Besides selling power stations, how can photovolta

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In addition to selling power stations, how can photovoltaic new energy enterprises save themselves

in addition to selling power stations, how can photovoltaic new energy enterprises save themselves

source: Economic Observer 10:04:30

key words:

the "pending" arrears of renewable energy subsidies have become the "fuse" for new energy enterprises to frequently sell power station assets recently

private enterprises such as GCL and Jingke had large holdings of power stations in the early years, and long-term arrears had a huge burden on the cash flow of enterprises. After entering October 2018, relevant enterprises accelerated the sale of power station assets in order to relieve the pressure

on August 15, an industry observer who did not want to be named told the economic observer that the chain effect of new energy subsidy arrears is magnifying, and the supply interruption of private enterprises has occurred. The way to solve this problem is the transfer of power stations. "But what is more worrying is that central enterprises, as the undertaker of new energy power stations, do not have much surplus food."

the above people said that this should be a relatively common phenomenon. In the next two years, the probability of frequent sales of photovoltaic power stations and wind farms will continue

for the eighth batch of renewable energy subsidy catalogue that the industry is waiting for, the Economic Observer learned from insiders that the relevant work is currently in the "pending" state, and it is unknown when to start

a person from the local financial department believes that it seems unrealistic to start the eighth batch of subsidies in a short time, because of the difficulties in fiscal revenue in 2019. In the past July, tax revenue showed a negative year-on-year growth

from June 2012 to June 2018, China issued a total of seven batches of renewable energy subsidy catalogue. According to the preliminary calculation of pilot think tank, the annual subsidy demand of the first seven batches of new energy projects included in the catalogue is more than 150billion yuan, and the annual renewable energy surcharge subsidy amount is about 80billion yuan. With the increase of new energy and installed capacity, the subsidy gap continues to accumulate. At the end of 2017, the subsidy gap for new energy power generation accumulated to 112.7 billion yuan, and the subsidy gap accumulated to 200 billion yuan in 2018. It is expected that it will exceed 1trillion yuan by 2030, and the annual subsidy demand will peak around 2025

top financial cost

since October 2018, new energy enterprises have accelerated the pace of selling power station assets

taking GCL new energy, the world's second largest photovoltaic power station operator, as an example, in October 2018, GCL new energy sold 80% of the equity of the 160 MW photovoltaic power station project and the corresponding shareholder loans to CGNPC solar. In the following December, it sold all the equity of the 140 MW photovoltaic power station project to the Three Gorges new energy. Through the above two transactions, GCL new energy received 557 million yuan, and its liabilities were reduced by about 1.833 billion yuan

in 2019, GCL new energy has not stopped selling power station assets. In March 2019, it sold 55% equity of about 280 MW photovoltaic power station project to Wuling power at a price of about RMB 335 million, and reduced debt by about RMB 1.6 billion

in May, GCL new energy sold a total of 70% equity of 977 MW photovoltaic power station to Shanghai Rongyao new energy, together with 70% shareholder loans. This transaction is expected to be completed within the year, which will bring about 2.06 billion yuan of cash flow to GCL new energy and reduce liabilities by about 5.8 billion yuan

then in June, an announcement from GCL poly said that it planned to transfer 51% of the equity of its holding subsidiary GCL new energy to Huaneng Group, pushing public attention to the highest point

the latest financing progress is that on August 22, GCL new energy and China Development Bank Hong Kong Branch entered into a financing agreement for the term loan financing of a total of US $130million. The final repayment date of the loan under the financing agreement is the expiration date of 24 months after the financing date of the first use

the main reason behind this series of actions is the pressure on enterprise cash flow caused by subsidy arrears. The operation of new energy power stations has two characteristics: capital intensive and high asset liability ratio. The large-scale subsidy delay makes the cash flow of power generation enterprises with a large number of stock projects face a severe test

the above industry observers said that in March 2017, the Ministry of Finance launched the declaration of the seventh batch of new energy subsidy catalogue, and the seventh batch of subsidy catalogue was published in June the next year. According to the arrangement of relevant departments, only projects merged before the end of March 2016 will be eligible for subsidies. For projects that have not been funded since then, the subsidy has been in arrears for three years

therefore, he calculated an account for the economic observer. Taking the annual power generation of a wind farm with an installed capacity of 50000 kW as an example, according to the average utilization hours of wind power of 2000 hours, the annual power generation is 100million kW. According to the benchmark electricity price of 50 cents in the past, enterprises can only get about 30 cents, which means that about half of the income is only reflected in the book, and enterprise accounts receivable soared

the financing cost of private enterprises is relatively high, especially for the newly-built power station and the wind farm of 50000 kwh. Based on the cost of 7000 yuan per kWh, it requires a total investment of 350 million yuan, of which 20% is self owned funds, and the rest is bank loans. The total loan of 280million is calculated at the interest rate of 10%, and the financial cost of one year is 28million. "From the perspective of income, if the power generation capacity of 100million kwh is multiplied by the electricity price, the income of about 30million can be obtained in a year, which is barely equal to the financial cost, not including the other non-technical costs"

a person with many years of experience in the photovoltaic industry told the Economic Observer: "the investment in the construction of power stations is generally large at one time, and the self owned funds in the industry are generally 20% to 30%, and the rest are bank loans. When the electricity price is 6% to 8%, the enterprise calculates the cost according to the rhythm of the normal payment of subsidies."

