Capacity electricity prices are about to come out The value of thermal power enterprises may be reassessed
On September 12, Dalian thermal power rose to the limit, and thermal power stocks such as Huaneng International, Huadian International, Hangzhou Thermal Power, and Wanneng Power followed suit. The reporter of China Securities News learned from industry insiders that the current market is concerned about the expectation of thermal power capacity and electricity price reform policies, and thermal power companies are expected to increase profits under the stimulation of this policy.
At present, some provinces in China have implemented capacity electricity price policies, but due to the different energy structure and power supply and demand of different provinces, there are also certain differences in capacity electricity price policies. The industry expects that in the future, more provinces will introduce policies related to capacity electricity prices, which is expected to raise the overall valuation of the thermal power sector.
The introduction of policies ushered in a good time window
Benefiting from the expectation of thermal power capacity price reform, the thermal power sector led the rise on September 12.
At present, China has opened the capacity compensation mechanism, pumped storage and natural gas have implemented capacity electricity prices. On May 15, the National Development and Reform Commission issued the Notice on Provincial Power Grid Transmission and Distribution Prices and Related Matters in the Third Regulatory Cycle (the "Notice"), clarifying that the user-side electricity consumption fee includes the system operation fee, and the system operation cost includes the capacity electricity price and ancillary service fee. Industry insiders believe that this indicates that the cost of capacity electricity prices will be borne by users, and the related cost channeling channel has been fully opened.
The Notice announces the approved capacity electricity prices for the 48 pumped storage power stations in operation and planned to be put into operation by the end of 2025. According to the newly released pumped storage capacity electricity price list, the capacity electricity price of each power station varies greatly. Among them, the highest is Xianghongdian Power Station in Anhui Province, with a capacity electricity price of 823.34 yuan / kW, and the lowest capacity electricity price of Panjiakou Power Station in Hebei Province, only 289.73 yuan / kW. Southwest Securities analysis believes that in the short term, because the capacity of some power stations is lower than expected, the approval has reduced the profitability of some enterprises. However, in the long run, the issuance of the Notice has released a clear signal of electricity prices and improved the profitability stability of pumped storage power plants.
Shenwan Hongyuan public utility analyst Zha Hao said in an interview with reporters that the more important thing in capacity electricity prices is to improve the revenue structure of thermal power and improve the willingness of traditional power supply construction. At present, coal prices are at a relatively low level, which is a good time window for the introduction of capacity electricity price policies.
At present, China is establishing a five-in-one comprehensive electricity market focusing on the medium and long-term market, spot market, auxiliary service market, capacity electricity price and carbon market, providing the most basic mechanism support for China's long-term new energy transformation.
"The penetration rate of new energy has further improved, but it is difficult for new energy to provide effective power support during peak periods, and the construction of traditional power sources is indispensable." New energy has gradually become the main body of electricity, which will inevitably reduce the utilization rate of traditional power sources (mainly thermal power), and in turn will reduce the expected benefits of traditional power sources, and then reduce the willingness of traditional power sources to invest. Therefore, the construction of new power systems requires the establishment of a capacity cost recovery mechanism for traditional power sources. Cha Hao told reporters.
Thermal power sector valuations may be reshaped
Many institutions believe that the introduction of thermal power capacity and electricity pricing policies is beneficial to power operators and thermal power equipment manufacturers.
"After the introduction of capacity electricity prices, the revenue structure of thermal power units will be improved, and thermal power operators are expected to gradually switch from cyclical attributes to utility attributes, and their valuations are expected to increase." Cha Hao said.
Cha Hao said that the introduction of capacity electricity prices will solve the problem of insufficient willingness to build thermal power and promote the process of replacing thermal power units, so the thermal power capacity price policy will benefit thermal power equipment manufacturers. In addition, the introduction of capacity electricity prices will solve the revenue problem under the low utilization rate of thermal power, thereby promoting the large-scale implementation of flexibility transformation.
It is worth mentioning that at present, some provinces in China have begun to implement capacity electricity price policies, and Shandong, Guangdong and Yunnan have started pilots, but due to the different energy structure and power supply and demand of different provinces, capacity electricity price policies are also different. The industry expects that more provinces will introduce relevant policies in the future, and the profits of thermal power companies are expected to increase.
The Notice on Matters Related to the Trial Implementation of Capacity Compensation Electricity Prices for Coal-Fired Units in the Electricity Spot Market issued in April 2020 stipulates that before the operation of the capacity market, coal-fired generator sets participating in the spot market will trial capacity compensation electricity prices, and the compensation fee will be collected from the user side, and the capacity compensation electricity price standard is tentatively set at 0.0991 yuan/kWh.
The Implementation Plan for the Market-oriented Reform of Coal-fired Power Generation in Yunnan Province, issued in December 2022, stipulates that the adjustable space between the maximum power generation capacity and the minimum power generation capacity of coal-fired power generation enterprises will participate in the regulated capacity market transaction, and the trial period will first participate in the market-based market transaction of coal-fired power generation regulated capacity at 40% of the rated installed capacity of bituminous anthracite, and dynamically adjust it according to changes in market supply and demand.
