Event: according to the China reform daily, the national development and Reform Commission, the national energy administration and the Ministry of Finance recently issued the notice on self inspection of subsidies for renewable energy power generation.
Start enterprise self inspection to find out the bottom line of subsidies for renewable energy power generation. According to this notice, the purpose of this document is to improve and strengthen the use and management of renewable energy power generation subsidy funds and find out the base number of renewable energy power generation subsidies. This time is mainly carried out through the self inspection of power grid enterprises and power generation enterprises, focusing on the six aspects of project compliance, scale, electricity quantity, electricity price, subsidy funds and environmental protection (only biomass power generation). Power grid and power generation enterprises need to complete self inspection and rectify problems in time before April 15. With the self inspection carried out in succession, the default base of China’s renewable energy subsidies is expected to be clearer and provide reliable data for the follow-up subsidy problems of the industry.
In 2022, the budget of the central government fund will increase significantly, or provide preparation for the settlement of the subsidy problem of new energy power generation. From the perspective of 2022 budget planning, the budget expenditure of central government funds in 2022 is 807134 billion yuan, compared with 408771 billion yuan and 400331 billion yuan in 2021. In 2022, the budget expenditure of the central government fund will increase significantly, or make preparations for solving the problem of subsidy arrears of new energy power generation projects. For a long time, subsidy arrears have been one of the main problems affecting new energy operators. Due to the untimely arrival of subsidy funds, some operating enterprises have high asset liability ratio and high cash flow pressure. At the same time, it also affects the development enthusiasm of subsequent new projects. If the follow-up subsidy problem is solved, the enterprise liquidity problem is expected to be alleviated and the development of new energy is expected to be better promoted.
In the medium and long term, the construction of new energy parity + green power trading market is expected to increase the income of new energy power generation assets, and the asset quality of green power operators is gradually improved. Since 2020, China’s scenery development has entered the era of comprehensive parity. With the continuous cost reduction at the manufacturing end, the economy of parity projects, especially the economy of short-term wind power generation, has continued to improve. Since September last year, the national development and Reform Commission and the national energy administration have officially replied to the State Grid Corporation of China and China Southern Power Grid Corporation to promote the pilot work of green power trading. In the context of global carbon reduction, the downstream manufacturing industry continues to pay more attention to carbon emissions in the whole life cycle, and the demand for green power at the manufacturing end is also expected to continue to push up the green power transaction price. The overall yield of green power operators is expected to be significantly improved.
Recommendation: arrears of renewable energy subsidies have always been one of the main problems restricting the development of Shanxi Guoxin Energy Corporation Limited(600617) in China. With the settlement of subsidies, the first positive thing is the cash flow repair of green power operation enterprises. It is suggested to pay attention to green power targets, Zhongmin Energy Co.Ltd(600163) , Cecep Solar Energy Co.Ltd(000591) , Jilin Electric Power Co.Ltd(000875) , China Suntien Green Energy Corporation Limited(600956) , Longyuan Power, Datang new energy, etc; Secondly, the cash flow repair of operators is expected to improve the enthusiasm of Shanxi Guoxin Energy Corporation Limited(600617) installation, and the manufacturing links of new energy power generation are expected to benefit fully.
Risk tip: the operator’s subsidy problem is not solved as expected.