take the investment of 1million as an example, 700000 of which could receive electricity charges on time as originally expected, but now the subsidies of some power stations have been in arrears for more than 40 months, which means that enterprises are forced to bear 70% of the financing costs of power station construction funds for nearly four years

according to the semi annual report released by GCL new energy on August 6, as of June 30, 2019, the total borrowing cost was 1.446 billion yuan, an increase of 22% year-on-year. The average borrowing rate of new and existing loans increased from 6.5% in 2018 to 6.9% in 2019

correspondingly, the electricity price subsidies receivable are still rising. As of June 30, 2019, the electricity price subsidies receivable totaled 8.811 billion yuan, of which the electricity price subsidies receivable for the Sixth Batch or before, the Seventh Batch and poverty alleviation projects totaled 3.636 billion yuan, and the eighth batch or after the application for registration totaled 5.175 billion yuan

this figure was 6.78 billion yuan half a year ago, of which the electricity price subsidies receivable for the sixth or previous batch, the Seventh Batch and poverty alleviation projects amounted to 2.544 billion yuan, and the rest were the eighth or subsequent batch of applications for registration

at present, there is no official accurate statement about whether the declaration of the eighth batch of projects should be started. The above person said: "from March 2016 to now, please clean it with a steel brush dipped in gasoline, the subsidy arrears have lasted for 39 months, and the subsidies were not in place in the previous seven batches."

he also said: "taking the 8.8 billion subsidy receivable as an example, calculated at the borrowing rate of 6.9%, this alone will" eat "nearly 600million yuan of the enterprise, while GCL new energy's net profit in the first half of 2019 was 410million yuan, and the financial cost swallowed up more than half of the book profit."

generally speaking, the financing cost of private enterprises is 30% - 40% above the basic interest rate, while 3 The transmitter wiring is incorrect, and the benchmark interest rate of some state-owned enterprises will fall by 5%~10%. As a leading enterprise, GCL has a relatively low financing cost in private enterprises

multi party game

on the one hand, private enterprises are eager to sell power stations to alleviate the pressure of cash flow, and on the other hand, state-owned enterprises are also actively contacting the assets of new energy power stations in order to adjust the proportion of renewable energy installed capacity in their power structure, but state-owned enterprises are not blindly "saviors"

taking Huaneng Group, which has significantly accelerated the layout of the new energy sector since this year, as an example, an internal staff member of Huaneng said in an interview with the economic observer that when assessing related projects, the most basic principle is whether it can meet the basic financial requirements of the group for project acquisition

from the perspective of specific operation, for a large number of small-scale projects in the early stage,

Huaneng cooperates with private enterprises by taking the acquisition of a project as the starting point, and then continuing to acquire other power station assets of this enterprise in the same region. Another situation is to cooperate with the host manufacturer in exchange for the manufacturer's existing projects or resources in the form of subsequent cooperation, that is, to promise to use the manufacturer's fans in the subsequent new projects of Huaneng in the region

for the relatively large-scale power station assets, Huaneng's target is relatively simple: first, it needs to meet the return on investment; second, it also needs to examine the equipment, such as whether it is a mainstream model and how it operates

in view of the possible impact of new energy subsidies on its cash flow and whether this part of the subsidies in arrears should be included in the enterprise income, the above-mentioned person said that such a problem will exist, but it is not in the consideration scope of Huaneng at this stage

he told the Economic Observer: "in the acquisition process of some regions, the current pursuit is the book profit. The consideration behind this is that from the overall market of Huaneng, compared with thermal power assets, at least the new energy assets are profitable on the book at this stage. This is beneficial to the financial situation of regional companies. Whether the subsidies are not in place will drag down cash flow is an issue to be considered in the next stage."

the subsidy will finally be in place. For large groups, they can still carry the waiting process. "Huaneng's plate is large, and local cash flow is not a problem for the group. If there is a big problem in the basic fund of a provincial company, which will affect the acquisition and development, the group level will supplement it with capital. In short, it is the idea of 'maximizing overall interests'."

he further said: "according to the financial standards of Huaneng, the pre tax return on total investment of some projects can reach 11% - 12%, but these projects may be at a loss for private enterprises."

the Economic Observer learned that in order to further mobilize the enthusiasm of the acquisition and development of new energy projects, Huaneng Group delegated the whole process management authority of new energy and fully authorized 34 secondary units

the above Huaneng insiders told that the reason why the whole process management authority was delegated was also based on the group's consideration of supporting the great development of new energy. In the past, all decision-making procedures were in the hands of all departments of the group. At present, all secondary companies and project companies of the group company can do new energy projects, "those who can get projects are good cats", and allow secondary companies to operate across regions

a relatively obvious trend in the past two years is that due to the tight cash flow of private enterprises, the initiative is transferring to the buyer. "Private enterprises also know that Huaneng's acquisition of a large number of new energy assets will also lead to sky high prices. If so, we will not talk about it, because we have no sincerity at the beginning, and we have our own principles and bottom line."

the most intuitive change brought about by the massive march into new energy assets is the change in work rhythm

according to the above

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