Against the backdrop of strong government push and natural changes in the industry, the intensity and depth of the current round of structural adjustment are unprecedented and will have far-reaching implications for china’s future industrial landscape. Although many factors, such as economic restructuring, have led to a slowdown in the country's economic growth, a series of modest stimulus policies, introduced by the central government in a timely and modest manner, have kept the “bottom line” of economic growth alive and have provided a solid basis for china's major economic transformation。
In the macroeconomic context of micro-stimulation, major transformation, and in order to understand the latest developments in the current hotspot industry, its evolutionary trajectory and the risks of opportunity, the daily economic news, distributed across the country by more than 40 journalists, went into factories, mines, hospitals, ports, markets, research institutions and laboratories and obtained valuable information on the current real economy from the industry, which led to the development of a special report entitled “micro-stimulation great transformation — an eco-survey of focus industries 2014”. The first phase — the photovoltaic ground station — was launched today。
The convention
Symptoms
Cost policy `two-wheel' drive capital for beach photovoltaic plants
Every time a reporter comes out
The domestic market for photovoltaics will see an explosion of growth。
As subsidy policies land and upstream product costs have fallen significantly, china's light-voltage industry has moved from the manufacturing of past products to the assembly stage. In a situation where distributed power generation is not yet fully mature, terrestrial power stations, by virtue of their relative maturity and the stability of cash flows, have become the most beneficial link in the pv chain, leading to the reversal of capital on various routes。
By the end of 2013, there were a cumulative network of 741 large-scale photovoltaic projects in 22 major urban areas of the country, mainly in the north-west. In july 2014 alone, the listed companies announced at least 10 projects of 1. 1 gw in the construction or proposed construction of photovoltaic plants。
However, while capital favours photovoltaic plants, it has to deal with “resource scarcity”. According to the daily economic news reporter, since the national energy agency planned to install only 6 gw for the ground power station in 2014, road blocks are now becoming tighter and the first half of the year has fallen short of expectations。
Investments of listed companies in photovoltaic plants/
On 30 july, lokshan electricity released a message that, in cooperation with sunpowercorporation, the central ring share, and sichuan limited (handing) limited, the two major investors with a governmental background, and tianjin union investment holdings ltd., it was proposed to develop an efficient light-voltaic centre with an installed capacity of 3 gw in sichuan province, with the long-term objective of developing installed capacity in excess of approximately 10 gw。
However, just half month ago, china science and technology (002309, sz) issued a bulletin stating that liteng, a sub-company under the banner of ningxia, had received a notice from ningxia liteng to register the relevant photovoltaic power project on the scale of 100 mw, which was located at shikiyama, and that on 18 july, a public announcement by lungi's shares (601012, sh) indicated that the full-fledged sub-company company under the banner had received a notification from ningxia reform commission to register and register the project with lungi 30 mw photovoltaic power station。
There is an ongoing downstream extension of the industrial chain and a large amount of investment in photovoltaic ground power stations, as well as econ (002610, sz). Following the announcement at the end of june of plans to spend not more than $850 million on the construction of the gansu jincheon photovoltaic power plant, acst recently contributed $10 million to the acquisition of a xinjiang photovoltaic enterprise。
In addition to private capital, state capital is in the mood for photovoltaic plants. In march of this year, space power (600151, sh) issued a bulletin stating that an additional $272 million was proposed for the two power plant projects under the flag. It has been almost a year since the tenth space power proclamation announced investment and recapitalization of the pv project, involving a total of more than 2 billion yuan。
According to the investment community, the photovoltaic industry is built into the loading chain and demand for downstream ground power stations is at an increasing stage。
Behind the outbreak of demand for photovoltaic plants are the two main drivers of policy direction and cost reduction。
According to journalist daily economic news, from july 2013 to april 2014, at least 17 new photovoltaic sector policies were introduced in the country. The uncertainty about future revenues from pv plants has been significantly reduced through targeted policies such as the explicit price subsidy for poles for 20 years, the quarterly payment of subsidy funds on a monthly basis, vat or 50 per cent reduction, and has also stimulated more funds to reach pv stations. In 2013, 11. 3 gw was added to grid-connected photovoltaic power throughout the country, making china the world's largest market for photovoltaic terminals。
In addition to policy push, declining manufacturing chain costs provide a good basis for the formation of a domestic photovoltaic market. According to silver securities, the price of polycrystal silicon dropped from over $400/kg in 2008 to below $20/kg, and will remain at that level in the coming months; the price of the component dropped from $4/wa to about $0. 6/wa。
“after the cost of polycrystal silicon, components, etc. Has fallen, the state begins to subsidize the cost of internet access.” yao yao, a senior analyst of the new energy and power equipment of the national gold securities, told reporters of the daily economic news that “costs have fallen to an affordable level”
A study of swiss silver securities also notes that the cost of the entire photovoltaic chain is declining, with at least two benefits: first, in a policy-driven market context, the level of subsidy needed is decreasing; and second, as costs continue to decline, the cost of photovoltaic power generation is expected to gradually move towards a user-side parity net, or eventually even with conventional energy sources, leading to a shift from policy subsidies to market-driven photovoltaic power。
Earth station capacity is not as high as expected/
At the moment, the profitability and certainty of the construction of the power plant have increased, combined with the recovery factors associated with the 2014 downward price adjustment of the pole, the domestic market for photovoltaic ground power stations has erupted rapidly, and enterprises in the middle of the industrial chain have begun to pile up and invest in downstream power stations. Listed companies such as icst and sino-lisk technologies have become strong representatives of private enterprises that extend downstream。
“as a result of the lower valleys of the last few years, the upper-middle and upper-middle links are relatively capable, and in order to consolidate the demand for downstream products, some upstream and middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-middle-ming enterprises are starting to build power stations.” npd solarbuz, a senior analyst, stated to daily economic news journalist, “in addition, prices have fallen sharply during these years, with low up-middle-middle-middle-middle profits, and their extension to seek more profits.”
Indeed, last year’s light-voltage policy build-up was originally intended to “open downstream markets and thus address upstream overcapacity”, when analysis suggested that downstream power stations could also be circumvented if they were accompanied by feed-in, subsidies, credit, regulation, etc。
“it is true that, in the last two years, the pvc downstream was designed to digest its stocks.” the same view was shared by yao yao, a senior analyst of the new energy and power equipment of the national gold securities. A long-standing practitioner of polycrystal silicon production told journalists that the build-up of domestic photovoltaic plants in recent years had clearly led to the upstream polycrystal silicon market。
“now that the subsidy policy for power stations has also been clear for 20 years, more and more enterprises are recognizing that photovoltaic ground power plants are a business that can stabilize and earn money, whether it be developed or held in operation, and that businesses are happy to do it.” yao has explained。
It also indicates that, by contrast, investment in a photovoltaic power station can yield long-term stable returns of 20 to 25 years, provided policy stability prevails. “photovoltaic power plants are a long-term asset, and as long as there is no problem with funding, there is a steady cash flow for power generation and profits will soon be reflected.”
According to the plan of the department of energy, the total number of additional photovoltaic units nationwide in 2014 was 14gw, of which 6gw for ground station and 8gw for distributed power generation. But the plan seems to be far from satisfying the appetite for pv plants for capital on all roads。
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