under the pressure of carbon emission reduction, cement enterprises once again make efforts to cross-border new energy
On March 9, Anhui Conch Cement Company Limited(600585) announced that in 2022, the company will invest 5 billion yuan to develop new energy businesses such as photovoltaic power plants and energy storage projects, so as to realize the full coverage of photovoltaic power generation in subordinate factories.
The company said that it is expected that by the end of 2022, the installed capacity of photovoltaic power generation will reach 1GW and the annual power generation capacity will be 1 billion kwh. As of the closing on March 9, Anhui Conch Cement Company Limited(600585) reported 38.19 yuan / share, down 2.08%, with a total market value of 202.4 billion yuan.
previous actions
Anhui Conch Cement Company Limited(600585) said that the above investment plan aims to accelerate the development of the company’s new energy industry, create a new industrial growth pole, practice the green development strategy, implement the relevant policy requirements of national carbon peak and carbon neutralization, and promote the company to accelerate industrial transformation and upgrading.
At the same time, Anhui Conch Cement Company Limited(600585) reminds that the investment plan is based on the objectives set by the company’s “14th five year plan” business development strategy and does not constitute a substantive commitment to investors. In the actual implementation process, it may be affected by many factors such as macro-economy, industry cycle and operation management, and the specific implementation progress is uncertain.
Anhui Conch Cement Company Limited(600585) board secretary office said in an interview with the reporter of the international finance news, “The company has two main original intentions for the layout of photovoltaic. One is to use the free space of the cement plant to build distributed photovoltaic power stations, so as to meet part of the power demand and reduce the power cost. After being put into operation, it may save hundreds of millions of power costs next year; the other is to practice social responsibility and promote the realization of the goal of ‘double carbon’.”
Anhui Conch Cement Company Limited(600585) landed on the Hong Kong Stock Exchange in October 1997, creating a precedent for the overseas listing of China’s cement industry. It was listed on the Shanghai Stock Exchange in February 2002. The company is located in Wuhu, Anhui Province, and is mainly engaged in the production and sales of cement and commodity clinker. As one of the largest suppliers of cement and clinker in Asia, Anhui Conch Cement Company Limited(600585) has more than 140 subsidiaries, which are distributed in bases and 14 regions in the province, spanning 18 provinces, cities and autonomous regions, Indonesia, Myanmar, Laos, Cambodia and other countries. It has achieved the reputation of “China for world cement and conch for Chinese cement”.
In fact, as early as the end of August 2021, Anhui Conch Cement Company Limited(600585) has made some moves in the field of new energy. At that time, the company announced that it planned to acquire 100% equity of conch new energy held by related party conch investment at a price of 443 million yuan. Conch new energy mainly involves businesses related to photovoltaic, wind power and energy storage systems. In January this year, industrial and commercial changes occurred in conch new energy, and the registered capital increased from 500 million yuan to 5 billion yuan.
The above-mentioned person from the board secretary office told the reporter of the international finance news, “The company has formulated environmental protection plans in three aspects. In terms of carbonate decomposition, we are studying new materials such as low-carbon cement. In terms of direct use of fuels, first, we use more biomass fuels such as straw; second, the calorific value generated by domestic waste can also be used as an energy substitute; third, we use natural gas to replace coal. In addition, there are relevant environmental protection technological improvements, such as waste heat power generation In terms of power, it is photovoltaic power generation and the construction of intelligent chemical plants. ” However, the challenges remain. The first is the high cost investment. “On our scale, the investment in energy-saving technological transformation is about 2 billion a year”. On the other hand, it is the imperfection of technology.
cement industry has great pressure on emission reduction
As a major carbon emitter, the cement industry faces great pressure on emission reduction According to the data of China State Construction Engineering Corporation Limited(601668) Materials Federation, in 2020, the carbon dioxide emission of cement industry was 1.23 billion tons, with a year-on-year increase of 1.8%. The carbon emission of cement industry accounted for 86.1% of all building materials industries, and the carbon dioxide equivalent indirectly converted by power consumption was 89.55 million tons, far exceeding other building materials industries. It is the sub industry of building materials with the largest carbon emission. In addition, according to the carbon emission ranking list of Chinese listed companies (2021) jointly released by Caijing magazine and Zhongchuang carbon investment, among the top 20 enterprises with total carbon emission in 2020, 6 are subordinate to the cement industry, and 8 cement enterprises appear in the top 20 enterprises with carbon emission intensity.
The aforementioned Anhui Conch Cement Company Limited(600585) Board Secretary Office pointed out to the reporter of the international finance that the carbon emission of the cement industry mainly comes from two aspects: one is the decomposition of carbonate in the production process, and the other is the need for coal when calcining limestone. These two items together account for about 98% of the total carbon emission, and the remaining 2-5% is electricity. Under the pressure of emission reduction, cement enterprises have turned their attention to new energy.
