China and the EU exchanged in-depth views on the environment and climate, and solidly promoted the “double carbon” goal.
On May 16, Xie Zhenhua, China’s special envoy for climate change affairs, held a video dialogue with Timmermans, the first vice president of the European Union. The two sides exchanged in-depth views on topics of common concern, such as the latest progress of their respective climate actions, promoting the success of the 27th conference of the parties to the United Nations Framework Convention on climate change (cop27), and strengthening China EU bilateral practical cooperation on environment and climate. China pointed out that since the announcement that carbon dioxide emissions will reach the peak by 2030 and strive to achieve carbon neutralization by 2060, China is scientifically, orderly and Solidly Promoting the implementation of the commitment to reach the peak and carbon neutralization goal, and has made positive progress. At present, the “1 + n” policy system of carbon peaking and carbon neutralization has been basically established, the “double carbon” support and guarantee system has been improved day by day, the implementation plans for some key areas and key industries have been officially issued, the green and low-carbon transformation of energy has been continuously promoted, and the installed capacity of hydropower, wind power, Cecep Solar Energy Co.Ltd(000591) power generation and biomass power generation ranks first in the world, showing China’s responsible attitude and practical actions to deal with climate change. China said that to cope with climate change, we need to balance the relationship between development and security, overall and local, short-term and medium and long-term. On the premise of ensuring energy security and food security, we should take positive climate action to achieve sustainable economic and social development. China is willing to strengthen cooperation with the European side, lead global climate governance with practical actions, promote the implementation of cop27 focus commitments, make substantive progress on issues such as adaptation and funding in a comprehensive and balanced manner, and help developing countries improve their capacity to cope with climate change.
Promote the upgrading and transformation of energy consumption, and jointly transform 600 million kilowatts of coal-fired power within five years.
Recently, Zhang Jianhua, Secretary of the Party group and director of the national energy administration, published an article entitled “comprehensively building a modern energy system and promoting the high-quality development of energy in the new era” in the current affairs report. The article pointed out: to build a clean and low-carbon energy production and consumption system: first, accelerate the implementation of renewable energy substitution. Promote the construction of a large-scale wind power photovoltaic base with a total scale of 450 million KW, and accelerate the development of distributed new energy. Develop biomass energy, geothermal energy and other renewable energy according to local conditions to ensure that the proportion of non fossil energy consumption will increase to about 20% in 2025. Second, pay attention to the clean and efficient utilization of coal. During the 14th Five Year Plan period, the total transformation scale was about 600 million kilowatts. Third, vigorously promote the transformation and upgrading of terminal energy consumption. We will improve the “dual control” system of energy consumption, improve the market mechanism guided by green power consumption, and strive to make the proportion of electric energy in terminal energy consumption reach about 30% in 2025. Fourth, actively build a new power system. It is planned to build a new energy supply and consumption system based on large-scale wind power photovoltaic base, supported by clean, efficient, advanced and energy-saving coal power around it, and supported by stable, safe and reliable UHV power transmission and transformation lines. The “14th five year plan” is the key period to achieve carbon peak and promote carbon neutralization. Renewable energy will change from the incremental supplement of energy and power consumption to the main body of energy and power consumption, accelerate the transformation of energy structure to green and low-carbon, contribute to the expansion of the installed scale of wind power and photovoltaic power generation, and promote the rapid development of new energy industry.
At present, the coal supply in Shanxi and Mongolia is mainly supported by the high-level coal supply of Shaanxi and Mongolia. In terms of coal resources in the market, the land available for sale after the long-term insurance association of major mainstream mines is limited, the overall market available resources are tight, and the procurement enthusiasm of non power end users such as chemical industry is good. At the same time, intermediate traders also have an appropriate amount of stock demand. Most coal mines can be produced and sold immediately, without inventory pressure, and the price support is strong. By the second half of this week, the prices of most coal mines have stabilized, and some coal mines in some areas have decreased due to the rapid rise in the early stage and the reduction of mining vehicles. In terms of downstream demand, the replenishment of power users this week continues to be dominated by long-term cooperation, and the coal demand of non power users such as chemical industry is good. Recently, the daily consumption of power plants in some parts of China has increased, and the number of days available in inventory has declined compared with the previous period, but the enthusiasm for purchasing coal in the market has not been significantly boosted under the guarantee of the long-term association; The demand of non power users such as chemical industry continues to release, with good procurement enthusiasm, supporting the high price of thermal coal.
The average price of LNG in China continues to decline, and the downward trend may continue in the future
In terms of supply this week, the LNG output of Chinese liquid plants decreased, and the arrival of Sea gas increased, but the shipment volume of tank batch decreased slightly; In terms of demand, due to the impact of the current high price of LNG, the acceptance of industrial users is low, and they mostly purchase on demand. The overall demand is poor, and traders tend to be cautious in taking goods. However, due to the cost support of feed gas in Northwest China, the price decline is limited for the time being. The LNG supply may increase next week, and the demand may be easy to reduce but difficult to increase. Zhuo Chuang consulting expects the LNG price to continue the downward trend next week. Recently, as the market has entered the traditional off-season, the liquefaction manufacturers have successively entered the maintenance state. However, due to the recent high temperature in the United States, the downstream demand of the market is large, and the high temperature has accelerated the upstream production reduction and maintenance situation to a certain extent, and the overall supply in the United States has decreased; The European region has made frequent moves in natural gas. The EU and the United States have reached a large natural gas agreement and the EU Russia energy decoupling, which is conducive to the US LNG Export, the US LNG export demand has increased, and the US natural gas price has been rising all the way. Although the recent overhaul has led to a decline in supply, as the market has entered the traditional off-season and the overall demand of main consumer places is weak, we expect the US LNG price may decline in the future.
Investment advice
The state pays more and more attention to sludge treatment and disposal, and the sludge disposal rate has increased. However, at present, the average sludge disposal rate in China’s cities and towns still lags behind the sewage treatment rate, “heavy water and light sludge” has gradually changed to “pay equal attention to both mud and water”, and the urban sludge disposal market will continue to grow during the 14th Five Year Plan period. In June 2021, the national development and Reform Commission and the Ministry of housing and urban rural development issued the development plan for urban sewage treatment and resource utilization in the 14th five year plan, which proposed that during the 14th Five Year Plan period, the scale of harmless disposal facilities for newly added sludge (wet sludge with moisture content of 80%) shall not be less than 20000 tons / day. Complete filtration equipment is the key equipment for sludge drying. It is recommended to pay attention to the leading enterprises of complete filtration equipment in China and continue to expand the [Jingjin equipment] of new energy and gravel high prosperity track. In the context of “double carbon”, the utilization of renewable resources will benefit from policies and develop rapidly. The targets that benefit include leading enterprises in rare earth waste and [ Jiangsu Huahong Technology Co.Ltd(002645) ] in-depth layout of scrap steel and scrap car recycling.
In the process of accelerating the transformation of energy structure to green and low-carbon, the installed capacity of new energy is expected to grow rapidly, and new energy operators benefit from the increase of scale, the improvement of operation efficiency and the thickening of performance. We recommend paying attention to the new energy target of thermal power transformation [ Huaneng Power International Inc(600011) ]; At the same time, [ Cecep Solar Energy Co.Ltd(000591) ], [ Cecep Wind-Power Corporation(601016) ], and the Hong Kong stock targets benefiting from the new energy operation include [Longyuan Power], [China Resources Power] and [China power].
Risk tips
1) the implementation of carbon neutralization related policies is less than expected;
2) the demand for power coal and natural gas decreases seasonally;
3) major changes in power policy;
