Cathay Pacific Haitong: Electricity demand is still rising, long-term optimism about thermal power

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that in November, industrial power generation capacity was 779.2 billion kilowatts, YOY +2.7% (October +7.9%), YOY November/October: fire -4.2%/7.3%, water +17.1%/+28%, nuclear +4.7%/+4.2%, wind +22%/-12%, light +23%/+6%. In January-November, industrial power generation was 8856.7 billion kilowatts, YOY +2.4% (January-October YOY +2.3%). Demand for electricity is still on the rise, and we are optimistic about thermal power for a long time.

Cathay Pacific Haitong's main views are as follows:

The Energy Administration punishes coal-fired power for colluding to report high prices, and it may take a longer time to look at it. In the context of the central government implementing anti-domestic charges and anti-domestic price increases in various industries such as upstream coal, silicon, lithium, etc., the Energy Administration penalized 5 cases where power plants announced prices in a series. 1. The downstream electricity manufacturing industry, similar to silicon photovoltaics, power cables, and machinery and equipment, is in immediate demand in the global market. Export growth drives a new high surplus and moderate transmission costs overseas, which is beneficial to the whole country; 2. Moderately raising electricity prices, which is beneficial to the development of energy storage, can pave the way for 3060 carbon neutrality and achieve solemn promises. 3. Under the requirements of a unified market in all provinces across the country, reducing electricity prices is neither good for carbon neutrality, nor is it beneficial to reverse internal circulation, and it may also miss the best period to raise prices for products that are just needed overseas. In addition, moderately raising electricity prices is also beneficial for energy saving and consumption reduction, and achieving carbon neutrality.

The second-round electronic price auction mechanism may easily be lower than the first round. 1. On December 15, the second batch of incremental mechanical electricity in Jiangxi Province: 135.4 million kilowatts of wind power, the electricity price was 0.365 yuan/kilowatt (the first batch was 0.375 yuan/kilowatt hour); photovoltaic power was 749.9 million kilowatts, and the electricity price was 0.379 yuan/kilowatt (the first batch was 0.330 yuan/kilowatt hour). The second batch of electricity prices decreased from the first batch. 2. Jiangsu scheduled the highest electricity consumption load of 144 million kilowatts this year, YOY +6.06% (YOY +6.06% in October). 3. The price of mechanical electricity in Jilin in '26:0.25 for wind power and 0.33 for photovoltaics. There is relatively more wind power surplus in Jilin.

The growth rate of thermal power was negative again in November. National Bureau of Statistics: In November, industrial power generation capacity was 779.2 billion kilowatts, YOY +2.7% (October +7.9%), YOY November/October: fire -4.2%/7.3%, water +17.1%/+28%, nuclear +4.7%/+4.2%, wind +22%/-12%, light +23%/+6%. In January-November, industrial power generation was 8856.7 billion kilowatts, YOY +2.4% (January-October YOY +2.3%). From January to November 2025, the country's fixed asset investment was -2.6% year-on-year, with private investment falling 5.3%; in November, it fell 1.03% month-on-month. By industry, investment in the secondary sector increased by 3.9%. Among them, investment in electricity, heat, gas and water production and supply increased by 10.7%, investment in manufacturing increased by 1.9%, investment in mining increased by 4.0%; investment in the tertiary sector decreased by 6.3%.

The price spread of Anhui Electricity Sales Company is still between 0.01-0.04 points: From January to November 2025, the Anhui Electric Power Retail Market settled 132.5 billion kilowatts of electricity, 101 electricity sales companies and 27,810 electricity users participated in retail transactions. The average settlement price in the retail market was 0.4182 yuan/degree (January-October was 0.4183 yuan/degree), the average settlement price in the wholesale market was 0.3970 yuan/degree (January-October was 0.3973 yuan/degree), and the wholesale-retail price difference was 0.0211 yuan/degree (0.0209 yuan/degree from January to October). Among them, there were 27 electricity sales companies with price differences of less than 0.01 yuan/degree (accounting for 11.2% of electricity), 21 companies with 0.01-0.02 yuan/degree (accounting for 39.6%), 16 companies with 0.02-0.03 yuan/degree (accounting for 31.2%), and 15 companies with 0.03-0.04 yuan/degree (accounting for 13.1%), higher than 0.04 yuan/degree (accounting for 4.9%)

Spot electricity in Qinghai is still at a maximum price of 0.65 yuan, making it difficult to develop energy storage. On December 16, the “Supplementary Provisions on the Qinghai Electric Power Spot Market Continuous Settlement and Trial Operation Plan (Draft for Comments)” were issued: (1) Minimum declaration and payment price limit 0.08/upper limit of 0.65 yuan/degree. (2) Level 2 has a price limit of 0.3 yuan/degree.

Risk warning. (1) Market style fluctuates greatly due to economic growth expectations and monetary policy. (2) The direction of electricity marketization has been determined, but the development time is difficult to determine.