Wisdom Wealth News APP learned that Guolian Securities released a research report stating that recently, the National Development and Reform Commission and other three departments jointly issued the "Action Plan for Speeding up the Construction of a New Type of Power System (2024-2027)", this "Action Plan" focuses on the key areas that urgently need to be breakthroughs in the construction of the new type of power system in the near future, selects the directions with high returns on investment, great potential for improving efficiency, and strong leading effects, and focuses on nine special activities in 2024-2027 to promote the construction of a new type of power system. The subsequent expansion and intelligent transformation of the power distribution network are expected to speed up; by expanding the outbound channel, improving the consumption of new energy according to local conditions and other methods, the power generation of green power operators is expected to increase, and the income rate is expected to rise; in addition, the energy storage revenue mechanism is expected to expand, and the utilization rate is expected to improve.

Guolian Securities' main points are as follows:

The main network construction is steadily advancing, and the smart grid transformation is expected to accelerate.

On the main network side, the "Action Plan" proposes to "optimize and strengthen the main network of the power grid" and "advance the application of advanced technologies in the construction of new transmission channels". According to the announcement, State Grid's annual power grid investment in 2024 will exceed 600 billion yuan, which is 71.1 billion yuan more than the newly added investment in 2023. The newly added investment will mainly be used for the construction of ultra-high voltage AC/DC projects and the upgrade of power grid digitalization and intelligence. Guolian Securities pointed out that as of July 2024, the Shanbei-Anhui, Gansu-Zhejiang ultra-high voltage direct current transmission projects have been launched, and 1-2 more lines may be approved for construction in the second half of the year. With the large-scale grid connection of new energy sources causing increased fluctuations in the power grid, there will be an increasing demand for flexible DC. On the distribution network side, the "Action Plan" proposes to "adapt to the new requirements of large-scale high-proportion new energy and new types of entities for power scheduling", "explore new active distribution network scheduling modes that use microgrid coordination of the main and distribution systems", and the subsequent expansion and intelligent transformation of the power distribution network are expected to speed up.

Solving the new energy consumption problem is expected to increase the income rate of green power operators.

The installed capacity of new energy has reached the main level. As of H1 2024, the newly installed capacity of wind and photovoltaics is 0.128 billion kW, accounting for 84% of the total newly installed capacity, and the total grid-connected capacity is 1.18 billion kW, exceeding the installed capacity of coal-fired power for the first time. New energy has become the main power source, but the new energy consumption problems, such as the mismatch between power generation and consumption and the mismatch between time and space, are severe. This action plan proposes to "increase the proportion" of electricity transportation, construct "system-friendly new energy power stations" (new energy confidence output increases to more than 10%), "computing power and electricity coordination projects", and "complementary intelligent projects for wind and solar energy storage microgrid", in order to improve the consumption level of projects. By expanding outbound channels, improving new energy consumption according to local conditions and other methods, green power operators' power generation is expected to increase, and the income rate is expected to rise.

Power system adjustment optimization, pay attention to the new generation of coal-fired power transformation, virtual power plants, and energy storage.

On the one hand, the increase in the electrification rate of the terminal stimulates the increase in the load. In 2023, the peak load of the power grid increased by 3.84% year-on-year, and it is expected to increase by 0.1 billion kW year-on-year in 2024; on the other hand, the fluctuation of new energy output, the access of new types of loads such as charging stations, and other factors add pressure to the stable operation of the power grid. Therefore, the power system needs to improve its regulation ability from both aspects. The action plan proposes to carry out the "new generation of coal-fired power test and demonstration", and the scope of transformation is expected to expand. In addition to flexibility transformation, zero-carbon, low-carbon fuel blending, CCUS and other technologies are expected to be promoted simultaneously. The demand-side response requirements of typical regions with high proportions are expected to be promoted, and virtual power plants are expected to be constructed in large quantities. In terms of energy storage, the plan proposes to "construct a number of shared energy storage power stations and explore the application of new energy storage technologies", and the revenue mechanism of energy storage is expected to expand, and the utilization rate is expected to improve.

Investment suggestion: focus on the leading companies in the electric power industry chain.

Recommendations: 1) the smart grid transformation is accelerating, and we recommend focusing on Nari Technology (600406.SH) and XJ Electric Co., Ltd. (000400.SZ); 2) the scope of coal-fired power transformation is expanding, and we recommend focusing on equipment suppliers and engineering companies such as Dongfang Electric Corporation (600875.SH) and Huadian Heavy Industries (601226.SH); 3) the utilization rate of energy storage is improving, and the revenue mechanism is being straightened out. We recommend focusing on Sungrow Power Supply (300274.SZ) and Sineng Electric (300827.SZ); 4) virtual power plants are expected to welcome large-scale construction, and we recommend focusing on software platform manufacturers; 5) the improvement of new energy consumption is expected to increase the profits of operators, and we recommend focusing on Three Gorges Energy (600905.SH), etc.

Risk warning: ultra-high voltage construction is slower than expected; policy promotion is slower than expected; new energy consumption pressure.