Guotai Haitong: The logic of electricity prices continues to be realized. The profits of power companies in the first quarter may increase.

Guotai Haitong released a research report stating that, according to statistics from the National Energy Administration, as of March, the cumulative installed power generation capacity in China was 3.43 billion kilowatts, YOY +14.6%. By March 2025, the total electricity consumption in society was 828.2 billion kilowatt-hours, YOY +4.8%. Currently, the further north you go in China, the better the thermal power electricity price: regions with higher proportions of new energy sources face scarcity in peak hours for thermal power. At the same time, the decrease in annual contract electricity prices in southern China has also put pressure on thermal power plants in the south, causing them to shift their focus from pursuing electricity quantity to pursuing electricity price and efficiency. Recently, spot electricity prices in southern China have started to rise. The possibility of a bottoming out in electricity prices in northern China is quite high, while regional differences in the south still exist. In the future, we may witness two historical firsts: a rise in spot electricity prices in 2025 and an increase in annual contract prices in 2026.