Matters:
1. The results of the candidates for EPC general contracting of the Three Gorges Yangjiang Qingzhou five (1GW) project are publicized. The first candidate for the bid is China Energy Construction Group Guangdong Electric Power Design and Research Institute Co., Ltd., with a bid price of 10.89 billion yuan; The results of the successful candidates for EPC of the Three Gorges Yangjiang Qingzhou 6 (1GW) project are publicized. The first successful candidate is Shanghai survey, design and Research Institute Co., Ltd., with a bid price of 12.04 billion yuan; The results of the successful candidates for EPC of the Three Gorges Yangjiang Qingzhou 7 (1GW) project are publicized. The first successful candidate is China Energy Construction Group Guangdong Electric Power Design and Research Institute Co., Ltd., with a bid price of 10.88 billion yuan.
2. The bid winning results of Shandong energy group’s 500MW offshore wind power EPC project in Dongying sea area were announced, and Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Zhongnan survey, design and Research Institute Co., Ltd. won the bid, with a bid price of 5.63 billion yuan. 3. The EPC General Contracting (excluding the procurement of wind turbine and tower) of zheneng Taizhou No.1 300MW offshore wind power project was opened. The quotation range of the bidding enterprise was 2.442-2.549 billion yuan. Combined with the winning of the bidding for the procurement of wind turbine and tower of the project in the early stage, the total EPC cost of the project was 3.506-3.613 billion yuan.
Ping An View:
The recent EPC bidding results of several projects show that the investment cost of offshore wind power has been reduced to 12 yuan / W or even lower. According to the above EPC bidding results, the EPC cost of Shandong energy group’s 500MW offshore wind power project in Dongying sea area is 11.3 yuan / W. considering the preliminary costs of construction management, land and sea use, it is estimated that the total investment can be controlled at about 12 yuan / W; The scale of zheneng Taizhou No.1 project is relatively small, and the total investment cost is estimated to be less than 12.5 yuan / W according to the EPC bidding situation. The Three Gorges Yangjiang Qingzhou 5 / 7 adopts the flexible DC transmission scheme. Referring to the quotation of the first bid winning candidate, the EPC cost is about 10.9 yuan / W, and the total investment cost is estimated to be within 12 yuan / W. The Three Gorges Yangjiang Qingzhou 6 plans to adopt the 330 kV AC transmission scheme, the EPC cost is 12 yuan / W, and the total investment cost is estimated to be within 13 yuan / W. Taking Shandong as an example, the EPC price of the Three Gorges new energy Shandong Mouping bdb6 phase I (300MW) offshore wind power project bidding in 2020 reached 18.4 yuan / W. the investment cost intensity of the current offshore wind power project is estimated to be more than 30% lower than that in the rush installation period. The decrease of investment cost is mainly due to technological progress, including the large-scale fan and the optimization of delivery scheme. Due to the large-scale fan and intensified competition, the price of offshore fan has decreased from 6 Jiangnan Mould & Plastic Technology Co.Ltd(000700) 0 yuan / kW in the rush installation period to 3 Xj Electric Co.Ltd(000400) 0 yuan / kW at present.
The progress of fan technology promotes the utilization of new projects. We believe that when the market pays attention to whether offshore wind power can achieve parity, it needs to pay attention not only to the decline of investment cost per kilowatt, but also to the available hours. In fact, while the single unit capacity of the fan is large, it is also accompanied by the increase of the swept area per kilowatt and the increase of the available hours under the same wind conditions. Taking Guangdong as an example, the unit myse5 is widely used in rush loading period The unit kilowatt sweeping area of 5-155 is 3.43 square meters, while the unit kilowatt sweeping area of myse11-230 model proposed for Yuedian Qingzhou project is 3.78 square meters; According to the data disclosed by China Three Gorges Renewables (Group) Co.Ltd(600905) disclosure, the utilization hours of five, six and seven in Qingzhou, Yangjiang, Three Gorges can reach 3 Minmetals Capital Company Limited(600390) 0. We estimate that the utilization hours of new units (the sweeping area per kilowatt reaches about 4.5 square meters) used in Shandong project can reach 3300 and above. The increase of utilization hours will have an obvious dilution effect on the cost of kwh.
At present, the newly-built offshore wind power projects have good economy, and the comprehensive parity of offshore wind power may be coming. Referring to Shandong energy group’s 500MW offshore wind power project located in Dongying sea area, the total investment cost of the project is about 12 yuan / W, and the utilization hour is estimated at 3350. The benchmark coal price in Shandong Province is 0.3949 yuan / kWh, the self owned capital accounts for 20%, and the IRR of the self owned capital of the project is expected to reach about 10%, which has a good return on investment. We estimate that the rate of return of Zhejiang project is equivalent to that of Shandong. The rate of return on investment of Guangdong project is higher than that of Shandong due to the higher level of available hours and electricity price. On the whole, driven by the rapid decline of investment costs and the increase of utilization hours, China’s offshore wind power has been fully affordable.
Investment advice. At the current time point, the overall parity of offshore wind power has come, and the parity process of China’s offshore wind power has exceeded market expectations; Looking forward to the future, the core driving factor of technological progress will continue to play the effect of cost reduction, there is still a large space for the large-scale wind turbine, and the economy of offshore wind power will continue to improve. Under the condition that the economic problems can be solved, combined with the demands of energy transformation in coastal provinces and the huge exploitable space of offshore wind power, the accelerated development and large-scale development of offshore wind power in China can be expected. It is suggested to focus on the core manufacturing links of offshore wind power, especially the submarine cables and pipe piles / towers whose unit value is expected to remain stable or even increase. It is recommended to focus on Dajin Heavy Industry Co.Ltd(002487) , Ningbo Orient Wires & Cables Co.Ltd(603606) and Ming Yang Smart Energy Group Limited(601615) , Jiangsu Zhongtian Technology Co.Ltd(600522) , Titan Wind Energy (Suzhou) Co.Ltd(002531) , Qingdao Tianneng Heavy Industries Co.Ltd(300569) , etc.
Risk warning. 1. The technological progress and cost reduction rate of offshore wind power are lower than expected. 2. In 2022, the new installed capacity of offshore wind power in China is likely to decline, and the performance of some enterprises may be under pressure. 3. Some manufacturing links may intensify competition and lead to lower than expected profitability.
