The Zhitong Finance App learned that Debon Securities released a research report saying that the National Development and Reform Commission clarifies the full guaranteed acquisition of renewable energy electricity and the scope of the acquisition, implements the main responsibilities related to the electricity market, continuously improves supervision mechanisms, and promotes the rapid development of renewable energy sources. Green power operators are expected to be the first to benefit. Key recommendations: Three Gorges Energy (600805.SH), Longyuan Electric Power (001289.SZ), Jidian Co., Ltd. (000875.SZ); Recommended attention: China Green Power (000537.SZ), Jiangsu Xinneng (603693.SH), Zhejiang Xinneng (600032.SH), Energy-saving Wind Power (), Funeng Co., Ltd. (USD). 601016.SH 600483.SH

Incident: On March 18, the National Development and Reform Commission issued the “Measures for the Supervision of Full Guaranteed Acquisition of Renewable Energy Electricity” (hereinafter referred to as the “Measures”), which is an amendment to the “Measures for the Supervision of Full Acquisition of Renewable Energy Electricity by Power Grid Enterprises” issued by the former National Electricity Regulatory Commission on September 1, 2007, and will take effect on April 1, 2024.

Entities that fully acquire electricity have changed, and acquirers have gradually diversified

(1) The entity responsible for the acquisition of full renewable energy electricity guarantee is no longer the power grid company. Referring to the official accounts of photovoltaics, the “Measures” define feed-in electricity for renewable energy power generation projects as consisting of two parts: guaranteed electricity purchased and market-traded electricity. Among them, guaranteed electricity purchases refer to the amount of electricity that relevant members of the electricity market should assume the obligation to purchase in accordance with relevant regulations such as the national renewable energy consumption guarantee mechanism and share targets.

The amount of electricity traded in the market refers to the amount of electricity whose price is formed through market-based methods. Electricity sales companies and electricity users and other relevant members of the electricity market share responsibility for the acquisition. The responsible entity for the acquisition of full guarantee of renewable energy electricity has changed from a single power grid enterprise in the past to a power grid enterprise, power dispatching agency, electricity trading agency, electricity sales company, and electricity user. The “Measures” also refine the division of labor and responsibilities of various entities, mainly in the three areas of guaranteed acquisitions, market transactions, and temporary scheduling.

(2) Highlight market-based methods to achieve optimal allocation and consumption of resources. The “Notice on Establishing and Improving Renewable Energy Electricity Consumption Guarantee Mechanisms” issued by the National Development and Reform Commission and the National Energy Administration in 2019 clearly states that electricity sales companies and electricity users jointly assume consumption responsibilities. On this basis, the “Measures” clearly stipulate the main responsibility for market-based transactions. Electricity sales companies and electricity users and other relevant members of the electricity market share responsibility for the acquisition of market-based electricity transactions whose prices are formed through market-based methods.

The purchase price emphasizes market-based transactions to provide a policy basis for renewable energy entering the market

Referring to the official accounts of photovoltaics, the “Measures” reflect a major shift in the mechanism where the purchase price of renewable energy electricity is changed from full government pricing to partial government pricing, and the rest of the price is formed through market-based transactions, making it clear that market-based electricity prices in feed-in electricity generation projects are formed through market-based methods.

According to Debon Securities, in recent years, the scale of renewable energy electricity participation in market-based transactions has been expanding year by year. In 2023, renewable energy will account for more than 40% of electricity transactions in the electricity market. The “Measures” were introduced to further stipulate issues such as market-based pricing of renewable energy and participation in the electricity market to provide a policy basis for renewable energy entering the market.

The installed scale of new energy is rapidly increasing, and the value of green electricity may become more prominent

In 2023, the country's total installed capacity of clean energy reached 1.45 billion kilowatts, of which the total installed capacity of solar energy and wind power exceeded 1 billion kilowatts, accounting for nearly 36% of the total installed capacity of power generation. Among them, the total installed capacity of photovoltaics reached 216 million kilowatts in 2023, an increase of 147.1% over the previous year. The “Measures” issued this time apply to non-hydrous renewable energy power generation such as wind power generation, solar power generation, biomass power generation, marine energy power generation, geothermal power generation, etc. Debon Securities expects that with the gradual implementation of the “Measures”, it will continue to promote green electricity consumption and increase the consumption of new energy. Green power operators are expected to benefit.

Risk warning: Policy progress falls short of expectations, electricity prices are falling short of expectations, and the development of new energy sources falls short of expectations.