The Zhitong Finance App learned that CITIC Securities released a research report saying that the electricity consumption growth rate of the entire society fell back to 1.7% in July, and the slowdown in the growth rate of secondary production combined with the 5.1% year-on-year decline in residents' electricity consumption under the high base in the same period last year is the core reason for dragging down overall electricity consumption growth. The year-on-year decline in investment on the power supply side continued to expand, but thermal power in segmented power supplies maintained an intensive pace of commissioning, adding 11.94 million kilowatts of installed capacity in a single month; the growth rate of grid-side investment slowed to 0.7%. Weak overall electricity demand combined with improvements in clean energy output led to an 8.5% year-on-year decline in the number of hours used for thermal power in July, the biggest drop in a single month during the year. The monthly electricity price in Jiangsu in September fell back to near the annual Changxie electricity price after rising for 6 consecutive months. We recommend leading hydropower, nuclear power, and coal-power integrated enterprises with high underlying assets; H-share thermal power and H-share green power with safe valuations and attractive dividends; new scenarios and models that benefit from digitalization and the increasing integration of new power systems, such as virtual power plants and microgrids.
CITIC Securities's main views are as follows:
Demand: The growth rate of secondary production slowed and residents' electricity consumption grew negatively under a high base. The electricity consumption growth rate of the whole society continued to fall back to 1.7% in July.
According to data from the China Telecommunication Union (same below), in July 2026, the entire society used 1,040 billion kWh of electricity, up 1.7% year on year, and the growth rate decreased by 2.0 ppts from June. The electricity consumption growth rate of all industrial sectors declined month-on-month. Among them, the growth rate of electricity consumption in secondary production fell by 1.7 ppts to 3.0% month-on-month; under the high electricity consumption base brought about by high temperatures in the same period last year, residents' electricity consumption fell 5.1% year on year, dragging down overall electricity consumption growth; judging from the contribution ratio of electricity consumption in a single month, the contribution ratio of electricity consumption in the second production/third production/residential electricity consumption to the overall electricity consumption growth rate in July was 103.1%/57.6%/-59.2%, respectively.
Among the secondary industry segments, electricity consumption in the manufacturing industry increased 4.9% year on year in July. Among them, electricity consumption in the high-tech and equipment manufacturing industry increased 8.9% year on year, maintaining a strong growth rate; the total electricity consumption rate of the four major energy consumption industries was 1.7%, and overall demand was steady. Looking at the subregions, the year-on-year growth rate of electricity consumption in high-energy regions/coastal areas fell back to 2.0%/1.8% in July, respectively, and the trend of electricity consumption differentiation among different regions has subsided.
Supply: The growth rate of investment on the source network side continued to decline month-on-month, and thermal power added 11.94 million kilowatts of installed capacity in a single month.
From January to July, the country added 193.97 million kilowatts of installed capacity, a year-on-year decrease of 40%. In July, thermal power started production of 11.94 million kilowatts, driving the new installed capacity from January to July to 50.3 million kilowatts, and thermal power plants maintained an intensive pace of commissioning. In terms of industry investment, power investment from January to July fell 4.7% year on year to 423.7 billion yuan, and the year-on-year decline continued to expand from January to June; power grid investment was 334 billion yuan, up 0.7% year on year, and the growth rate continued to slow, down 3.3 percentage points from January to June.
Consumption: Weak demand & clean energy improve squeezed thermal power output.
In July, the average utilization time of power generation equipment across the country was 279 hours, a year-on-year decrease of 7.3%. In terms of power sources, the number of hours used in a single month of hydropower increased 7.1% year on year to 422 hours, returning to the growth range; the number of hours used by wind power fell 6.3% year on year, up 8.5 ppts from the growth rate in June, or mainly benefited from improved wind resources; under the squeeze of weak overall demand and improved clean energy output, the number of hours used by thermal power fell 8.5% year on year in July, the biggest year-on-year decline in a single month since 2026.
In terms of electricity prices, electricity prices in Guangdong Province continued to fall to 0.403 yuan/kWh in September, at a discount of 50 yuan/megawatt-hour from the benchmark electricity price; electricity prices in Jiangsu Province fell to 0.345 yuan/kWh month-on-month in September. After six months of continuous electricity price increases, they fell back to close to the annual Changxie electricity price level.
Risk factors:
Demand for electricity falls short of expectations; electricity prices in market transactions have dropped sharply; fuel costs have risen sharply; landscape costs have risen; the risk of consumption of new energy sources has increased; incoming water has fallen short of expectations, etc.