On the evening of February 17, Gansu Shangfeng Cement Co.Ltd(000672) announced that it plans to use its own funds of no more than 500 million yuan for equity investment in new economy industries, mainly for high-quality growth projects driven by new energy and scientific and technological innovation and led by green and high-quality development, including but not limited to new energy storage, chip semiconductor, new materials, environmental protection and other industries.
Previously, Gansu Shangfeng Cement Co.Ltd(000672) also signed strategic framework agreements with the leading photovoltaic inverter Sungrow Power Supply Co.Ltd(300274) sunshine new energy and Hefei Yixin to jointly layout green energy industries such as photovoltaic power generation and energy storage. On the basis of meeting the green power demand of “zero power purchase” in all bases of the company, Gansu Shangfeng Cement Co.Ltd(000672) also cooperated in the development of photovoltaic and energy storage projects in the form of industrial investment. The three parties will set up a joint venture in Ningbo, Zhejiang Province as the main body of the follow-up development of photovoltaic business, Gansu Shangfeng Cement Co.Ltd(000672) invested 30 million yuan, with a shareholding ratio of 60%.
Guangdong Tapai Group Co.Ltd(002233) once said in June 2021 that it would invest 1.339 billion yuan to build an integrated distributed photovoltaic power generation and energy storage project. The company said that this investment is in line with the national development goal of “carbon peaking and carbon neutralization”, in line with the relevant national industrial policies to promote the healthy development of photovoltaic industry, and is also one of the effective measures for the company to actively deploy carbon emission reduction of cement enterprises. After the project is completed and put into operation, it will greatly reduce the cost of purchased electricity, promote cleaner production and low-carbon production, reduce energy consumption and carbon emission, and further enhance the core competitiveness of the company’s main cement industry.
“double carbon” is flourishing
In 2022, “double carbon” was written into the government work report again. The government work report pointed out that we should promote carbon peak and carbon neutralization in an orderly manner. Implement the carbon peak action plan. Promote the energy revolution, ensure energy supply, based on resource endowments, adhere to the first establishment and then destruction, and make overall plans to promote the low-carbon transformation of energy. Strengthen the clean and efficient utilization of coal, orderly reduction and substitution, and promote the transformation of energy conservation and carbon reduction, flexibility and heating of coal and electricity. Promote the planning and construction of large-scale wind and solar power bases and their supporting regulatory power sources, and improve the consumption capacity of the power grid for renewable energy power generation. Promote the R & D, promotion and application of green and low-carbon technologies, build a green manufacturing and service system, and promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical, building materials and other industries.
We will resolutely curb the blind development of projects with high energy consumption, high emissions and low levels. Promote the transformation from “dual control” of energy consumption to “dual control” of total carbon emission and intensity, improve the incentive and restraint policies for pollution and carbon reduction, and accelerate the formation of a green production and lifestyle.
In addition, according to the data of the national energy administration, in 2021, the installed capacity of renewable energy power generation in China historically exceeded 1 billion kw, the installed capacity of wind power and photovoltaic power generation both exceeded 300 million KW, the installed capacity of offshore wind power jumped to the first in the world, and the annual power generation of new energy exceeded 1 trillion kwh for the first time.
As early as may last year, seven departments including the Ministry of industry and information technology issued the opinions on improving the quality of cement products and standardizing the order of cement market, which proposed to continuously promote the green development of cement industry. Encourage enterprises to implement innovative development, actively adopt advanced energy conservation, emission reduction and comprehensive utilization technologies, and improve the utilization efficiency of energy resources in the cement industry; Continue to promote the emission reduction of pollutants, realize the coordinated control of carbon emissions and pollutants, ensure that the carbon emissions of the cement industry reach the peak by 2030, and lay the foundation for carbon neutralization.
The Pacific Securities Co.Ltd(601099) securities once pointed out that under the guidance of the goal of “carbon peaking in 2030 and carbon neutralization in 2060”, the cement industry may usher in a new round of technological change to reduce carbon dioxide emissions through measures such as fuel substitution, carbon capture and carbon storage. On the other hand, it can reduce industrial energy and reduce carbon emissions. At present, reducing production capacity may be the most effective emission reduction measure. At the same time, The cement industry with a good carbon emission data base will be preferentially included in the national carbon trading market to achieve the purpose of energy conservation and emission reduction by controlling the total amount and trading carbon emission rights. The leading enterprises have obvious technical advantages or further seize the market share. In the future, the industry may usher in a new round of supply side reform, and the concentration is expected to accelerate.
