**Market Review** During the week of August 11-15, the Shanghai Composite Index rose 1.70%, while the ChiNext Index gained 8.58%. The carbon neutrality sector increased 3.15%, environmental protection sector rose 1.79%, utilities sector declined 0.55%, and the coal sector fell 0.69%.

**Weekly Focus** As the impact of public health events gradually fades, the market originally expected US LNG capacity to be rapidly released. However, the reality has been repeated delays in project commissioning schedules. Using Venture Global's Calcasieu Pass LNG project as a case study, there are three main reasons for the continued delays in US LNG capacity rollouts:

①Force majeure factors that Venture Global has repeatedly emphasized when addressing contract disputes with some long-term customers, including two hurricanes and public health event impacts, as well as technical issues with the power island waste heat boilers.

②Calcasieu Pass is a greenfield project that adopted an innovative mid-scale modular design and construction approach, leading to extended project commissioning periods.

③The Calcasieu Pass project was commissioned during the peak of international natural gas prices following the Russia-Ukraine conflict. The company's trial production output was not subject to long-term contract obligations, with such contracts only taking effect after the company formally declared commercial operations to downstream customers.

**Industry News** The 29th issue of China's Electricity Coal Procurement Price Index (CECI) weekly report for 2025 shows that due to high temperatures, increased coal consumption at power plants, rainfall in major production areas, and declining inventories, electricity coal supply and demand remain tight with spot prices accelerating upward, and short-term upward momentum continues. Although supply is expected to recover, market sentiment and structural contradictions will continue to support coal prices. Power companies are advised to optimize procurement and inventory strategies to ensure power supply security.

In the first half of 2025, State Power Investment Corporation (SPIC) achieved a year-on-year reduction of over 1.2 cents per kWh in electricity generation costs through its "One Cent" quality improvement and efficiency enhancement initiative, with significant cost reductions in renewable energy and coal-fired power. The initiative focused on resource optimization, industrial quality enhancement, marketing, and investment control, establishing a full lifecycle cost control system to support annual operational targets.

The Guangxi Power Trading Center released the 3.0 settlement rules for non-spot market environments, clarifying settlement rules for medium and long-term contracts and deviation electricity. For renewable energy positive deviation electricity, the benchmark price takes the lower of coal-fired minimum fuel cost price and market average price. Error electricity is generally calculated based on monthly profit and loss unit prices, with user-side adjustments only for electricity volume and market profit/loss portions without adjusting green certificate settlements. Error electricity retrospective periods generally do not exceed 12 months to ensure trading fairness and stability.

**Investment Recommendations** **Thermal Power Sector**: We recommend focusing on thermal power companies with generation assets primarily located in regions with tight power supply-demand balance and favorable competitive landscape on the generation side, such as Wanneng Power and Huadian Power International.

**Hydropower**: We recommend attention to leading hydropower operator Yangtze Power.

**Renewable Energy Generation**: We recommend focusing on renewable energy leader China Longyuan Power Group (H).

**Nuclear Power**: We recommend attention to nuclear power leader China National Nuclear Power amid increasing marketization of electricity prices.

**Risk Warnings** **Power Sector**: New installed capacity below expectations; low downstream demand prosperity and reduced electricity demand leading to utilization hours below expectations; slower-than-expected power market liberalization progress; sustained high coal prices affecting thermal power profitability; subsidy reductions affecting renewable energy generator profitability.

**Environmental Protection Sector**: Environmental governance policy releases below expectations.