CITIC Securities: Users' timeshare electricity prices connect the market with changes in industrial and commercial energy storage models

The Zhitong Finance App learned that CITIC Securities released a research report saying that the power system capacity shortage problem may be further revealed in 2026, driving demand growth for various power auxiliary services. The bank expects energy storage investment in the northwest region with large spot price differences, strong regulatory demand, and strong policy support. Operators with new energy storage-related layouts in the region are also expected to benefit; in addition, hydropower and thermal power regulation values are also expected to increase. Demand-side related virtual power plants, microgrids, and source grid load storage are also expected to usher in opportunities for accelerated development.

CITIC Securities's main views are as follows:

incident

Recently, the National Development and Reform Commission and the National Energy Administration issued the “Notice on Accomplishing the 2026 Medium- and Long-Term Electricity Contract Agreement”, which stipulates details such as the proportion of electricity contracted in medium- and long-term transactions between power generation companies and power users in 2026, the implementation mechanism for cross-provincial transactions, market price formation mechanisms, and contract performance guarantees.

The peak and valley timeshare electricity prices are linked to market transaction results, and the market-based reform of electricity is further advanced

In terms of the medium- to long-term contract signing mechanism, this “Notice” clearly states that the issuer parties must sign timeslots and curves according to no less than 24 time periods to further connect with the electricity spot market. It also stipulates for the first time that users participating in the electricity market will no longer implement the timeshare electricity prices stipulated by the government, and that the timeshare electricity prices must be linked to spot electricity prices. The introduction of the new policy means that electricity prices for electricity users participating in the market will be affected by spot trading results rather than accepting peak and valley electricity prices set by the government. The bank expects that with the implementation of the new mechanism, user-side electricity prices will be linked to spot electricity prices, price signals will better reflect actual supply and demand in the market, thereby guiding investment and construction that regulates power supply, energy storage, and demand-side response.

Industrial and commercial energy storage profit models have fundamentally changed, and some stock projects may face downward pressure on profits

Currently, the vast majority of provinces in China implement time-sharing electricity price policies, and peak and valley electricity prices on the user side are still stipulated by the government and fail to reflect the actual peak and valley supply and demand situation. Therefore, industrial and commercial energy storage projects can rely on the large peak and valley price difference arbitrage stipulated in the policy to obtain high profits. As time-sharing electricity prices on the user side are linked to spot electricity prices, the bank expects that some industrial and commercial energy storage projects in regions with large price differences and long periods of time in the past may face narrowing pressure on profits. Profits under the new mechanism will be related to factors such as spot price differences and demand regulation in the region where the project is located.

The shortage of power system capacity has gradually come to light, and demand for new energy storage development is still strong

The adjustment of the electricity price policy may have an impact on the profits of existing industrial and commercial energy storage and the enthusiasm for subsequent investment. However, at present, the bank believes that factors such as lack of system capacity and intensification of consumption disputes will still drive the continued expansion of the installed scale of new energy storage, especially power supplies and grid-side energy storage. From a regional perspective, the bank believes that new energy storage in the eastern and southern regions may face the problems of small inventory and limited room for arbitrage, while the northwest region has a good foundation for the development of new energy storage, which accounts for relatively high supply of new energy sources, stronger regulatory demand, and strong capacity electricity price policy support, and is expected to enter a stage of rapid growth.

risk factors

Demand for electricity fell short of expectations; new energy installations fell short of expectations; scenery and energy storage costs rose sharply; construction of new power systems was progressing slowly than expected; electricity market reforms were progressing slowly, etc.