The entire electricity sector has declined. As of press time, Huaneng Power International (00902) dropped 5.26%, trading at HK$5.4; China Resources Power Holdings (00836) fell 3.48%, trading at HK$17.18; Huadian Power International (01071) decreased by 2.91%, trading at HK$4.01.
According to Zhitong Finance, the entire electricity sector has declined. As of press time, Huaneng Power International (00902) dropped 5.26%, trading at HK$5.4; China Resources Power Holdings (00836) fell 3.48%, trading at HK$17.18; Huadian Power International (01071) decreased by 2.91%, trading at HK$4.01.
In terms of news, on January 30, the National Development and Reform Commission and the National Energy Administration jointly issued the 'Notice on Improving the Capacity Electricity Price Mechanism on the Generation Side.' The notice mentioned 'classifying and improving the capacity electricity price mechanisms for coal power, natural gas power generation, pumped storage, and new energy storage, while optimizing the electricity market mechanism.'
CITIC Securities stated that after the 'Notice' clarifies the improvement of the coal power capacity pricing mechanism, regions may adjust the lower limit of medium- and long-term coal power market transaction prices within the province according to supply and demand in the electricity market and variable costs of all units participating in the market. Additionally, the requirement for signing a percentage of medium- and long-term coal power contracts will be appropriately relaxed. At the same time, the 'Notice' encourages both supply and demand sides to adopt flexible pricing mechanisms. We believe that the removal of the coal power transaction floor could lead to a further decline in the average electricity price in some provinces.
