Clean energy generation is the trend

The “12th Five-Year Plan for Energy Development” issued by the State Council puts forward the main tasks for the development of the power sector in the development and utilization of clean energy: the active and orderly development of hydropower, the safe and efficient development of nuclear power and the rapid development of renewable energy such as wind power, and emphasizes Coal clean and efficient development. We focus on the above points.

The main objectives of the electricity industry in the plan are basically the same as those previously published in the "12th Five-Year Plan for the Electric Power Industry": the electricity consumption for the 15 years is 615 million kwh. Based on this calculation, the electricity consumption will be 13-15 years. The growth rate should be controlled within 7.4%; the proportion of non-fossil energy consumption should be increased to 11.4%, and the proportion of non-fossil energy generation should be 30%. After completing this planning goal, the absolute value of installed capacity of hydropower, nuclear power, and wind power will all increase substantially.

Hydropower has become the focus of development. By 2015, it will start construction of 120 million kilowatts of conventional hydropower and 40 million kilowatts of pumped-storage power stations. The installed capacity of conventional hydropower and pumped-storage power stations nationwide reached 260 million kilowatts and 30 million kilowatts, respectively. According to this calculation, the newly approved installed capacity of hydropower will reach 30 million kilowatts per year in 13-15 years, and the newly installed capacity will reach 15 million kilowatts annually. Judging from the current progress of new hydropower approvals and commissioning projects, we expect that the overfulfillment of hydropower planning targets is a high probability event. We will comprehensively promote the construction and commissioning of hydropower bases such as the Jinsha River, Lancangjiang River, Yalongjiang River, Dadu River, Nujiang River, and the upper reaches of the Yellow River. The enterprises that have development and operation rights in the above major river basins will directly benefit from the new round of capacity release in the next three years. . It is recommended to pay attention to the Three Gorges Group (downstream of the Jinsha River), SDIC, Chuantiao (Yafu River), Guodian (Daduhe), and Huaneng (the middle reaches of the Minjiang and Jinsha Rivers).

There is more room for growth in nuclear power and wind power. After the nuclear accident in Fukushima, Japan, the progress of nuclear power projects stagnated, and the 12-year nuclear power installation remained at 12.57 million kilowatts. According to the plan, by 2015, the installed nuclear power capacity will reach 40 million kilowatts, and the scale under construction will be 18 million kilowatts. According to this calculation, the growth of nuclear power installed capacity is relatively large, CAGR 47% in 13-15 years. We expect the installed capacity of nuclear power plants to be 900, 1,000 and 9 million kilowatts respectively in 13-15 years. In addition, during the "12th Five-Year Plan" period, only coastal projects will be arranged. With the nuclear power production, there will be a certain impact on regional thermal power in Guangdong, Zhejiang, and Fujian provinces. Wind power will accelerate the construction of wind power bases in Inner Mongolia, Gansu and Shandong, and Jiangsu, as well as the distributed development and utilization of wind energy. By 2015, the installed capacity of wind power generation will reach 100 million kilowatts, and CAGR18% will be 13-15 years. It is recommended to pay attention to Longyuan Power (916 HK).

The growth rate of thermal power has slowed down, emphasizing clean development. Optimize the installation structure, continue to promote the "large pressure," eliminate backward production capacity, and develop cogeneration and gas-fired units. During the “12th Five-Year Plan” period, the country’s newly planned coal-fired power units were 300 million kilowatts, and the installed capacity was in line with the growth of 6.4%, of which 70 million kilowatts were cogeneration and 30 million kilowatts of gas-fired power stations. Combined with the construction of large-scale coal and electric power bases, we will continue to support coal transmission and transmission, and gradually increase the proportion of transmission. Steady progress was made in the southwest energy base to the East China, Central China, and Guangdong Province power transmission channels, and the Ordos Basin, Shanxi, Xilin Gol League energy bases to North China, Central China, and East China. It can focus on the benefits of Inner Mongolia Huadian and other companies that are based on the model of 'West Power Transmission to the East'.

Investment advice: Starting from the space for hydropower development, it is recommended to increase the shareholding of Yangtze Power and Chuantou Energy. Starting from the advancement of coal-fired electricity delivery projects, Inner Mongolia Huadian, the largest direct beneficiary of the 'West Power Transmission Project', is recommended.