In 2018, the Group achieved significant progress in transformation and development strategy by further increasing the proportion of clean energy assets and accelerating its transformation into a clean energy enterprise. During the year under review, the Group completed the acquisitions of Guangxi Company, Shandong Company, Anhui Company, Hubei Company and Shouxian Company, where all their assets are high-quality clean energy projects. As of the end of 2018, the Group’s attributable installed capacity of clean energy reached 6,487.9MW, representing an increase of 38.16% as compared with the previous year.
During the year under review, the Group won the bid for and commenced the construction of four photovoltaic power projects with an installed capacity of 100MW each for Datong Phase II in Shanxi Province, the PRC. All of these projects are expected to commence operation in 2019. As national “Top-Runner” photovoltaic power demonstration projects recognized by the National Energy Administration of the PRC, they are of strategic significance to the Group.
In 2018, the Group recorded a substantial improvement in its operating results. The profit for the year attributable to owners of the Company was RMB1,098,355,000, representing a significant increase of 38.11% as compared with the previous year. It was mainly the impact of consolidating the results of the newly acquired clean energy project companies, in particular from the hydropower generating units in Guangxi, the PRC; the substantial increase in contributions from photovoltaic power and wind power; and the increase in both electricity sales and average on-grid tariff of coal-fired power that turned around to profit during the year under review. Basic earnings per share was approximately RMB0.11. As at 31 December 2018, net assets per share (excluding non-controlling interests) was RMB3.05.
Power Generation and Electricity Sold
The details of power generation and electricity sold of the Group are set out as follows:
| |
2018
MWh |
2017
MWh |
Changes
% |
| Total power generation |
74,101,429 |
66,683,402 |
11.12 |
| - Coal-fired power |
53,941,613 |
48,021,260 |
12.33 |
| - Hydropower |
16,460,658 |
17,067,759 |
–3.56 |
| - Wind power |
2,023,659 |
912,880 |
121.68 |
| - Photovoltaic power |
1,675,499 |
681,503 |
145.85 |
| |
|
|
|
| Total electricity sold |
70,964,796 |
64,053,714 |
10.79 |
| - Coal-fired power |
51,112,016 |
45,653,048 |
11.96 |
| - Hydropower |
16,254,508 |
16,852,555 |
–3.55 |
| - Wind power |
1,953,422 |
877,683 |
122.57 |
| - Photovoltaic power |
1,644,850 |
670,428 |
145.34 |
In 2018, the total electricity sold by the Group amounted to 70,964,796MWh, representing an increase of 10.79% as compared with the previous year. In respect of coal-fired power, due to the increased demand for electricity in the provinces where the Group’s coal-fired power plants are located and rising sales volume obtained by individual coal-fired power plants through market bidding, the electricity sold significantly grew 11.96%.
Under the Group’s vigorous efforts in promoting the development of clean energy, both electricity sale of wind power and photovoltaic power were significantly up by 122.57% and 145.34% year-on-year respectively. As for the hydropower segment, the Group experienced a significant decline in terms of power generation due to low rainfall in Hunan Province, the PRC where some of the Group’s hydropower plants are located, which offset part of the positive impact of consolidating the result of hydropower from Guangxi Company during the year.
The Group also performed well in gaining incentive electricity from local governments. In recognition of the fulfilment of certain specific targets of the government in respect of environmental protection, heat supply capacity of the generating units and productivity of some power generating units, the amount of various incentive electricity available for production accumulatively obtained by the Group increased significantly during the year as compared with the previous year.
The details of electricity sales of the Group’s main associates and joint ventures are set out as follows:
| |
2018
MWh |
2017
MWh |
Changes
% |
| Total electricity sold |
18,612,085 |
19,579,150 |
–4.94 |
| Associates |
|
|
|
| - Coal-fired power |
15,230,041 |
16,138,900 |
–5.63 |
| - Photovoltaic power |
99,594 |
62,323 |
59.80 |
| Joint Venture |
|
|
|
| - Coal-fired power |
3,282,450 |
3,377,927 |
–2.83 |
Heat Sold
In order to strongly support the existing environmental policies promulgated by the PRC government, the Group has carried out in-depth exploration in the heat supply potentials in various regions, strengthened the development of user base and promoted the construction of centralized heating pipe networks in recent years, thereby achieving satisfactory results in energy efficiency upgrade and development of heat supply market. In 2018, the total heat sold by the Group (including an associate and two joint ventures) was 18,480,340GJ, representing an increase of 1,022,329GJ or 5.86% as compared with the previous year.
