According to the Zhitong Finance APP, CITIC Construction Investment has released a research report stating that under the current circumstances, safety redundancy capacity is continuously decreasing, and advancing the construction of controllable power sources is urgent. Assuming that the maximum electricity load grows by 6% annually, and the system's effective capacity is maintained at 1.45 times the maximum electricity load, there will be an effective capacity power gap of about 30GW starting from 2024, which will expand year by year, increasing by approximately 130-170GW annually by 2030. The average annual demand for coal power installed capacity during the 14th Five-Year Plan period is estimated to be 60-80GW, which is significantly different from the current market expectation of 30-40GW. The construction of controllable effective capacity will bring performance elasticity to related equipment companies.
<h2>The main points of CITIC Construction Investment are as follows:</h2>
The construction of new energy requires the configuration of capacity power sources to adjust for extreme fluctuations
CITIC Construction Investment pointed out that assuming the maximum electricity load grows by 6% annually, and the system's effective capacity is maintained at 1.45 times the maximum electricity load, there will be an effective capacity power gap of about 30GW starting from 2024, which will expand year by year, increasing by approximately 130-170GW annually. Assuming that hydropower (including pumped storage) and nuclear power each add 30GW and 10GW annually, and energy storage adds 50, 70, 80, 90, 100, and 100GW from 2025 to 2030, it is expected that coal power will need to add between 60-80GW annually, as coal power remains an indispensable provider of effective capacity.
Stable high coal power &amp; incremental hydropower will bring performance elasticity business exposure analysis to related equipment companies
(1) From the business structure of Dongfang Electric, Harbin Electric, and Shanghai Electric, the proportion of coal power and hydropower-related businesses is relatively high: in 2024, the combined revenue proportion of coal power and hydropower for Dongfang Electric and Harbin Electric is 28% and 54%, respectively, while the coal power order proportion for Shanghai Electric in 2024 is 21%; (2) In addition to power equipment, the increase in coal power and hydropower will drive the growth of demand for supporting automation equipment, with NARI-TECH, SAC, and SIFANG having revenue proportions from coal and hydropower businesses in 2024 of approximately 8%, 17%, and 9%, respectively.
Based on installed capacity calculations, future orders for power equipment companies can be estimated, with a significant expected difference in the growth rate of controllable power sources
During the 14th Five-Year Plan period, if the average annual bidding/installed capacity is 75GW, the coal power orders from the three major electrical companies will remain stable compared to the peak period in 2024, with an incremental value of 13.9 billion yuan compared to current market expectations. Additionally, the new hydropower orders from the three major electrical companies could reach 16.6 billion yuan, which has about double the space compared to the orders of Dongfang Electric and Harbin Electric in 2024, and there is several times growth potential compared to the hydropower revenue in 2024.
Related targets
(1) Looking ahead to the 14th Five-Year Plan period, there is still a significant expected difference in the construction of controllable power sources, related power equipment manufacturers include Dongfang Electric (600875.SH), Harbin Electric (600028.SH), and Shanghai Electric (601727.SH).
(2) Upstream component manufacturers of coal power and other related companies in the industrial chain include Wujin Buxiu (603878.SH), Shengde Xintai (300881.SZ), Xizi Clean Energy (002534.SZ), Changbao Co., Ltd. (002478.SZ), Longyuan Technology (300105.SZ), Qingda Environmental Protection (688501.SH), and Huaguang Huaneng (600475.SH)
JiuLi Special Materials (002318.SZ) and others.
(3) Companies related to power generation automation equipment: NARI-TECH (600406.SH), SAC (600268.SH), SIFANG (601126.SH)

601126

600406

600268

600875

01072

601727

02727

CITIC Construction Investment released a research report stating that the current safety redundancy capacity is decreasing, making the promotion of controllable power construction urgent. It is expected that the average annual demand for coal power installed capacity during the 14th Five-Year Plan period will be 60-80 GW, far exceeding the market expectation of 30-40 GW. By 2030, the power supply gap will expand year by year, and related equipment companies will benefit from performance elasticity. Key points include: the construction of new energy requires the configuration of capacity power sources to cope with extreme situations, and coal power remains an important provider of effective capacity

Zhitong

SIFANG

NARI-TECH

DEC.LTD

DONGFANG ELEC

Shanghai Electric

SH ELECTRIC

CITIC Construction Investment: There is still a significant expectation gap in controllable power source construction, which is expected to bring performance elasticity to related equipment companies