Cathay Securities and Haitong Securities: From a global perspective on power supply and demand, coal power remains the ballast

According to the Zhitong Finance APP, Guotai Junan has released a research report stating that the fundamental reason for the frequent occurrence of global electricity shortages is the rapid growth of global electricity demand, while the structural bottlenecks on the supply side have not been effectively resolved in tandem. Due to its instability, renewable energy has failed to provide stable support for electricity demand. Therefore, it is judged that traditional energy generation, represented by coal power, will still be the ballast stone of the global electricity system in the medium to long term. From the perspective of recommending the coal industry, it continues to recommend China Shenhua (601088.SH), China Coal Energy (601898.SH), Yancoal (600188.SH), Shaanxi Coal and Chemical Industry (601225.SH), and Jinkong Coal Industry (601001.SH), which are leading in industry profitability at the bottom and also have the logic of state-owned enterprise reform.

Guotai Junan's main points are as follows:

Global electricity demand is growing rapidly, and the demand structure is changing

Looking at a 10-year dimension, the growth rate of global electricity demand has gradually increased (excluding the impact of the pandemic), with a growth rate of 4.4% in 2024, significantly faster than the global GDP growth rate of 2.9%; and structurally, developing countries maintain high growth while developed countries are regaining growth. It is particularly noteworthy that the following three deep-seated drivers are pushing global electricity consumption growth: deep electrification in the industrial sector, rapid expansion of data centers driven by artificial intelligence, and increased extreme weather impacts due to global warming. These three factors not only significantly raise the total electricity consumption but also profoundly change the structure, timing, and spatial distribution of electricity consumption, which has already had a noticeable impact on the current global electricity system.

Frequent global electricity shortages highlight bottlenecks in global electricity supply

While electricity demand is accelerating, the structural bottlenecks on the supply side have not been effectively resolved in tandem. In recent years, the global electricity system has faced dual pressures: on one hand, rapid growth on the consumption side, and on the other hand, structural mismatches on the supply side. Although significant progress has been made globally in renewable energy investment, with the installed capacity of wind and solar power continuously expanding, renewable energy has failed to provide stable support for electricity demand due to its strong intermittency, unstable output, and regional imbalances. At the same time, issues such as aging grid infrastructure, weak regional dispatch capabilities, and the absence of energy storage systems have made it difficult for the electricity system to effectively absorb and utilize newly added clean energy, resulting in a serious disconnect between "electricity growth" and "electricity availability."

Traditional energy generation represented by coal power remains the ballast stone of the global electricity system

Guotai Junan believes that in order to address the increasingly tight global electricity supply gap, it is necessary to re-examine traditional energy generation represented by coal power. The United States' announcement to restart coal power in 2025 may become an important sign of the adjustment of energy development thinking in developed countries. In the first half of 2025, U.S. coal-fired power generation is expected to see its first year-on-year growth (15%) in the past decade (excluding the pandemic year of 2021), and the EIA predicts a 6% year-on-year increase in U.S. coal consumption in 2025.

Developed countries increasingly need coal power to play its advantages as a ballast stone in the electricity system to ensure a stable power supply required by the rapid development of AI and to cope with load shocks caused by extreme weather. From a global perspective on the demand for coal resources, developing countries continue to maintain high growth, while developed countries have also adjusted their energy development thinking to some extent, and the peak pressure for coal clearance may have already passed Risk Warning

Global electricity consumption growth is lower than expected, and energy storage technology is developing beyond expectations