In 2018, an associate of the Group completed the optimization and expansion of the heating system of four generating units, and the maximum heat supply of each generating unit has increased by 150%, greatly improving its heating capacity.
Direct Power Supply
The Group has played an active role in the market-oriented reform of national power industry, analyzed the opportunities therein and participated in direct power supply transactions (including competitive bidding for ongrid electricity sales) with a view to securing market share. In 2018, a number of coal-fired power plants and clean energy power plants of the Group participated in direct power supply transactions, the electricity sold through direct power supply transactions amounted to 19,913,594MWh and 3,360,047MWh respectively, together accounting for approximately 32.80% of the Group’s total electricity sold.
As direct power supply is a way of open market trading of electricity, the tariffs will therefore vary with supply and demand in the electricity market. In 2018, for those coal-fired power and hydropower plants of the Group which participated in direct power supply transactions, their average post-tax tariffs were at a discount of approximately 8.02% and 1.03% respectively compared with the respective average post-tax on-grid tariffs approved by the PRC government (including ultra-low emission tariff). The direct power supply tariff discount for coal-fired power was slightly lower than that of 2017.
On-Grid Tariffs
In 2018, the Group’s average on-grid tariffs as compared with the previous year were as follows:
coal-fired power was RMB324.57/MWh, representing an increase of RMB11.43/MWh;
hydropower was RMB280.86/MWh, representing a decrease of RMB3.76/MWh;
wind power was RMB463.55/MWh, representing an increase of RMB20.21/MWh; and
photovoltaic power was RMB677.98/MWh, representing a decrease of RMB46.00/MWh.
The year-on-year increase in average on-grid tariff of coal-fired power of the Group was mainly due to the rise of the relevant on-grid tariffs commencing from 1 July 2017. The increase in average on-grid tariff of wind power was mainly due to the higher average tariff resulting from some newly operating wind power plants and the consolidation of new wind power project companies with higher average on-grid tariffs. The decrease in average on-grid tariff of photovoltaic power was mainly due to the reductions of on-grid tariffs by the National Development and Reform Commission for those photovoltaic power projects that commenced operation after 1 January 2018 and 31 May 2018 respectively.
The Group will continue to closely monitor the development of environmental protection policies of the PRC government and strengthen the research on green energy tariff policies in order to actively seek for more green energy subsidies and in turn increase revenue.
Unit Fuel Cost
In 2018, the average unit fuel cost of the Group’s coal-fired power business was RMB215.62/MWh, representing an increase of 3.07% from that of RMB209.19/MWh of the previous year. The unit fuel cost in 2017 increased by 35.48% as compared with the prior year, indicating a significantly stabilized unit fuel cost in 2018.
Coal Consumption
In 2018, the net coal consumption rate of the Group was 302.41g/kWh, representing a decrease of 1.82g/kWh as compared with the previous year. The existing coal-fired power generating units of the Group are mostly environmental friendly power generating units with large capacity and high parameter. These units have achieved substantial effect in energy saving and emission reduction, which have helped maintaining the net coal consumption rate at a low level, and outperformed the national standard coal consumption rate of power supply.
Utilization Hours of Power Generating Units
In 2018, the average utilization hours of the Group’s coal-fired power generating units was 4,585 hours, representing an increase of 481 hours as compared with the previous year. Due to the fact that the PRC government has been committed to regulating the development of coal-fired power in an orderly manner in recent years, the growth of newly-installed capacity of coal-fired power across China slowed down and the national total electricity consumption increased while the average utilization hours of coal-fired power of the Group also picked up.
The average utilization hours of hydropower generating units was 3,148 hours, representing a decrease of 405 hours as compared with the previous year, mainly attributable to the decrease in power generation as a result of low rainfall in the river basins where some of the hydropower plants of the Group are located. The average utilization hours of wind power generating units was 1,967 hours, representing an increase of 114 hours as compared with the previous year. The average utilization hours of photovoltaic power stations was 1,398 hours, representing a decrease of 132 hours as compared with the previous year.
