According to the forecast of China Electricity Council (中國電力企業聯合會), it is expected that the national total electricity consumption will maintain a steady growth in 2018 and increase by about 5.5% year-on-year. It is estimated that the additional national power generation installed capacity will amount to approximately 120 million kilowatt, of which the installed capacity of non-fossil energy power generation will be approximately 70 million kilowatt. The national electricity supply and demand will be basically in balance.
In 2018, the PRC government will continue to promote the supply-side structural reform in the energy industry. Pursuant to the "Guiding Opinions on Energy-related Work in 2018" (2018年能源工作指導意見) released by the National Energy Administration (國家能源局), the PRC government will further phase out outdated capacity of coal-fired power generation. It is expected that the nationwide scale of coal-fired power production throughout the year will be further reduced as compared to 2017. It will also implement the capacity replacement policy of coal-fired power and grant approval for the construction of a batch of large-scale modern coal mine in an orderly manner. Taken together, the future trend of domestic coal prices remains uncertain. However, since the power supply and demand in China will be further balanced and the proportion of the Group's clean energy installed capacity keeps expanding, the impact of coal price factors on the Group's operating results will be gradually lessened.
In 2018, the PRC government will deepen the reform of State-owned capital and State-owned enterprises in order to enhance the core competitiveness of its major businesses. It will push forward the power system reform by regulating the power market transaction behaviours, improving related complementary policies and speeding up efforts to foster new drivers for energy development. It will also continue to deepen the financial reform in order to enhance supervision on financial sector and prevent and control financial risks. Objectively speaking, the external financial environment requires enterprises to establish a more robust capital structure.
The Group's key works in 2018 include:
Enhance the overall operating efficiency. To maintain the stable profitability of hydropower, drive the rapid growth of the wind power and photovoltaic power segments, proactively respond to the difficult operating environment of the coal-fired power industry, and more importantly, unleash the profitability of the newly acquired assets as soon as possible.
Firmly advance transformation and development. Vigorously develop clean energy and reduce the equity interest in some coal-fired power plants; develop integrated energy projects that cater to the market and end-users; strengthen the cooperation with advanced scientific research institutions to develop intelligent energy.
Control debt gearing and prevent business risks. Keep the debt ratio at a reasonable level; control capital expenditure yet ensuring necessary investments in high-quality projects in order to support the smooth transformation of the Group; prevent and control various risks to sustain stable operations.
Fulfill social responsibilities and continue to build an environmental friendly enterprise.