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Industry News
In-depth report: Jiangsu's medium- and long-term direct transaction volume increases by the smallest proportion in 2020, and the market-oriented transaction price is stable
Polaris Power Sales Grid News:Jiangsu Province has the smallest increase in medium- and long-term direct transaction volume in 2020.In 2019, the national medium- and long-term direct transaction electricity was 2.2 trillion kWh, accounting for 30% of the consumption (including the trading electricity of various markets organized by the trading center was 2.8 trillion kWh, accounting for 39%). Among them, coal-fired power in Jiangsu, Guangdong, Zhejiang and other countries have achieved marketization (including various market-oriented electricity in the trading center, we expect that Jiangsu's thermal power will be basically fully marketized in 2019). The transaction increment in Jiangsu, Fujian, Jiangxi and other provinces in 2020 only accounts for 1%-6% of the total electricity consumption of the province. It is difficult to expand the market-oriented power supply through coal-fired power. We believe that thermal power generation companies similar to those in various provinces may be less affected by the expansion of future market-oriented discount scope.
(Source: Haitong Securities Author: Wu Jie, Zhang Lei, Fu Yifan, Dai Yuancan)
There is little room for market-based coal-fired power transactions in coastal provinces.The marketization of coal-fired power in coastal developed provinces such as Jiangsu, Guangdong, Zhejiang, and Fujian has been relatively sufficient. More than half of the coal-fired power have participated in the annual medium- and long-term market-oriented transactions. We expect that coal-fired power in these provinces will be in the future.Electricity PriceAnd electricity is less negatively affected by marketization. At present, if monthly transactions are not considered, we estimate that the national average remaining space for marketization of coal-fired power is higher than 50%, and after consideration, it is estimated that it should be between 40% and 50%. From an investment perspective, we can pay more attention to coal-fired power manufacturers in provinces with limited marketization incremental space in the future, such as Jiangsu, Guangdong, Guangxi, Zhejiang and other provinces.
Market-oriented transaction prices are stable.Jiangsu and Guangdong 2020 AnnualMarket-oriented electricity tradingThe discount range of prices is 2-5 cents/kWh, which is 2-4 cents/kWh compared to the discount in 2019. Considering the increase in market-oriented electricity, the average discount of thermal power prices in the two provinces in 2020 is 0.3-1.1 cents/kWh. This part of the concession requires the coal price to fall by 10-38 yuan/ton. According to the latest (2020/2/20) Qinhuangdao 5500 thermal coal market price of 573.5 yuan/ton, the coal prices in Jiangsu and Guangdong need to fall by 2% and 7% respectively. We expect that after 2020, the national thermal power market growth rate will gradually decrease, and the impact on companies and prices will also weaken, and industry prices will be more determined by local supply and demand. In the short term, the electricity price discount in Jiangsu, Guangdong, Zhejiang, Fujian and other provinces and cities have relatively little pressure.
1. Jiangsu Province has the smallest increase in medium- and long-term direct transaction volume in 2020
In 2019, the national medium- and long-term direct trading electricity volume was 2.2 trillion kWh, accounting for 30% of the consumption volume. The trading electricity volume of various markets organized by the trading center was 2.8 trillion kWh, accounting for 39%. In 2019, Yunnan Province had the highest proportion of medium- and long-term direct trading electricity, reaching 58%. As a major hydropower province, Yunnan's electricity reform has always been at the forefront. With the continuous production of hydropower stations in Yunnan in recent years, the overall electricity supply is sufficient, which can ensure the participation of market-oriented transactions. We expect Yunnan will still maintain a high market-oriented proportion in the future. Jiangsu Province ranks second, accounting for 50%. As a major power consumption province, the transaction volume in the country is the highest, reaching 310.6 billion kilowatt-hours. In 2019, the thermal power generation in Jiangsu Province accounted for 71% of the total electricity consumption of the whole society. At present, 50% of the electricity has achieved medium- and long-term direct electricity trading. If we include the various market-oriented electricity organized by the trading center, we expect that the thermal power in Jiangsu will be basically fully market-oriented in 2019. The market-oriented proportions in other coastal provinces such as Guangdong and Zhejiang are also relatively high.
