As an important starting point for China to promote infrastructure construction and dual carbon development, China’s offshore wind power shows a strong growth trend in the first year of parity in 2022: according to the construction planning of approved projects and projects to be competed for in all provinces, the offshore wind power projects that implement the bidding of main equipment are expected to exceed 20GW in 2022, with a total investment of more than 200 billion yuan. The wind power equipment manufacturing industry is making every effort to build production capacity to ensure the subsequent equipment delivery demand. New viewpoint of Guosen: 1) the sea breeze bidding in 2022 is expected to exceed 20GW, significantly exceeding the historical record of 15.6gw set in the early stage of rush loading in 2019, with a year-on-year growth rate of 617%; 2) Shandong and Guangdong have introduced subsidies and rewards linked to the time point of grid connection; At the same time, the competitive allocation of resources is linked to the construction progress of the projects approved in the early stage. The developers are highly motivated to rush for completion and have strong planning implementation. The delivery of equipment is becoming increasingly tense in the second half of the year; 3) Far reaching sea project bidding has been launched one after another, and the demand for high-end submarine cables has increased significantly; 4) Investment suggestion: we are firmly optimistic about the rapid growth of affordable sea breeze as a supporting green power industry for China’s dual carbon development, and it is also an important source of China’s regional infrastructure demand in the 14th five year plan. At the same time, the global offshore wind power market is a golden track with five times the growth in 10 years. With the technology accumulation and market foundation comparable to that of the world, China’s leading enterprises are expected to successfully open the international market during the 14th Five Year Plan period. It is suggested to focus on leading enterprises in offshore wind power manufacturing and construction: Ming Yang Smart Energy Group Limited(601615) , Ningbo Orient Wires & Cables Co.Ltd(603606) , China Energy Engineering Corporation Limited(601868) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , Riyue Heavy Industry Co.Ltd(603218) , Xinjiang Goldwind Science And Technology Co.Ltd(002202) , Titan Wind Energy (Suzhou) Co.Ltd(002531) , Qingdao Tianneng Heavy Industries Co.Ltd(300569) . 5) Risk tip: the impact of macro factors such as epidemic situation on production and operation, product quality risk and trade friction. Comments:
The national offshore wind power bidding is expected to exceed 20GW in 2022, and the construction volume is expected to double to 12gw in 2023
According to the new industrial chain survey information of Guoxin power, the total number of approved and pending sea breeze projects planned to be tendered in eastern China in 2022 exceeds 25gw, including 15.25gw of approved projects and 10.2gw of pending projects. Assuming that 20GW will be tendered in 2022, this data significantly exceeds the historical record of 15.6gw of sea wind turbine bidding in 2019, with a year-on-year increase of 617% compared with 2.79gw in 2021. 2022 is the first year of China’s offshore wind power parity. Since the offshore wind bidding in 2021 is only 2.79gw, we expect the national offshore wind power hoisting capacity to drop to 6.5gw in 2022 from 14.2gw in 2021. However, there will be a strong rebound in 2023, with a year-on-year increase of 85% to 12gw. The new installed capacity of offshore wind power will further increase to 14gw in 2024, and the new installed capacity is expected to reach 18gw in 2025.
After Guangdong, Shandong has made clear the local subsidies for offshore wind power, and Zhejiang is expected to follow up
In June 2021, the people’s Government of Guangdong Province officially issued the implementation plan for promoting the orderly development of offshore wind power and the sustainable development of related industries, specifying that offshore wind power projects approved by the end of 2018 and connected to the grid with full capacity from 2022 to 2024 will enjoy construction subsidies of 1500, 1000 and 500 yuan / kW respectively. On April 1, 2022, Shandong Provincial Energy Bureau said that for the offshore wind power projects completed and connected to the grid in 20222024, the provincial finance will give construction subsidies of 800, 500 and 300 yuan / kW respectively, and the scale of subsidies will not exceed 2gw, 3.4gw and 1.6gw respectively. In November 2021, the development and Reform Commission of Zhejiang Province issued the implementation opinions on promoting the high-quality development of new energy in Zhejiang Province (Revised Version), which pointed out that according to the principle of “gradually declining and encouraging advanced”, the on grid price of offshore wind power should be formulated year by year, and financial and other support should be implemented to support the offshore wind power projects in the sea areas under the provincial administration to gradually realize parity on the grid. According to the spirit of relevant documents, Zhejiang Province is expected to introduce local subsidies for offshore wind power price, which will become the third Province in China to implement local subsidies for offshore wind power.
Demand calculation of offshore wind power equipment from 2022 to 2025
Since September 2021, China’s offshore wind power parity project has successively started the bidding of core equipment including wind turbine, tower, foundation and submarine cable. At present, the bidding situation shows that the bid winning price range of wind turbine is 2800 yuan / kw-4200 yuan / kW, the average bid winning price of wind tower is 9000 yuan / ton, and the average bid winning price of submarine cable (including main cable and array cable) is 1.8-2.5 billion yuan / GW. We estimate that the market compound growth rate of wind turbine / pipe pile / submarine cable equipment from 2022 to 2025 is 47 / 45 / 50% respectively.
20222025 is expected to usher in the global offshore wind power boom resonance
Under the guidance of the national “double carbon” strategy, the eastern provinces have successively issued relevant plans for offshore wind power in the 14th five year plan since 2020, and actively supported the cost reduction, efficiency enhancement and parity development of offshore wind power in this region. The new installed capacity of offshore wind power in the 14th five year plan is expected to exceed 60GW (including the defined goals and expected goals), and the new installed capacity is expected to exceed 50gw in 20222025, During the 14th Five Year Plan period, the installed capacity of offshore wind power started preliminary work (including construction capacity) is up to 150gw. Major economies in the world, including Europe, the United States, Japan and South Korea, have formulated huge offshore wind power development plans. We expect the annual growth rate of overseas new installed capacity to reach 35% from 2022 to 2025.
Investment suggestions:
We are firmly optimistic about the rapid growth of affordable sea breeze as a supporting green power industry for China’s dual carbon development, and it is also an important source of China’s regional infrastructure demand in the 14th five year plan. At the same time, the global offshore wind power market is a golden track with five times the growth in 10 years. With the technology accumulation and market foundation comparable to that of the world, China’s leading enterprises are expected to successfully open the international market during the 14th Five Year Plan period. It is suggested to focus on leading enterprises in offshore wind power manufacturing and construction: Ming Yang Smart Energy Group Limited(601615) , Ningbo Orient Wires & Cables Co.Ltd(603606) , China Energy Engineering Corporation Limited(601868) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , Riyue Heavy Industry Co.Ltd(603218) , Xinjiang Goldwind Science And Technology Co.Ltd(002202) , Titan Wind Energy (Suzhou) Co.Ltd(002531) , Qingdao Tianneng Heavy Industries Co.Ltd(300569) .
Risk tips:
The impact of epidemic and other macro factors on production and operation, product quality risk and trade friction.
