Guosheng Securities: The scale of new energy installed capacity continues to expand, highlighting the investment value of flexible power adjustment.

Guosheng Securities released a research report stating the importance of flexible adjustment of power investment value. On January 6th, the National Development and Reform Commission and the National Energy Administration officially issued the "Special Action Plan for Optimizing the Adjustment Capacity of the Power System (2025-2027)", aimed at optimizing the adjustment capacity of the power system and promoting the construction of a new type of power system. Specific measures include formulating adjustment capacity construction plans, improving the ways of using adjustment resources, and participating in market mechanisms. Overall, with the continuous expansion of new energy installed capacity and increasing pressure on grid connection, the importance of flexible adjustment resources has greatly increased. Guosheng Securities' main points are as follows: Optimize the adjustment capacity of the power system and promote the construction of a new type of power system. Plan goals: With the goal of ensuring the safe and stable operation of the power system and the rational utilization of new energy by 2027, achieve a significant improvement in the adjustment capacity of the power system, supporting the reasonable utilization of more than 200 million kilowatts of new energy added annually from 2025 to 2027, and a utilization rate of renewable energy of no less than 90%. Policy measures: Formulate adjustment capacity construction plans. (1) Scientifically calculate the demand of each province, formulate local adjustment capacity construction plans, and submit them to the National Development and Reform Commission and the National Energy Administration by the end of June 2025, and incorporate them into the relevant work of the "15th Five-Year Plan" for energy and power at the beginning of each year, reporting on the progress of annual implementation, rolling revisions, etc. (2) Enhance pump storage adjustment capacity. (3) Promote the flexibility transformation of thermal power plants, and formulate a flexibility transformation plan based on the principle of "all necessary changes" for existing coal-fired units by 2027. (4) Transform or construct a batch of new energy storage power stations that are uniformly dispatched by dispatching agencies. (5) Coordinate the enhancement of renewable energy adjustment capacity. (6) Improve the efficiency of grid resource allocation. (7) Explore the potential of demand-side resources. Improve the ways of using adjustment resources. Including hierarchical dispatch, clear call order, differentiated use of pump storage, coal-fired, new energy storage, system-friendly new energy power plants, integrated use of large-scale wind and photovoltaic bases such as Shago Desert, and integrated use of water, wind, and photovoltaic bases. Improve the market mechanism for the participation of adjustment resources. (1) Further improve the peak-valley electricity price mechanism, rationally set upper and lower price limits, and promote the participation of various adjustment resources in the market; (2) Strengthen the overall coordination of adjustment capacity within the region, establish a sound auxiliary service market system, and establish a fair market mechanism based on adjustment effects; (3) Accelerate the establishment of a market-oriented capacity compensation mechanism to determine capacity demand and value based on market orientation and promote the rational allocation of resources. New energy installed capacity continues to grow rapidly, and the contradiction of grid connection urgently needs to be resolved, highlighting the value of flexible adjustment resources. According to the national statistics on the power industry released by the National Energy Administration, the accumulated installed power generation capacity in China from January to November 2024 is approximately 3.23 billion kilowatts, a year-on-year increase of 14.4%. Among them, the installed power generation capacity of CECEP Solar Energy was approximately 820 million kilowatts, a year-on-year increase of 46.7%; and the installed power generation capacity of wind power was approximately 490 million kilowatts, a year-on-year increase of 19.2%. The growth rate of new energy installed capacity far exceeds that of the overall power generation installed capacity, showing a strong growth momentum. In 2024, the proportion of new energy installed capacity in the Northwest/ North China/ Northeast Power Grid reached 53%/47%/44% respectively, bringing considerable grid connection pressure to the region. Overall, with the continuous expansion of the new energy installed capacity, the increasing pressure of grid connection, the importance of flexible adjustment resources has greatly increased. Investment advice: Recommend paying attention to flexible adjustment resources and emphasizing the value of flexible adjustment. Focus on key targets such as Huadian Power International Corporation (600027.SS), Shenergy (600642.SS), Anhui Wenergy (000543.SZ), Fujian Funeng (600483.SS), Zhejiang Zheneng Electric Power (600023.SS), Jointo Energy Investment (000600.SZ); focus on pump storage and energy storage targets such as China Southern Power Grid Energy Storage (600995.SS); recommend focusing on the industrial chain of thermal power flexibility transformation such as Qingdao Daneng Environmental Protection Equipment (688501.SS), etc. Risk warning: Policy implementation falls short of expectations; installed capacity falls short of expectations; related subsidies fall short of expectations.