In 2020, the national total electricity consumption in China rose by 3.1% year-on-year and the national power generation recorded a year-on-year increase of 4.0%, among which, hydropower, wind power, photovoltaic power and coal-fired power grew by 4.1%, 15.1%, 16.6% and 2.5% respectively.
The profit attributable to equity holders of the Company for the year ended 31 December 2020 increased by RMB423,924,000 to RMB1,708,305,000, representing an increase of 33.01% from 2019. Basic earnings per share was approximately RMB0.17 (2019: RMB0.13). As at 31 December 2020, net assets per share (excluding non-controlling interests and other equity instruments) was approximately RMB3.10.
With the Group’s new energy projects entered into a period of concentrated official commercial production, return on investment unleashed gradually and the proportion of profits contributed by the new energy projects has continued to increase. The electricity sales of photovoltaic power and wind power increased year-on-year by 44.45% and 23.30%, respectively. The electricity sales of hydropower also recorded a significant year-on-year increase of 16.83% as a result of abundant rainfall in the river basins where the Group’s hydropower plants are located during the second half of the year.
During the year under review, the development and performance of the Group’s principal businesses were as follows:
Attributable Installed Capacity
The details of attributable installed capacity of the Group as at 31 December 2020 are set out as follows:
As at 31 December 2020, the attributable installed capacity of the Group’s power plants reached 23,878.2MW, representing a year-on-year increase of 2,765.0MW. Among which, the attributable installed capacity of clean energy including hydropower, wind power, photovoltaic power and natural gas power was 9,393.6MW in total, accounting for approximately 39.34% of the total attributable installed capacity and representing an increase of 3.77 percentage points as compared with the previous year.
The Group’s new power generating units that commenced commercial operation during the year are presented by type as follows:
Note: Apart from the above new power generating units, as compared with the previous year, the Group recorded a net increase in attributable installed capacity of 2,765.0MW after taking into account the followings: (i) the acquisition of attributable installed capacity of 105MW from a new project company; (ii) the increase in attributable installed capacity of 285.3MW due to changes in equity interests in certain power plants; (iii) the decrease in attributable installed capacity of 150.0MW due to the sale or shutdown of power plants; and (iv) the changes in the total installed capacity of associates, joint ventures and Shanghai Power.
The Group has been pursuing its transformational development strategy towards the direction of clean, integrated, intelligent and transnational development. During the year under review, the Group’s additional installed capacity of clean energy was 1,827.1MW, accounting for approximately 58.06% of the total additional installed capacity.
Photovoltaic Grid Parity Project
During the year under review, “Liaoning Chaoyang 500MW Photovoltaic Grid Parity Project”, the single largest project in terms of capacity among the first batch of photovoltaic grid parity projects in China, was put into full operation. In order to further promote social and economic development in Chaoyang, the Company has entered into agreement with Chaoyang municipal government in respect of the further development of clean energy projects, pursuant to which the Company will develop three other new energy projects in the city and establish an intelligent and ecological new energy demonstration base with a capacity of million kW in the future.
In addition, another three photovoltaic competitive-bidding projects totalled 440MW in Ningxia Hui Autonomous Region of the PRC have also been put into production successively during the year, marking the official entry into the “Era of competitive-bidding and grid-parity” of the Group’s renewable energy business, which will gradually reduce the reliance on government subsidies and lay a more solid foundation for its sustainable development.
Natural Gas Project
Located in Jingmen Hi-Tech Industrial Development Zone, Hubei Province, the natural gas project of 154MW is the Group’s first natural gas project. The Group will continue to explore the business field of natural gas power generation.
Intelligent Energy Project
CP Zhihui, a subsidiary of the Company engaging in the development of integrated intelligent energy projects in Beijing, the PRC, completed four projects last year, namely:
(i) The “Photovoltaic Power Storage and Charging” project for Huitong Times Square (惠通時代廣場), which is the first project in Beijing that integrates photovoltaic power, energy storage and charging station construction, and develops a smart micro grid system for the building.
(ii) The integrated energy project in the USTB Industrial Park (北科產業園) which provides integrated energy services such as electricity, heating and cooling for the locality through internal combustion engines, electric screw-type chillers, rooftop photovoltaics, and smart photovoltaic carports, thereby achieving multi-energy synergy.
(iii) The “zero carbon” energy supply project of Baozhigu International Conference Center Beijing (北京寶之谷國際會議中心) was officially put into operation. With the complementary support and adjustment among power sources, power grids, power loading and energy storage, the project has enhanced the ability to maintain a dynamic balance of the power system in a more economical, efficient and safer manner.
