CITIC Securities: Policies are likely to continue benefiting UHV, smart distribution networks, various energy storage/virtual power plants and other flexible adjustment resources, the development of clean energy sources, and the field of power digitalization.

CITIC Securities research report points out that on August 3, 2026, the National Development and Reform Commission and the National Energy Administration will release the "14th Five-Year Plan for Building a New Power System." As a top-level document in the electric power sector, the "Plan" is complemented by the "14th Five-Year Plan for Renewable Energy" and the "14th Five-Year Plan for the Construction of a New Energy System," focusing on integrated coordination of "source, grid, load, and storage" to promote the power industrys transition from merely adding new energy installations to a holistic approach. The "Plan" sets quantitative targets around power sources, grids, adjustment resources, loads, and markets, aiming to initially establish a new power system by 2030, with non-fossil energy accounting for 50% of total power generation. We believe that policies will continue to favor UHV, intelligent distribution networks, various forms of energy storage/virtual power plants, flexible adjustment resources, clean power development, and the digitization of electricity, while also accelerating the implementation of capacity compensation mechanisms and capacity market reforms. 1) Construction of grid infrastructure. Guided by the "Plan," we expect sustained boosts in the construction of UHV AC and DC transmission channels, upgrades to regional backbone networks, intelligent distribution network renovations, and the development of microgrid systems. We suggest paying attention to transmission equipment, distribution automation, and digital and intelligent grid equipment; at the same time, enhancing the capacity of distribution networks will fully release the development space for distributed photovoltaics, benefiting the entities involved in distributed development and operation. 2) Various types of flexible adjustment resources. First, in the energy storage sector, pumped storage projects are accelerating construction, and demand for independent storage and new user-side energy storage continues to be released. Second, in flexible power sources, the transformation of existing coal power plants for flexibility and orderly advancement of gas peaking units are in progress. Third, in load-side adjustment resources, virtual power plant platforms, load aggregation service providers, vehicle-grid interaction, and intelligent charging and discharging equipment present long-term growth opportunities. 3) Collaborative development of clean power. Based on the planning of interprovincial and inter-regional transmission channels, the pace of development for large wind and solar bases in the "Three Norths" and offshore wind power construction is expected to accelerate; at the same time, nuclear power will be expanded in an orderly manner, while solar thermal, biomass, and other renewable energy sources with adjustable attributes may receive more policy support. 4) Power market and digitization. We anticipate that under clarified policies regarding credible output and peak supply capacity assessment requirements, the construction of the electricity capacity market may become the focus of the next phase of electricity market reform. Meanwhile, we recommend paying attention to the demand for electricity trading platforms, load management systems, power simulation dispatch systems, and energy digitization platforms.