CITIC Securities: Short-term impact on coal prices, differentiation in extraction and storage, energy storage to provide support

CITIC Securities pointed out that the improvement of the capacity mechanism on the generation side will promote the development of flexible power sources and facilitate the integration of new energy sources. The increase in capacity prices for coal-fired power, along with the removal of the lower limit on medium and long-term prices, may create downward pressure on comprehensive electricity prices in regions with excess capacity or high benchmark electricity prices. The pricing mechanism for energy storage has undergone major changes, with the profits of new energy storage projects becoming more dependent on the actual demand of the local electricity market, leading to a return to rationality in industry investment and development. The introduction of capacity pricing policies in the field of energy storage will be a key driving force for independent energy storage development. The long-term electricity prices in some provinces may further decrease after the removal of the lower limit, which could impact the electricity market prices for nuclear power in some provinces. The development of flexible power sources for new energy sources will help improve integration and alleviate downward pressure on electricity prices.