CICC: Mainland Electricity Price Bidding Results Announced, Suggesting to Pay Attention to Leading Companies in Wind Power with High Proportion and Outstanding Trading and Operation Capabilities.

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. The bank calculated that under the current bidding results, high-quality regional projects still have strong profit potential, but the scale of release is relatively small, and current policies support wind power growth more. It is recommended to focus on industry leaders with a high proportion of wind power and outstanding trading and operation capabilities. In terms of scale, the bank points out that there is support for wind power additions. By 2026, wind power additions projects have exceeded 56GW, with the bank estimating that there is support for adding over 100GW+ throughout the year, considering potential increases in large bases and offshore wind power. In contrast, the incremental centralized photovoltaic (PV) in 2026 is approximately 49GW. It is estimated that the volume of incremental distributed mechanism electricity projects from 2025 to 2026 will be in the range of 10 to 15GW, and the annual incremental PV still needs to observe the situation of large bases and subsequent batches. In terms of regions, Xinjiang, Hebei, and Ningxia together account for over 53%. The bank believes this may reflect considerations of government investment attraction and future demand expectations, but short-term electricity rates may rise. However, in Shanghai, Beijing, and Tianjin, the incremental capacity in 2026 is within 1GW, and there is still ample grid connection space. In terms of electricity prices and profitability, the overall electricity price results are better than market expectations, and high-quality regional projects have scarcity. The bank's calculations show that the capital IRR of projects in many places can reach over 10%, and stable regions in terms of grid connection layout may maintain good levels of electricity prices and profitability. However, there is limited capacity for release. In Gansu, Heilongjiang, Xinjiang (PV in 2026), and Shandong (PV in 2025), mechanism electricity prices are more than 20% below the bidding ceiling or coal benchmark price. The bank believes that this may be due to pressure on regional grid connection, current lower prices in new energy trading, and fierce competition for incremental projects under bidding rules. Under current price levels, profits for conventional projects are relatively difficult, requiring individual projects to have lower costs, better grid connection and grid locations, and higher utilization hours. The bank's statistics show that the top three groups in terms of resource acquisition for the five major centralized PV and wind power incremental projects account for 19% and 22% respectively. The groups with the highest resource acquisition include Huaneng Power (00902), China Power, and Datang Renew (01798). The bank believes that some groups may focus on developing new energy mega bases, and the order of installation of conventional projects by each group may be influenced by the "15th Five-Year Plan" group installation strategy and the release of incremental resources in advantageous regions.