Some provinces have announced the market-oriented trading electricity scale in 2020. Among them, the transaction increase in Jiangsu, Fujian and Jiangxi provinces in 2020 only accounts for 1%, 6% and 6% of the province's total social electricity consumption. It is difficult to expand the market-oriented electricity of power through coal-fired power. We believe that thermal power generation companies similar to those in various provinces may be less affected by the expansion of future market-oriented discount scope.
At present, coal-fired power plays a dominant role in my country's power structure and is also the main force of market-oriented transactions. We assume that all the market-oriented electricity in each province comes from coal-fired power. According to the medium- and long-term direct trading electricity in each province in 2019 released by the China Electric Power Union, we can roughly calculate how much of the remaining coal-fired power in each province has not participated in marketization. The calculation method is: the market-oriented coal-fired power in each province = 1 - market-oriented trading electricity in each province/coal-fired power consumption in each province. Due to the lack of data on market-oriented monthly transactions in various provinces, and the market-oriented transactions in various provinces mainly focus on medium- and long-term transactions, we use medium- and long-term direct transaction electricity to represent market-oriented transaction volume for calculation. At the same time, due to the lack of coal-fired power generation data in each province, except for 5% of the gas and electricity generation in each province, the remaining is coal-fired power. Here we use thermal power generation to represent coal-fired power generation. At the same time, we assume that the self-use and transportation losses of coal-fired power plants are about 10%, so coal-fired power consumption = 0.9* coal-fired power generation. Then the calculation method can be changed as follows: The remaining space for marketization of coal-fired power in each province = 1 - medium- and long-term direct trading power in each province/ (the thermal power generation in each province * 0.9). Since we did not consider the monthly bidding and gas-electric parts, the actual remaining space would be smaller than the calculation results. Through Figure 3, it can be found that the marketization of coal-fired power in coastal developed provinces such as Jiangsu, Guangdong, Zhejiang, and Fujian has been relatively sufficient. More than half of the coal-fired power have participated in the annual medium- and long-term market-oriented transactions. We expect that the price and electricity prices of coal-fired power in these provinces will be less affected by marketization in the future. At present, if monthly transactions are not considered, we estimate that the national average remaining space for marketization of coal-fired power is 57%. Considering the situation of other market-oriented transactions such as monthly transactions (the total volume of various market-oriented transactions in 2019 accounted for 9 percentage points higher than the medium- and long-term transaction volume), we estimate that the remaining space for market-oriented coal-fired power should be between 40% and 50%. From an investment perspective, we can pay more attention to coal-fired power manufacturers in provinces with limited market-oriented incremental space in the future, such as Jiangsu, Guangdong, Guangxi, Zhejiang and other provinces.
At present, Jiangsu and Guangdong have announced the annual market-oriented trading prices of electricity in 2020. The discount range of the two provinces is 2-5 cents/kWh, which is 2-4 cents/kWh compared with the discount in 2019. According to the market-oriented electricity trading scale of the two provinces in 2019 and 2020, Jiangsu's market-oriented concessions will increase by 1.2 billion yuan compared with 2019, and Guangdong will increase by 3.4 billion yuan. According to the power generation of thermal power in the two provinces in 2019, the average discount on thermal power prices in 2020 is 0.3-1.1 minutes/kWh. If the concessions of thermal power can be completely compensated by the decline in coal prices, we assume that the unit coal consumption of thermal power is 300 grams/kWh, then the coal price in Jiangsu Province needs to fall by 10 yuan/ton, and the coal price in Guangdong needs to fall by 38 yuan/ton. According to the latest (2020/2/20) Qinhuangdao 5500 kcal thermal coal market price of 573.5 yuan/ton, then the coal price in Jiangsu and Guangdong needs to fall by 2% and 7% respectively. Since provinces with larger discounts mean that their electricity market-oriented reform is progressing rapidly, they tend to announce trading prices earlier. We expect that the provinces that announce trading prices will also have a discount range of 0.3-1.1 cents/kilowatt-hour in the country, and the average new discount range in the country is around 0.5 cents/kilowatt-hour.
2. There is little room for marketization of coal-fired power in coastal provinces
3. Market-oriented transaction prices are stable