Track of Hong Kong Concept | CECEP Solar Energy's installed capacity is expected to exceed coal-fired power, and investment in China's power grid will approach 5 trillion yuan in the next 5 years (with concept stocks)

On February 2nd, China Power Enterprises Association (referred to as CP) published the "Analysis and Forecast Report on the National Power Supply and Demand Situation for the Years 2025-2026" (referred to as the "Report"). It is estimated that the total electricity consumption of the whole society will increase by 5% to 6% in 2026, and it is predicted that the installed capacity of CECEP Solar Energy will exceed that of coal-fired power for the first time in 2026. By the end of the year, the installed capacity of wind power and CECEP Solar Energy will reach half of the total installed capacity. Experts predict that by the end of 2026, the national installed capacity of power generation will reach around 4.3 billion kilowatts. Among them, non-fossil energy power generation capacity will be 2.7 billion kilowatts, accounting for about 63% of the total installed capacity; the share of coal-fired power installed capacity will drop to around 31%. Industry analysis believes that China's energy structure transformation will continue to accelerate, and the future energy system will be dominated by clean energy such as wind power and photovoltaics. However, due to the instability of new energy generation, the role of the grid becomes particularly important. In this context, grid enterprises have successively announced an increase in fixed asset investment. Recently, State Grid Corporation announced that fixed asset investment during the "14th Five-Year Plan" period is expected to reach 4 trillion yuan, an increase of 40% compared to the "13th Five-Year Plan". Southern Power Grid Company also announced that fixed asset investment in 2026 will be arranged at 180 billion yuan, hitting a five-year high for the fifth consecutive year, with an average annual growth rate of 9.5%. The industry generally expects that the total investment of Southern Power Grid during the "14th Five-Year Plan" period will reach around 1 trillion yuan. Based on this calculation, the total investment of the two major power grids will approach 5 trillion yuan in five years, far exceeding the 2.64 trillion yuan in the "13th Five-Year Plan" period and the 2.85 trillion yuan in the "14th Five-Year Plan" period. On December 31st of last year, the National Development and Reform Commission and the National Energy Administration jointly issued the "Guiding Opinions on Promoting the High-Quality Development of the Grid", requiring that by 2030, the new type grid platform with backbone grids and distribution grids as important bases and smart microgrids as beneficial supplements should be preliminarily established, and the main backbone microgrid should have a clear interface, complete functions, smart operation, and efficient interaction. By 2035, the coordinated development of backbone grids, distribution grids, and smart microgrids will be fully realized, the safety governance mechanisms of all levels of grids will be more complete, the lifecycle of grid facilities will be significantly improved with intelligence and digitalization, effectively supporting the safe and stable operation of the new type power system and the healthy development of various grid-connected entities, supporting the realization of national contributions, and providing strong power guarantee for basically achieving socialist modernization. Recently, Zhang Zhigang, Chairman of State Grid, stated that they should give full play to the basic support and investment-driving role of the grid, leverage greater efforts and practical measures to help expand domestic demand and stabilize growth, increase grid investment, adhere to moderately advanced power development, closely align with major national strategies, connect with the construction of "two news" and "two heavies", and more effectively drive social investment and industrial chain supply chain development. Analysts believe that grid engineering has the characteristics of large investment scale, long industrial chain, and strong driving force. Accelerating the construction of major grid projects can fully exploit the driving force, effectively promote investment growth, industrial development, and improvement of people's livelihood. In addition, increasing grid investment is also to cope with the increasing domestic electricity demand, adapt to the construction of the new type power system, match the continuous addition of new energy power capacity, and is also an important measure to deal with the problem of new energy consumption. Analytical institutions believe that the nearly 5 trillion yuan investment of the two major power grids will generate a full industry chain driving effect, and the five major sectors such as UHV, main grid equipment, and distribution network upgrades will directly benefit. CITIC SEC stated that during the "14th Five-Year Plan" period, grid construction is expected to focus on the main line of interconnection and digitization, and UHV, DC transmission, smart microgrids, and other directions are expected to remain high in investment prosperity. Two key directions are recommended: 1) domestic power equipment leading enterprises closely related to the investment prosperity of domestic grid and major projects such as UHV, flexible DC, etc.; 2) leading enterprises benefiting from major construction investment at home, while also taking into account overseas high prosperity or demands in emerging areas such as AI. Related concept stocks: Zhuzhou CRRC Times Electric (03898): The company has been deeply involved in the field of power transmission and distribution for nearly 20 years, having served over 40 domestic and international UHVDC and flexible DC transmission projects such as Wudongde, Hami-Zhengzhou, and Brazil's Belo Monte, with rich practical experience in projects. Currently, the company's market share in the domestic power transmission and distribution field is around 50%. The company has a wide range of products and can provide complete solutions. In the future, it will continue to develop products with larger capacity, higher power density, and higher reliability according to the needs of the grid and energy applications. HUADIAN POWER (01071): The company's wholly-owned subsidiary HuaDian Longkou Power Generation Co., Ltd. recently successfully completed the 168-hour full-load trial operation of the second unit of the HuaDian Longkou Phase IV 266 MW Cogeneration Project, and officially put it into commercial operation. With the completion of both 66 MW ultra-supercritical units of the HuaDian Longkou Phase IV project, new energy has been injected into the regional energy security and green low-carbon development. CHINA POWER (02380): The planned installed capacity of the wind and solar integrated demonstration project of the company's subsidiary China Power (Pu'an) New Energy Co., Ltd. is 1,000 MW, including 700 MW of photovoltaic power generation, 300 MW of wind power generation, and energy storage facilities at different stages. The project is located in Guizhou Province, China, and adopts centralized control and intelligent dispatching to achieve 24-hour full-site equipment operation monitoring, deeply integrating advanced models of smart station construction, ensuring the operation of the project to be excellent, safe, and efficient. This project is not only one of the key projects in the power development plan of Guizhou Province during the "14th Five-Year Plan" period but also a typical example of innovative and optimized energy structure in the area of Southern Power Grid.