(iv) The integrated intelligent energy project in Yanqing District, Beijing, which achieved significant energy saving and substantial reduction of overall energy consumption by providing cooling and heating services through air-source heat pumps, electric combustion engines and phase-change heat storage.
During the year under review, the Group’s new integrated intelligent energy management platform was put into trial run officially, which facilitated the development of photovoltaic power stations with a full coverage of multi-functional modules such as operational performance management and intelligent diagnosis. This further enhanced the level of integrated management, efficient operation and maintenance, and precise decision-making, and thus constantly reinforced the Group’s operation capabilities of new energy business.
Overseas Management Project
In order to achieve the goal of becoming a world-class clean energy enterprise in the long run, during the year under review, the Company entered into an Entrusted Management Agreement with CPI Holding and SPIC Overseas, pursuant to which the Company will provide planning, operation and management services to their clean energy power plants in Mainland China and power plants abroad. As negotiated, the Company also obtained the right of first refusal to acquire the Entrusted Companies, which created opportunities for expansion into overseas markets. Through the entrusted management, the Company can better understand the asset quality, financial status and profitability of the Entrusted Companies, which, in the view of the Board, will be of important strategic significance for our future business development. For details, please refer to the Company’s announcement dated 31 March 2020.
In June 2020, Guangxi Company, a subsidiary of the Company, established a joint venture in Guangxi Zhuang Autonomous Region of the PRC. The formation of the joint venture enables each of the joint venture partners to leverage their capital and investment capabilities, to share technical experience and to explore market development opportunities through concerted and strategic efforts to a greater extent. The joint venture will serve as a platform for investments in the ASEAN region with a focus on investment and development of clean energy, which is conducive to the Company’s development and exploration of clean energy projects in the ASEAN region and will provide beneficial experience and reference for the Company’s overseas project development in the future. For details, please refer to the Company’s announcement dated 2 July 2020.
Projects under Construction
As at 31 December 2020, the attributable installed capacity of the projects under construction was 4,357.1MW, among which, the attributable installed capacity of coal-fired power and clean energy segments were 2,000MW and 2,357.1MW respectively. The clean energy projects under construction accounted for 54.10% in aggregate. Despite the slight delay in the construction progress of projects under construction due to the pandemic at the beginning of last year, several major projects commenced operation as scheduled during the year, including Chaoyang Photovoltaic Power Station, Jingmen Power Station and the expansion of Dabieshan Power Plant. The 500MW expansion project of Wu Qiang Xi Power Plant owned by Wu Ling Power was also progressing in an orderly manner.
New Development Projects
During the year under review, the Group once again achieved remarkable performance in the development of new energy projects. The 50MW agricultural-photovoltaic complementary power generation project in Xishui, Hubei was included in the list of photovoltaic grid parity projects and planned to complete grid connection in the first half of 2021. The Group officially commenced the construction of the integrated photovoltaic charging comprehensive intelligent energy project of Tianjin Fushida Group (天津富士達集團) and the photovoltaic storage and charging project of TW Solar in Hefei, Anhui. It also completed the acquisition by capital injection of two grid parity projects in Shanxi, with a capacity of 100MW each. The projects are expected to commence operation in the first half of 2021, which marks another step of the Group towards clean energy development.
In addition, we will promote the development of integrated intelligent energy projects, such as the co-generation of heating, power, water, cooling and gas supply, photovoltaic power, energy storage, hydrogen power and incremental distribution network projects. We will seize the opportunities for the development of energy storage brought by the tariff difference between peak and low period, while securing resources of hydrogen refueling stations to establish the industrial chain for generation, storage and application of hydrogen power.
Currently, the total installed capacity of new projects of the Group at a preliminary development stage (including projects with applications submitted to the PRC government for approval) is approximately 4,800MW, which are mainly clean energy projects (including natural gas power generation projects) primarily located in areas with development potentials, including Shandong, Guangxi, Hunan and Ningxia.
Power Generation and Electricity Sold
In 2020, the details of power generation and electricity sold by the Group are set out as follows:
In 2020, the total electricity sold by the Group amounted to 88,255,525MWh, representing an increase of 5.62% as compared with the previous year. The changes in electricity sold by each power segment as compared with the previous year are as follows:
An increase of 16.83% in electricity sold due to a year-on-year increase in rainfall in the river basins where most of the Group’s hydropower plants are located during the year.
