, photovoltaic, energy storage and green energy. As the key construction field of China’s energy transformation, the green energy track will maintain a high profile for a long time, and the new energy equipment manufacturing enterprises will obtain considerable return on investment. At the same time, the large-scale and high proportion access of new energy poses a challenge to the existing power system. Innovating the operation mode of power grid, enhancing the power coordination ability and accelerating the application of new energy storage technology will greatly improve the stability of power grid. It is suggested to pay attention to the leading enterprises of energy storage and power grid equipment. On the other hand, the oil service industry for oil and gas exploration and exploitation will directly benefit from the attention of energy security, so as to get more investment. Compared with oil enterprises, oil service enterprises have small volume, sufficient flexibility and rapid performance growth, which is expected to bring benefits to investors.
Risk tip: the construction of new energy slows down, the international oil price drops sharply, and the raw materials fluctuate sharply
