This week’s view: the parity process is advancing rapidly, and China’s offshore wind power is in the ascendant
China’s offshore wind power rush ended, and the parity project was quickly relayed. In 2021, China’s offshore wind power will grow rapidly driven by rush loading demand, and the annual new installed capacity is expected to exceed 10GW. Previously, the market generally expected that China’s offshore wind power would have a long “vacuum period” after the centralized release of rush loading demand, but the promotion speed of affordable offshore wind projects has been significantly faster than expected since the end of 2021. According to our incomplete statistics, as of mid January 2022, more than 7gw of affordable offshore wind power projects in Guangdong, Zhejiang, Shandong and Fujian have been subject to EPC / wind turbine / foundation bidding. In addition, nearly 3gw projects in Jiangsu and Shanghai have been subject to competitive configuration. From the bidding situation, the current bidding requirements for wind turbines of affordable offshore wind projects are basically more than 7mw. The large-scale wind turbines have promoted the rapid decline of wind turbine prices and accelerated the process of offshore wind power parity. China’s offshore wind power is in the ascendant, and the installed capacity in the 14th five year plan is expected to grow at a high speed. The eastern coastal provinces are the power load center of China, while the power generation resources are relatively insufficient. Offshore wind power will become an important development direction of the eastern coastal provinces. At present, Guangdong, Jiangsu, Shandong, Zhejiang, Guangxi, Fujian, Hainan and other provinces have announced the “14th five year plan” for offshore wind power development. The cumulative planned installed capacity of the six provinces at the end of the 14th five year plan exceeds 60GW, an increase of nearly five times compared with 10GW at the end of the 13th five year plan. Therefore, we believe that China’s offshore wind power installation space has been fully opened. With the continuous promotion of the parity process, China’s offshore wind power installation is expected to maintain high-speed growth.
China’s offshore wind power has great development prospects, and the offshore wind industry chain has long-term growth space. It is suggested to pay attention to submarine cable manufacturers Ningbo Orient Wires & Cables Co.Ltd(603606) , Jiangsu Zhongtian Technology Co.Ltd(600522) with better market structure and deep competitive barriers; Haifeng pile foundation / tower manufacturers with coastal location advantages Dajin Heavy Industry Co.Ltd(002487) , Jiangsu Rainbow Heavy Industries Co.Ltd(002483) , Haili wind power; And wind turbine manufacturers Ming Yang Smart Energy Group Limited(601615) , Shanghai Electric Wind Power Group Co.Ltd(688660) who have accumulated profound experience in the field of sea breeze.
Market review this week: the power equipment sector performed poorly in the third week of 2022
This week, the power equipment sector fell by 2.9%, lower than 4.0% of the CSI 300 index, of which other power equipment performed best (- 2.3%) and motors performed relatively poorly (- 3.5%).
Industry chain tracking: the prosperity of lithium battery industry chain continues, and the price of silicon material rises slightly
Lithium battery: the downstream demand boom is superimposed, and the shortage of some raw materials continues. The overall price of lithium battery industry chain still rises this week, and the cathode materials rise to varying degrees. Photovoltaic: the prices of silicon materials, silicon wafers and batteries all went up this week. The inventory clearing of components since November 2021 came to an end. The production scheduling of components improved significantly in January 2022, and the prices of silicon wafers and batteries were strongly supported. In the short term, the supply increment of silicon material in China is less than the demand increment, and the price of silicon material rises slightly before the Spring Festival. With the gradual release of new capacity of silicon material from 2022, the demand for terminal installation is expected to rise rapidly.
Risk tips: changes in new energy industry policies, supply chain bottlenecks lead to lower than expected demand, intensified market competition leads to decline in industry profitability, etc
