Event:
On the afternoon of May 17, EU time, the European Parliament passed the plan on the establishment of carbon boundary adjustment mechanism (CBAM). Compared with the previous plan, this plan expands the scope of the industry, brings the formal implementation time one year ahead of 2025, and includes indirect carbon emissions (emissions generated by outsourced power and heat used by manufacturers). The plan will be considered and voted in plenary from June 6 to 9.
Key investment points:
The inclusion of indirect carbon emissions from electricity highlights the environmental protection value of green electricity, and the consumption demand of green electricity is expected to increase. In terms of industry scope, compared with the original five industries of steel, aluminum, cement, chemical fertilizer and electric power, the new industries include organic chemicals, plastics, hydrogen and ammonia. In 2021, the trade volume of steel / aluminum / chemical fertilizer / organic chemicals and their products / plastics and their products exported by China to Europe accounted for 6.7% / 8.5% / 0.1% / 30.0% / 29.2% of the total trade volume exported to Europe. In terms of the scope of carbon accounting, it is different from the European Commission scheme which only accounts for direct carbon emissions. This scheme includes the indirect carbon emissions generated by the outsourced power and heat used by manufacturers. The European carbon price is high. On May 18, the EU carbon price was 83.23 euros (about 590 yuan). For China's export-oriented enterprises, the use of thermal power production will undoubtedly significantly increase the production cost. Take the steel and aluminum industries as an example. According to the world iron and Steel Association, in 2020, the average production of steel will be 1 ton, and the average emission of carbon dioxide will be 1.85 tons; According to China Nonferrous Metals News, the average carbon dioxide emission from the production of one ton of electrolytic aluminum in 2020 is 10.7 tons. Combined with the unit carbon price of about 590 yuan in the EU, the average carbon emission cost of producing a single ton of steel / electrolytic aluminum in 2020 is 1092 / 6313 yuan. The selection of green power production has become one of the best solutions for export enterprises to reduce costs. With the inclusion of new industries, China's green power consumption demand is expected to increase.
The premium of green power is further increased, and the volume and price rise together, helping to open up the growth space of green power operators. In terms of price, the green power premium has been expanded. According to Polaris power grid, the premium of the first batch of green power pilot transactions in September 2021 was 3-5 points / kWh, and the annual transaction premium in Jiangsu in 2022 has been expanded to 7.2 points / kwh; From January to April 2022, the green power premium of Guangxi's first green power transaction was 6.43 cents / kWh. In terms of trading volume, the national green power trading volume is limited, mainly due to the limited scale of new energy participating in green power trading and the imperfect linkage mechanism between green power and carbon market. In terms of green power supply, China began to implement new energy parity on the Internet in 2021. At present, the green power trading requirement is to give priority to organizing "new energy without subsidy" to participate in the trading. The premium space for "new energy with subsidy" to participate in green power trading is limited, which reduces its enthusiasm to participate in the market. In terms of carbon market, the green electricity market is linked with the carbon emission right market. Users may deduct the total carbon emission by directly purchasing green electricity. For market players, this method is more convenient and easy to implement than CCER. With the continuous promotion of China's affordable Internet access and the improvement of the linkage mechanism between green power and carbon market, the trading volume of green power is expected to increase.
Wind power is expected to maintain good profitability, and the yield of land wind projects is expected to rise. In terms of price, the newly approved onshore wind power projects in 2022 still continue the parity access policy. The cost of wind power continues to decline. In terms of land wind, in May 2022, the bid winning price of Huadian Group's Inner Mongolia Damaoqi wind power project unit has decreased to 1670 yuan / kW (from Polaris power network), 27% lower than the average bid winning price of 2288 yuan / kW of CGN new energy wind power project at the end of 2021 (from wind power headlines); In terms of sea breeze, in April 2022, the bid winning price of Shandong 500MW offshore wind power project invested by Guohua has dropped to 3828 yuan / kW (from century energy network), 45% lower than the average purchase price of 7000 yuan / kW in 2020 (from Wall Street). Under the background of stable electricity price, the decline of wind power cost is expected to maintain the good profitability of the project. The high price of silicon material stabilized. According to the 21st Century Business Herald, the price of silicon material stopped rising for the first time on May 18, 2022, and the average transaction price of single crystal re feeding price was 261100 yuan / ton. According to the national energy information platform, the silicon material output in 2022q1 is 159000 tons, with a year-on-year increase of more than 40%. According to the statistics of Photovoltaic Industry Association, the production capacity of major silicon enterprises will increase by about 50.1% in 2022. With the gradual release of production capacity, the price of silicon is expected to decline and the yield of photovoltaic projects is expected to rise.
Investment suggestion: for the industry, the inclusion of indirect carbon emissions from electricity highlights the environmental protection value of green electricity, and the consumption demand of green electricity is expected to increase. Maintain the industry "recommended rating". In terms of individual stocks, it is suggested to pay attention to the thermal power targets that are expected to improve profits, such as Huaneng Power International Inc(600011) , Gd Power Development Co.Ltd(600795) , Huadian Power International Corporation Limited(600027) , Shanghai Electric Power Co.Ltd(600021) , Fujian Funeng Co.Ltd(600483) , China Resources Power, Guangdong Electric Power Development Co.Ltd(000539) , Shenergy Company Limited(600642) , Datang International Power Generation Co.Ltd(601991) , and China power; High quality targets of green power China Three Gorges Renewables (Group) Co.Ltd(600905) , Longyuan Power, Tianjin Guangyu Development Co.Ltd(000537) , Jilin Electric Power Co.Ltd(000875) , Nyocor Co.Ltd(600821) , Cecep Wind-Power Corporation(601016) , Cecep Solar Energy Co.Ltd(000591) , Zhongmin Energy Co.Ltd(600163) , CGN new energy; Distributed photovoltaic field Jinko Power Technology Co.Ltd(601778) , Zhejiang Chint Electrics Co.Ltd(601877) , Jiangsu Linyang Energy Co.Ltd(601222) , Ganghua gas, Skyworth Group, Zhejiang Sunoren Solar Technology Co.Ltd(603105) , Hangzhou Star Shuaier Electric Appliance Co.Ltd(002860) ; It is suggested to pay attention to Yunnan Wenshan Electric Power Co.Ltd(600995) , Jiangsu Linyang Energy Co.Ltd(601222) , Shaanxi Baoguang Vacuum Electronic Apparatus Co.Ltd(600379) , Zhejiang Wanliyang Co.Ltd(002434) .
Risk warning: the demand for electricity is declining; Focus on the improvement of the company's performance as expected; Risk of policy change; Electricity prices fell sharply; The installed capacity is less than expected; Market competition intensifies.
