The Zhitong Finance App learned that China Galaxy Securities released a research report saying that the energy consumption target assessment for the year ending the 14th Five-Year Plan is expected to catalyze demand for green electricity. At the same time, the industry's future earnings expectations are more clear after the establishment of a price settlement mechanism for sustainable development of new energy sources, and it is recommended to seize inflection point opportunities in the sector. In terms of thermal power, the recent rapid decline in coal prices is expected to reverse the market's pessimistic fundamental expectations for thermal power in 2025. It is recommended to focus on enterprises that have large coal exposure in the market and are located in regions where the price reduction of Changxie Electric Power was small in '25. In terms of hydropower and nuclear power, in the downward cycle of interest rates, hydropower and nuclear power with strong dividend attributes have long-term allocation value, while nuclear power also has high long-term growth support.

Incident: The National Energy Administration and the National Bureau of Statistics released electricity industry statistics and energy production: from January to February 2025, the country added 9.28 GW of installed wind power, a year-on-year decrease of 6.2%; the country added 39.47 GW of installed solar energy, an increase of 7.5%; the country added 3.88 GW of installed thermal power, a year-on-year decrease of 23.6%. From January to February 2025, the electricity consumption of the entire society was 1556.4 billion kilowatt-hours, an increase of 1.3% over the previous year.

The main views of China Galaxy Securities are as follows:

The cumulative installed capacity of new energy surpassed thermal power for the first time, and there is still plenty of room for growth in the future

As of the end of February 2025, the cumulative installed capacity of wind power and solar power was 529.82 GW and 926.22 GW, respectively, up 17.6% and 42.9% year-on-year respectively, accounting for 15.6% and 27.2% of the total installed capacity, respectively. The total installed capacity of new energy reached 1456.04 GW, exceeding the cumulative installed capacity of thermal power during the same period of 1448.09 GW. According to the National Development and Reform Commission and the National Energy Administration's “Special Action Implementation Plan for Optimizing Power System Regulation Capacity (2025-2027)” in December 2024, the power system regulation capacity will be significantly improved by 2027, supporting the rational consumption and utilization of more than 200 GW of new energy added per year from 2025 to 2027. It is expected that there will still be a lot of room for growth in subsequent new energy installations, and China's power generation installation structure will continue to be clean.

In January-February, there was a slight decline in power generation, and the decline in thermal power generation increased

In January-February, the regulated industrial power generation capacity was 1492.1 billion kilowatt-hours, a year-on-year decrease of 1.3%. In January-February, industrial thermal power, hydropower, nuclear power, wind power, and solar power generation were -5.8%/+4.5%/+7.7%/+10.4%/+27.4%. The year-on-year change from December was -3.2pct/-1.0pct/-3.7pct/-3.8pct/-1.1pct, respectively. Among them, the decline in thermal power generation in January-February was larger than in December, mainly due to the high base of last year's leap year and warm winters. Excluding leap year factors, the country's average power generation in January-February 2025 was 25.29 billion kilowatt-hours, an increase of 0.4%; according to monitoring by the meteorological department, the average temperature in January this year was 1.5℃ warmer than the multi-year average, 0.4℃ warmer than the same period last year; the average temperature in February this year was the same as the same period last year. The average temperature in central regions such as Hubei, Hunan, Henan, and Anhui, where the proportion of electricity consumption in winter is relatively high, is more than 1℃ warmer than the same period last year.

The growth rate of electricity consumption increased slightly in January-February. Among them, electricity consumption in industries such as information technology, wholesale and retail grew faster

In 2025, the entire society's electricity consumption was 1556.4 billion kilowatt-hours, up 1.3% year on year. Among them, the electricity consumption of primary, secondary, tertiary, and residents' household electricity consumption was 208/963.6/298/274 billion kilowatt-hours, respectively, up 8.2%/0.9%/3.6%/0.1% year-on-year, respectively. Driven by policies such as “dual” and “two new”, electricity consumption in some industries has maintained a relatively rapid growth rate. In January-February, electricity consumption in the national information transmission/software and information technology service industry increased 13.5% year on year; among them, driven by the rapid development of AI, big data, cloud computing, 5G, etc., electricity consumption for the national Internet and related services increased 25.2% year on year. In January-February, the country's electricity consumption in the wholesale and retail industry increased 9.0% year on year; among them, the electricity consumption of the national charging and switching service industry increased by 40.1% year on year, driven by the rapid development of electric vehicles.

Risk Alerts

The risk that the installed capacity will fall short of expectations; the risk of a sharp rise in coal prices; the risk of a reduction in feed-in tariffs; the risk of increased competition in the industry, etc.