On Wednesday, the EU announced an energy plan called “repowereu”, which involves a capital scale of up to 210 billion euros (about 221 billion US dollars) in the next five years. It mentioned the establishment of a special EU Cecep Solar Energy Co.Ltd(000591) strategy to double Cecep Solar Energy Co.Ltd(000591) photovoltaic power generation capacity by 2025 and install 600gw by 2030.
“This is good for China’s photovoltaic enterprises, and the export of China’s photovoltaic products may further accelerate.” Qu Fang, an investment consultant of Wanlian securities, said in an interview with the reporter of Securities Daily.
photovoltaic industry boom further improved
The “repowereu” energy plan includes increasing the import of renewable energy and liquefied natural gas and reducing energy demand, so as to reduce energy dependence on Russia and accelerate the shift to green energy.
“The recent conflict between Russia and Ukraine has had an impact on the global energy supply. The EU’s increase in the proportion of renewable energy, including photovoltaic power generation investment, is not only the need to deal with climate change, but also out of various strategic considerations such as energy independence and energy security, so as to adapt to many new challenges and risk factors.” Qi Haili, President of Beijing Teyi Sunshine New Energy Technology Co., Ltd., said in an interview with the reporter of Securities Daily that with the rise of fossil energy prices, not only the EU, but also the global demand for renewable energy is rising, which is also good for the photovoltaic industry, and the overall prosperity of the photovoltaic industry is further improved.
Citic Securities Company Limited(600030) pointed out that since the beginning of this year, the conflict between Russia and Ukraine has triggered an energy crisis in Europe. European countries have paid more attention to energy security and energy independence, accelerating the transformation to renewable energy. Among them, Germany has raised the time for full use of renewable energy to 2035, stimulating the demand for photovoltaic products.
According to the data of the European Photovoltaic Association, in 2021, the installed capacity of new PV in Europe was 25.9gw, a year-on-year increase of 34%; Combined with export data, the installed capacity of new PV in Europe is expected to exceed 40gw in 2022, with a year-on-year increase of more than 54%. Driven by the European market, Citic Securities Company Limited(600030) it is estimated that the global installed capacity of new photovoltaic is expected to reach 230gw in 2022, with a year-on-year increase of more than 30%, and the demand rhythm is expected to improve quarter by quarter.
“While the market demand is strong, China’s photovoltaic industry relies on the large-scale advantage of the strong industrial chain and has strong competitiveness in the world. Meanwhile, China’s internal competition in the industry is also tending to the era of oligarchy, and phenomena such as capital increase, production expansion and industrial upgrading occur frequently.” Qi Haiyu believes that the advantages of large-scale production capacity are also making it possible for Chinese photovoltaic enterprises to have a certain pricing power to support the high price of photovoltaic silicon materials and silicon chips.
However, he also said that the photovoltaic industry has the characteristics of capital intensive and technology intensive. The industry access needs to have a certain core competitiveness and be prepared for a long-term race in three to five years or even more than ten years. Capital investment alone is far from enough, “The process upgrading and technology iteration of the photovoltaic industry are relatively fast, which will test the R & D ability and cost control of enterprises, that is, the ability to reduce costs and increase efficiency is very important.”
photovoltaic products export will accelerate
“China’s photovoltaic industry has a price advantage, so the energy plan is good news for the overseas output of China’s photovoltaic industry without considering other geopolitics.” An Guangyong, an expert member of the Credit Committee of the all union mergers and acquisitions Association, told the Securities Daily.
According to pvinfolink data, China’s photovoltaic module exports in the first quarter of this year were 9.6gw, 14.0gw and 13.6gw respectively, with a total of 37.2gw, a year-on-year increase of 112%; Among them, driven by the “double carbon” goal, the conflict between Russia and Ukraine has accelerated the process of traditional energy substitution. Europe imported 16.7gw of Chinese photovoltaic modules in the first quarter, up 145% from 6.8gw in the previous year.
Qufang expects that the installed capacity of PV in Europe will be close to 30GW in 2021, accounting for about 18% of the world, including 25.9gw in the EU. “In terms of classification, the installed capacity of distributed PV in Europe accounts for about 80%, mainly due to the high degree of overall urbanization, relatively small plain area suitable for ground power stations, and more suitable application scenarios for roof distributed PV.”
As a global leader in photovoltaic enterprises, Longji green energy also pays attention to the plan. “The company’s market share and shipment volume in the European market are in a leading position. The launch of the plan is good for the company’s layout in the European market.” The relevant person in charge of Longji green energy told the reporter of Securities Daily.
According to the financial report of Longji green energy in 2021, the company achieved a revenue of 80.932 billion yuan last year, including 11.386 billion yuan in Europe, accounting for 14.07% of the revenue.
In Qu Fang’s opinion, the performance of Longji green energy in the European market this year is expected to be further improved. “In the first quarter of 2022, in order to accelerate the development of BIPV (photovoltaic building integration) business, the company and Center International Group Co.Ltd(603098) carried out integrated operation of the business. This is also the direction of European Photovoltaic development in the next few years, so the company has great potential for business development in the future.”
Qu Fang said that the European market is usually the core sales place of Chinese photovoltaic module manufacturers, accounting for a high proportion of total revenue. First, the gross profit margin of components is high, which is expected to be about 20%, which is significantly higher than that of Chinese enterprises. Secondly, the business growth of component companies in Europe is fast, such as inverter enterprises. In 2021, the overseas revenue of distributed Inverter Companies Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) and Ginlong Technologies Co.Ltd(300763) increased by 57% and 42%, that of Sungrow Power Supply Co.Ltd(300274) was 39%, and that of Shenzhen Invt Electric Co.Ltd(002334) was 26%.
Citic Securities Company Limited(600030) also pointed out that the capacity layout of photovoltaic manufacturing industry in Europe is less, and most products will be supplied by Chinese enterprises, which will further stimulate the demand for Chinese products. It is suggested to pay attention to the overseas layout of photovoltaic industry chain.
