Policy favorable factors combined with strengthened energy substitution demand cause the Hong Kong green energy sector to rally in the short term.

Ask AI · How will AI development catalyze new growth points in green electricity demand?

Financial Associated Press March 24 (Editor: Feng Yi) Due to favorable policies and the strengthening of energy substitution logic from geopolitical risks, the green electricity sector in Hong Kong stocks saw a strong performance today, with sub-sectors like photovoltaics and lithium batteries also showing active performance.

As of the time of writing, Shan Gao New Energy (01250.HK) and Ganfeng Lithium (01772.HK) both rose over 5%, and several other stocks, including Xiexin New Energy (00451.HK), also increased by more than 2%.

In terms of news, on March 23, the National Bureau of Statistics stated that it will work with relevant departments to vigorously promote the computing power and electricity coordination project, ensuring that the application of green electricity in newly constructed computing power facilities at hub nodes reaches over 80%, maximizing the supporting role of green electricity.

Everbright Securities Research Institute pointed out that under the dual control of energy consumption and carbon emissions, the “14th Five-Year Plan” has set clear carbon reduction targets, with a clear trend of increasing green electricity consumption during this period. Additionally, the trend of AI development is stimulating green electricity demand.

It is worth mentioning that since the beginning of the year, the green electricity industry has received considerable policy attention.

Previously, the National Bureau of Statistics, in conjunction with the National Development and Reform Commission, the National Energy Administration, and other departments, successively issued several policy documents, including “Implementation Opinions on Deepening the ‘East Data West Computing’ Project to Accelerate the Construction of a National Integrated Computing Power Network,” “Special Action Plan for Green and Low-Carbon Development of Data Centers,” “Action Plan for Accelerating the Construction of a New Power System (2024-2027),” and “Guiding Opinions on Vigorously Implementing Renewable Energy Substitution Actions,” proposing innovative mechanisms for coordinating computing power and electricity, raising the proportion of renewable energy in data centers, and other policy measures to catalyze green electricity demand.

On the other hand, the ongoing conflict in the Middle East and high oil prices have also reinforced the energy substitution logic of the new energy industry.

China Merchants Securities analysis pointed out that since mid-March, Brent crude oil prices have continued to fluctuate above $100, and given the high uncertainty surrounding the situation in the U.S.-Israel-Iran conflict, the importance of energy structure transformation has become more pronounced.

Specifically, the generation disruptions in photovoltaics and wind power are less affected by geopolitical conflicts and fossil fuel prices, while the increasing penetration rate of new energy vehicles can help reduce reliance on oil. Energy storage systems can smooth out the volatility of new energy and enhance consumption capacity.

Dongwu Securities also stated that this geopolitical event will strengthen the narrative and public consensus surrounding energy security and energy independence policies, while the new energy sector presents characteristics of “weak endowment, strong capital” dependency, and its resource endowment requirements differ from traditional oil and gas resources, thus directly benefiting wind, solar, storage, and nuclear-related themes.

Looking ahead, China Merchants Securities believes that by 2026, all links in the new energy sector, including photovoltaics, wind power, batteries, and energy storage, will perform well, and the current industry still offers high cost-effectiveness for allocation, making investment opportunities worth paying attention to.

(Financial Associated Press, Feng Yi)