Caitong Securities: Strengthening New Energy Consumption Orientation to Tap Load-side Adjustment Value

The Zhitong Finance App learned that CaiTong Securities released a research report saying that this plan promotes the expansion of the power industry chain value from a single power source and redistribution to grid carrying, flexible adjustment, and user side interaction. On the new energy generation side, more emphasis is placed on consumption, grid connection, reliable output, and load scenario competition. It is recommended to focus on Longyuan Electric Power, Jiangsu Xinneng, and Zhejiang Xinneng, which have strong consumption capacity and stable electricity price mechanisms; the construction of new power grids continues to benefit UHV, flexible DC, and main grid equipment; and load-side system regulation benefits new energy storage and virtual power plant processes.

The main views of Caitong Securities are as follows:

The content of new power system construction has been further improved

The “Plan” clearly establishes a clean, low-carbon, safe and abundant, cost-effective, supply-demand collaboration, flexible and intelligent new power system, highlighting the connotations of “safe and abundant” and “supply-demand collaboration”, reflecting the construction of a new type of power system, adhering to low-carbon transformation and equal emphasis on energy supply and supply, and collaboration between energy supply and consumption.

The core goal is to pay more attention to multi-agent collaboration in source network load storage

The “Plan” requires non-fossil energy to account for 50% of electricity generation by 2030; the high level of energy consumption capacity will reach 2.8 billion kilowatts; a charging infrastructure network supporting more than 110 million electric vehicles will be built; virtual power plants will become an important vehicle for collaboration and interaction on the electricity side; and a unified national electricity market system will basically be completed.

Implement guidelines for the utilization rate of new energy by region

Unlike the 14th Five-Year Plan, which emphasizes the scale of installed new energy, the 15th Five-Year Plan places more emphasis on the consumption of new energy sources. It is required to maintain the national energy utilization rate at around 90%, implement new energy utilization target guidance on a regional basis; promote the “Three North” wind power photovoltaic base's West-East transmission and West-use capacity; and vigorously develop new forms of consumption of new energy sources nearby, such as direct green power connections and smart microgrids.

Compared with the 14th Five-Year Plan, the new power grid places more emphasis on joint coordination of the main grid, distribution network, and microgrid

The power grid structure in the 14th Five-Year Plan focuses on UHV, cross-regional transmission, and provincial main grid construction, while the 15th Five-Year Plan emphasizes the construction of a new grid system composed of main grids, distribution networks, and microgrids. The “Plan” mentions that by 2030, the scale of electricity transmission from west to east will exceed 420 million kilowatts; pilot 100% new energy transmission and transmission projects such as “Shagowang” will be launched; and the focus will be on transforming distribution networks in cities and counties to adapt to large-scale access to distributed photovoltaics and energy storage.

Load side upgraded from single demand positioning to system-regulated power resources

The “14th Five-Year Plan” electricity consumption side focuses on energy saving and efficiency improvement and demand response, while the “15th Five-Year Plan” positions the electricity consumption side as a power resource that can be scheduled, traded, and participated in system balance. The “Plan” calls for guiding the aggregation of distributed resources such as distributed power sources, adjustable loads, and electric vehicle charging facilities to participate in power peak cutting and valley filling; it also suggests that by 2030, the country's demand side peak cutting capacity will exceed 100 million kilowatts; the maximum regulation capacity of virtual power plants will exceed 50 million kilowatts.

Risk warning: The progress of policy implementation and grid investment fell short of expectations, and the growth in electricity demand fell short of expectations.