Zhongjin: The overall electricity price result is better than market expectations, and current policies support wind power growth.

Zhongjin released a research report stating that by the end of 2025, bidding results for mechanism electricity prices have been announced in 25 provinces. At the same time, State Grid's New Energy Cloud has disclosed detailed lists of mechanism electricity projects in 20 regions. According to calculations, the capital Internal Rate of Return (IRR) of projects in multiple regions can reach over 10%, and the stability of regional electricity prices and profitability may remain at a relatively good level. However, the capacity to be released is relatively low, and current policies are more supportive of wind power growth. Due to pressure on regional grid integration, lower current prices for new energy trading, and fierce competition among incremental projects under bidding rules. It is recommended to pay attention to industry leaders with a high proportion of wind power and outstanding trading and operation capabilities. Key points from Zhongjin include: Scale: For wind power, there is support for incremental growth By 2026, wind power incremental projects have exceeded 56 GW, and considering potential increments such as large bases and offshore wind, it is expected that the annual addition of over 100 GW in 2026 is relatively supported. The centralized photovoltaic incremental in 2026 is about 49 GW, and it is estimated that the incremental projects of distributed mechanism electricity from 2025 to 2026 will be in the range of 10-15 GW. When looking at regions, Xinjiang/Hebei/Ningxia together account for over 53%. Zhongjin believes that this may reflect government investment considerations and future demand expectations, but short-term limiting factors may lead to upward pressure on electricity prices. Shanghai/Beijing/Tianjin is expected to have incremental additions of less than 1 GW in 2026, and the grid integration space is still relatively abundant. Electricity prices and profitability: Overall, the electricity price results are better than market expectations, and high-quality projects in certain regions are scarce According to Zhongjin's calculation, the capital IRR of projects in multiple regions can reach over 10%, and the stability of regional electricity prices and profitability may remain at a relatively good level, but the release capacity is relatively low. In Gansu, Heilongjiang, Xinjiang (2026 photovoltaic), and Shandong (2025 photovoltaic), the mechanism electricity prices are more than 20% below the bidding upper limit and coal benchmark price. Zhongjin believes that this may be due to regional grid integration pressure, current low prices for new energy trading, and fierce competition among incremental projects under bidding rules. Under the current price level, profitability of conventional projects is relatively difficult, requiring individual projects to have lower costs, better grid integration and grid connection locations, and higher utilization hours. Competitive landscape: The proportion of the top five power increment projects is significantly lower than the existing market share. According to Zhongjin's statistics, the top five centralized photovoltaic and wind power companies account for 19% and 22% of incremental projects (compared to the new energy market share of 35% at the end of 2024). The top three groups in terms of resource acquisition are Huadian, State Power Investment, and Datang. Some groups may focus on developing new energy bases, and the order of installation for conventional projects among various groups may be influenced by the "Thirteenth Five-Year Plan" group installation strategy and the release of incremental resources in advantageous regions. Risk factors Future bidding results may fall short of expectations, limiting factors may exceed expectations, and market electricity price reductions may exceed expectations.