A research report from China Galaxy Securities indicates that recent spot electricity prices in certain provinces, notably Guangdong, have surged significantly. This is attributed to factors such as rising primary energy prices, the early arrival of high temperatures, and supply-demand mismatches caused by generator maintenance. This development has partially reversed the previously pessimistic market expectations for electricity prices. The National Climate Center forecasts that El Niño conditions will emerge in May and develop into a moderate or stronger El Niño event during the summer and autumn. This outlook draws attention to the potential for electricity consumption growth against a low base from the previous year. The implementation of mechanism-based electricity pricing in Liaoning and Guangxi has helped stabilize pricing expectations. Market observers are watching for similar follow-up actions in other provinces. Coupled with the intensive commissioning phase of new generating units, these factors could lead to a simultaneous improvement in both the performance and valuation of the nuclear power sector. In the short term, the fundamentals for new energy remain relatively weak. Attention is focused on emerging industry trends, such as the integration of computing and power, which may act as catalysts for the sector.
Key viewpoints from China Galaxy Securities are as follows:
The growth rate of total electricity consumption in society showed a slowdown in March. However, electricity usage in the battery charging and swapping services sector and the internet data services sector maintained a high growth rate. In March 2026, total electricity consumption reached 859.5 billion kilowatt-hours, a year-on-year increase of 3.5%. By sector, electricity consumption for the primary, secondary, and tertiary industries, along with residential use, was 11.3, 570.8, 160.1, and 117.2 billion kWh, respectively. This represents year-on-year growth of 6.7%, 2.0%, 7.7%, and 5.2%. For the cumulative period of January to March 2026, total electricity consumption amounted to 2,514.1 billion kWh, up 5.2% year-on-year. This growth rate is 0.9 percentage points slower than the rate recorded for January-February 2026. The cumulative electricity consumption for the primary, secondary, and tertiary industries, and residential use was 33.6, 1,598.7, 483.3, and 398.5 billion kWh, respectively, with year-on-year growth rates of 7.1%, 4.7%, 8.1%, and 3.4%. Compared to the January-February period, these growth rates changed by -0.3, -1.6, -0.2, and +0.7 percentage points, respectively. Within the tertiary industry for January-March, electricity consumption for battery charging and swapping services and internet data services reached 37.6 and 22.9 billion kWh, surging by 53.8% and 44.0% year-on-year, respectively. These sectors continue to exhibit high growth momentum, following increases of 55.1% and 46.2% in January-February.
The growth rate of electricity generation from nuclear and wind power slowed significantly in the first quarter. In March 2026, electricity generation from large-scale industrial enterprises reached 802.5 billion kWh, increasing by 1.4% year-on-year. By source, thermal, hydro, nuclear, wind, and solar power generation from these enterprises changed by +4.2%, +10.8%, -11.8%, -17.3%, and +10.0% year-on-year, respectively. The decline in nuclear power is primarily attributed to scheduled major maintenance, while the drop in wind power is linked to resource conditions. For the cumulative January-March period, generation from large-scale industrial enterprises totaled 2,378.2 billion kWh, up 3.4% year-on-year, though the growth rate decelerated by 0.7 percentage points compared to January-February. Thermal, hydro, nuclear, wind, and solar power generation changed by +3.7%, +8.9%, -3.8%, -2.9%, and +11.2% year-on-year, respectively. Compared to the January-February period, the growth rates for these sources changed by +0.4, +2.1, -4.6, -8.2, and +1.3 percentage points.
In March, newly installed power generation capacity declined year-on-year for all types except nuclear power, with solar power experiencing a sharp drop of 56%. From January to March 2026, the nation added 83.82 gigawatts of new power generation capacity, a decrease of 5.78 GW or 6% year-on-year. The new capacity additions for hydro, thermal, nuclear, wind, and solar power were 1.42 GW, 24.03 GW, 1.21 GW, 15.77 GW, and 41.39 GW, respectively. This represents year-on-year changes of -0.71 GW, +11.37 GW, +0.12 GW, -0.83 GW, and -18.47 GW, or percentage changes of -33%, +90%, (no change), +6%, and -31%. Specifically in March 2026, newly installed capacity was 17.91 GW, down 13.99 GW or 44% year-on-year. Additions for hydro, thermal, nuclear, wind, and solar were 0.20 GW, 4.07 GW, 0 GW, 4.73 GW, and 8.91 GW, respectively. These figures correspond to year-on-year changes of -0.02 GW, -2.00 GW, 0 GW, -0.61 GW, and -11.35 GW, or percentage changes of -9%, -33%, (no change), -11%, and -56%.
The report highlights risks including the potential for natural resource conditions to fall short of expectations and the risk of a sharp increase in raw material prices.
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