CITIC Securities: The increase in system operating costs is only more significant in a few provinces, and overall has a small impact on the economic feasibility of energy storage.

Sina Finance reported on March 31 that CITIC Construction Investment Research Report stated that the increase in coal-fired power capacity and electricity prices since the beginning of the year, as well as the inclusion of differential settlement in the new energy mechanism, have caused a general increase in system operating costs. It has been found that by 2026, system operating costs in various provinces will increase by an average of 3 cents/kWh compared to the 25-year average, mainly due to the increase in new energy mechanism fees and coal-fired power capacity fees. Looking at it from a regional perspective, only a few provinces have seen significant increases in operating costs, with the rise in operating costs in the western region not being significant. In the future, with the continuous growth of new energy mechanism differential settlement fees, system operating costs are expected to increase moderately. Since the issuance of Document No. 114, the participation of state-owned enterprises in energy storage investment has significantly increased, with a large number of centralized procurement contracts being released. The capacity newly tendered in the first quarter of the year increased by nearly 120%. CITIC Construction Investment believes that system operating costs are not the main contradiction in current energy storage investments and have a relatively small impact.