20231008-国盛证券-电力行业周报_需求侧负荷侧管理办法出台_优化新能源开发及消纳_13页

Industry Overview

The report analyzes the power and utility sector, focusing on regulatory changes, market performance, investment opportunities, and risks as of the week ending September 29, 2023. The sector saw a slight decline but beat broader market indices.

Key Regulatory Developments

New guidelines on power load and demand management were introduced to improve the integration of renewable energy. By 2025, demand response capabilities must reach 3-5% of maximum electricity load. Additionally, efforts to eliminate improper market interventions in renewable projects are expected to lower development costs and boost efficiency in wind, solar, and pumped storage.

Market Performance

The industry index decreased by 0.25%, outperforming the CSI 300 index which fell 4.7% year-to-date. Individual stocks mixed, with some utilities showing gains while others declined.

Investment Recommendations

• Thermal Power: Expected to benefit from power market reforms, focusing on companies like Huadian Environmental Protection and Huagong Energy for demand-side capabilities.
• Hydropower: Profiting from improved water supplies, with stocks like China Three Gorges and ChuanDian Energy highlighted.
• Green Energy: Opportunities in renewable integration and green certificate markets, including large operators like Three Gorge Energy.
• Specific buy recommendations include:
  • Huagong Environmental Protection (demand-side flexibility)
  • China Nuclear Power and China Guangdong Nuclear Power (nuclear sector)
  • Delo Energy (hydro and low-valued stocks)

Risks

Include potential raw material price volatility, project delays, and uncertainties in policy developments for grid services and emissions trading.

Conclusion

The sector faces growth amid renewable transitions, emphasizing resilient investments in thermal, hydro and green energy sectors, but risks from operational challenges remain.