Event:
Recently, the report on the implementation of the central and local budgets in 2021 and the draft central and local budgets in 2022 was released, which proposed to “promote the solution of the subsidy fund gap for renewable energy power generation”.
Comments:
The policy pays attention to the subsidy gap, and the issuance of stock subsidies is expected to speed up
Since 2020, the pace of policies related to the subsidy gap of renewable energy has been stepped up. Various measures have been taken successively to limit the expansion of the subsidy gap, such as ensuring that new projects are not in arrears, announcing the reasonable utilization hours of the whole life cycle of various projects, and clarifying the amount of project subsidies, which has laid a good foundation for solving the problem of subsidy arrears. In February 2021, five national ministries and commissions jointly issued the notice on guiding and increasing financial support to promote the healthy and orderly development of wind power, photovoltaic power generation and other industries, and put forward policies and measures such as subsidized right confirmation loans and full collection of renewable energy price surcharges, so as to jointly solve the problem of subsidy arrears. The report clearly proposes to “promote the solution of the funding gap of renewable energy power generation subsidies”, and the issuance of stock subsidies is expected to accelerate.
It is estimated that the subsidy gap of renewable energy is expected to exceed 400 billion yuan by the end of 2021
In order to meet the rapidly increasing demand for renewable energy electricity price subsidies, the standard of additional collection of electricity price has been raised for many times. However, with the rapid growth of China’s installed capacity of renewable energy, it is still difficult for the additional income of electricity price to cover the rolling renewable energy subsidies. We estimate that the additional income of electricity price of renewable energy fund in 2021 is only about 95 billion yuan, while the demand for renewable energy subsidies of high electricity price scenery projects is as high as about 200 billion yuan / year. We expect the cumulative subsidy gap of renewable energy to exceed 400 billion yuan by the end of 2021.
The budget expenditure of central government funds in 22 years increased by 401.1 billion compared with that in 21 years
This report discloses the revenue forecast and expenditure arrangement of the general public budget. Specifically, the budget expenditure of central government funds in 2022 was 807134 billion yuan, an increase of 401137 billion yuan or 98.8% over the budget value in 2021. Among them, the expenditure at this level was 718343 billion yuan, an increase of 385757 billion yuan over the budget value in 2021; Transfer payments to local governments amounted to 88.791 billion yuan, an increase of 15.38 billion yuan over the budgeted value in 2021. The additional expenditure on renewable energy is an important part of the expenditure of the central government fund. The budget of this expenditure in 2021 is 89.067 billion yuan, accounting for 21.94% of the budget expenditure of the central government fund. From the budget data of 20172021, more than 85% of the additional expenditure on renewable energy is at the central level, and the proportion continues to increase, about 94% in 21 years.
Investment advice
The policy focuses on the subsidy gap. We believe that the problem of renewable energy gap is expected to be solved quickly. After the new energy subsidy and roe are gradually improved, the profitability of the project is expected to be significantly improved. In terms of specific targets, the proposal of thermal power transformation into new energy targets focuses on [ Huaneng Power International Inc(600011) (a + H)] [China Resources Power] [ Huadian Power International Corporation Limited(600027) (a + H)]. New energy operators are suggested to pay attention to [Longyuan Power (a + H)] [ Nyocor Co.Ltd(600821) ] [ Jilin Electric Power Co.Ltd(000875) ] [ China Three Gorges Renewables (Group) Co.Ltd(600905) ] [ Fujian Funeng Co.Ltd(600483) ].
Risk tips: policy promotion is less than expected, macroeconomic changes, power demand is less than expected, industrial technological progress slows down, industrial competition intensifies, and the calculation is subjective
