CITIC Securities: Policy Tailwinds Expected for New Power Systems Development
CITIC Securities has analyzed the "15th Five-Year Plan for the Construction of a New Power System," released on August 3, 2026, by China's National Development and Reform Commission and the National Energy Administration. This top-level document, alongside related plans for renewable energy and new energy systems, prioritizes integrated development across power sources, grids, loads, and storage. The plan shifts the focus from merely increasing new energy capacity to comprehensive system-wide planning. It sets quantitative targets for power sources, grids, regulatory resources, loads, and markets, aiming to establish a new power system by early 2030. A key objective is to increase the share of non-fossil fuel power generation to 50%. CITIC Securities anticipates continued policy support for areas such as ultra-high voltage transmission, smart distribution grids, various energy storage solutions, and virtual power plants. The firm also expects accelerated implementation of electricity market reforms, including capacity compensation mechanisms and capacity markets, to further support the transition.
The "15th Five-Year Plan for the Construction of a New Power System" signals a strategic pivot towards a more integrated and flexible electricity infrastructure in China, moving beyond simple capacity expansion. The plan's emphasis on non-fossil fuel sources and advanced grid technologies like smart distribution and virtual power plants reflects a long-term vision for energy security and decarbonization. The introduction of capacity compensation and markets suggests a move towards incentivizing grid stability and reliability, crucial for managing intermittent renewable energy sources. This systemic approach, driven by policy and market mechanisms, is designed to align with global trends in energy transition and technological advancement, potentially creating new investment opportunities while addressing the complexities of modernizing a vast energy network.
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