Benefiting from the large number of new power generating units of the Group that commenced commercial operation during the year, as well as the strengthening clean energy dispatchment and consumption under the national promotion of green development, the electricity sales of wind power and photovoltaic power recorded a year-on-year increase of 23.30% and 44.45%, respectively.
Affected by the COVID-19 pandemic at the beginning of the year, coupled with the increase in the consumption of clean energy which squeezed the demand for coal-fired power generation, resulting in a decrease of 2.23% in the electricity sold.
The electricity sold amounted to 186,557MWh as the first natural gas power project officially put into operation during the year.
In 2020, the Group also performed satisfactorily in gaining incentive electricity from local governments. In recognition of the fulfilment of certain specific targets required by the local governments in respect of environmental protection, heat supply capacity and productivity of certain power generating units, the accumulated amount of various incentive electricity available for production obtained by the Group during the year increased as compared with the previous year.
In 2020, the details of electricity sold by the Group’s main associates and joint ventures are set out as follows:
In order to strongly support the existing environmental policies promulgated by the PRC government, the Group has carried out in-depth exploration of the heat supply potentials in various regions, strengthened the development of heat market and promoted the construction of centralized heating pipe networks, thereby achieving positive results in various areas such as energy efficiency upgrade and development of heat supply market. In 2020, the total heat sold by the Group (including an associate and a joint venture) was 22,151,047GJ, representing an increase of 1,467,398GJ or 7.09% as compared with the previous year.
In an effort to boost heat supply capacity, five subsidiaries of the Group are carrying out technical upgrade for the heating system of eight generating units in total, which are expected to be completed successively starting from 2021.
Direct Power Supply
The Group has actively participated in the market-oriented reform of national power industry, analyzed the opportunities therein and participated in direct power supply transactions (including competitive bidding for on-grid electricity sales) with a view to securing market share. Subsidiaries in different provinces have also established their electricity sales centers to serve and attract more target customers.
In 2020, a number of coal-fired power plants and clean energy power plants of the Group participated in direct power supply transactions, and the electricity sold through direct power supply transactions amounted to 34,406,580MWh and 6,647,263MWh respectively, together accounting for approximately 46.52% (2019: 46.09%) of the Group’s total electricity sold.
In 2020, 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 9.81% and 5.75% (2019: 7.87% and 4.66%) respectively compared with the respective average post-tax on-grid tariffs officially approved by the PRC government (including ultra-low emission tariff). The direct power supply tariff discount for coal-fired power increased as compared with the previous year, mainly due to the intensified competition of market-power trading in Shanxi Province and Anhui Province which has resulted in more tariff discounts.
Average On-Grid Tariff
In 2020, the Group’s average on-grid tariffs of each power segment as compared with the previous year were as follows:
As compared with 2019, the changes in the average on-grid tariff of each power segment of the Group were mainly due to the following factors:
The reduction of on-grid tariff of hydropower in Hunan Province with effect from 1 July 2019 as promulgated by the Development and Reform Commission of Hunan Province where most of the Group’s hydropower plants are located, and the government’s subsidies for electricity fee to the ancillary service markets are required to be shared equally among power generating enterprises under the policy implemented by the local government last year.
The higher average tariff of wind power during the year as a result of the Group’s newly operating wind power plants which charged a relatively higher average on-grid tariff than that of the existing wind power plants and the reduction in value-added tax rate from 1 April 2019.
The impact of subsidies reduction policy for photovoltaic power tariff and the commencement of operation of the Group’s photovoltaic power generation grid parity projects, which resulted in a lower average tariff of photovoltaic power.
Despite the higher average tariff of coal-fired power as a result of the reduction in the value-added tax rate from 1 April 2019, the overall average tariff of coal-fired power slightly decreased due to the increased proportion of sales of direct power supply with a lower average tariff.
The Group will continue to closely monitor and strengthen research on market-power trading policies and green energy tariff policies in order to actively seek more favorable terms regarding market-power trading.
Average Utilization Hours of Power Generating Units
In 2020, the average utilization hours of power generating units of each power segment of the Group as compared with the previous year were as follows:
As compared with 2019, the changes in the average utilization hours of power generating units of each power segment were mainly due to the following factors:
The increase in power generation as a result of the increase in rainfall in the river basins where most of the Group’s hydropower plants are located during the year.
The higher average utilization hours of the newly operating generating units.
The results achieved from effective facility maintenance.
The decrease in electricity consumption due to the COVID-19 pandemic at the beginning of last year and the increase in the consumption of clean energy which squeezed the demand for coal-fired power.