How long does China's wind power industry experience winter?

In 2012, China’s wind power industry has fallen into a loss in the entire industry, with a sharp increase in the rate of abandoned winds, a decline in the macro economy, and a lack of corporate outreach. How long will it take for this cold winter in China's wind power industry?

A source of Longyuan Power Group pointed out that it will take 2-3 years for wind power to “turn over”. This view has been recognized by many senior people in the wind power industry.

Electricity restriction

In 2011, the wind turbines in operation in China stopped for 19 hours a day and the wind was blown away at a rate of 100 billion kWh, with losses exceeding 5 billion yuan. In 2012, the Chinese wind power exchanges were even worse. “In 2012, the rate of wind power cut did not fall, but Inner Mongolia generally reached 50%. The Mengdong Hulunbeier trial of “Windfire Trading” has created an unprecedented 80% record.” Qin Haiyan, Secretary General of the China Wind Energy Association, said: “These data are not It happened at a certain time, but it was normal.” This also means that the electricity curtailment rate in the Inner Mongolia Autonomous Region has more than doubled from last year.

The direct consequence of power curtailment is the shrinking income of wind power developers. Datang Renewable Energy had a loss of 8.56 million yuan in the first three quarters, compared with a net profit of 386 million yuan in the same period of last year. Huaneng New Energy's net profit for the first half fell by more than 50% year-on-year. Under the influence of the decline in developer profits, the days of equipment manufacturers seem to be described as "dirty". In the third quarter, the old leader Huarui Wind Power suffered a loss of 280 million yuan; Goldwind lost only 3,000 million yuan, but this was after the transfer of its subsidiary companies such as Shangdu Tianrun, Tianhe Blade and Xi'an Goldwind; ranking first in the world. One Vestas suffered even more losses. The total losses in the first three quarters reached 345 million euros.

According to Liu Qi, deputy general manager of Shanghai Electric Wind Power Equipment Co., Ltd.: “At the moment, none of the top ten manufacturers of complete machines is not the strength day.”

Inside and outside attack

The grid-connected regions are all similar, and each area with power restrictions has its own limitations.

In Xinjiang, Gansu, Inner Mongolia and other provinces, the installed capacity of power generation does not match the local electricity consumption. Take Inner Mongolia as an example. Last year, the Inner Mongolia Autonomous Region generated 297 billion kilowatt-hours of electricity and the largest load was only 21 million kilowatts, making China the richest province in terms of electricity generation.

The power transmission routes in the three provinces are very scarce. In Gansu, there is only one newly built Jiuquan-Lanzhou 750 kV line in Gansu, and the UHP in Xinjiang-Hami-Zhengzhou has just started. Inner Mongolia has not approved the addition of an additional power transmission line for seven years.

In the “three north” wind belts of Heihe, Jilin and Liao, “a mountain cannot accommodate two tigers” for wind power and thermal power. As China adopts a planned power model, it prescribes how much power each power plant generates, and the thermal power indicators are not used. After the end, the wind power must give way. Once the winter heating period is reached, the contradiction between wind power and cogeneration units is even more acute.

The human limitation of electricity restriction began in 2011 when the large-scale wind power off of Jiuquan, Gansu Province was blamed. The main cause of the accident was attributed to the fact that the wind turbines did not have low-voltage ride-through capability, and wind farms that were not tested by the State Grid Power Research Institute were often restricted to generate electricity. .

Zhang Fusheng, general manager of Inner Mongolia Electric Power Co., Ltd. once said that the practice of running the power grid in Mengxi has proved that there is no technical problem in eliminating more than 20% of the power grid, and the main reason for power cuts is that the interests of all parties are difficult to balance.

Another important factor causing losses for wind power developers is often overlooked, but the total amount of developer profits it occupies is nearly half.

Beijing Zhongchuang Carbon Investment Technology Company statistics, so far, CDM brings nearly 10 billion yuan in revenue to China's wind power industry. However, the international carbon emissions trading market price fell from the highest of nearly 30 euros per ton to less than 1 euro per ton. "The market is constantly falling", according to Guo Wei, deputy general manager of CCDC, it is pork that sells cabbage.

Contributing to a sharp decline in CDM revenues In addition to the international market factors, the developer’s full authority to commission intermediary operations has accelerated this process. If Huaneng New Energy only has one person responsible for carbon trading, it is difficult to maintain its own legitimate rights and interests after the contract is breached. Huaneng New Energy handled the relevant responsible person for this purpose.

"In the short term, carbon asset prices will still fall," said Wang Wei, general manager of Longyuan Power Carbon Assets.

One leaf knows the autumn, causing the downturn in the wind power industry to have a deeper background is a sharp turnaround in the world economy. Chen Hao, deputy general manager of Sinoma Technology, said at the Beijing Wind Energy Conference in 2012 that there was less water in the “Great Pond” and the wind power capital chain would not work well.

Wind power developers are forced to reduce the scale of construction and delay payment, directly dragging equipment manufacturers and parts suppliers. Hou Youhua, deputy director of Inner Mongolia Electric Power Corporation's ICT Center, said that it is not a good time to develop wind power on a large scale.

Breakout fatigue

Wind power companies can only make instinctive responses to find money and stop layoffs.

In the middle of this year, Huaneng New Energy issued a debt of RMB 2 billion***. On December 13, Longyuan Power abandoned allotment and raised funds to raise USD 358 million. On October 29, Datang New Energy issued short-term bonds* * 2 billion yuan.

Goldwind continued to sell its shares in the subsidiary; Sany Electric shut down its wind power base in Zhangjiakou, laid off more than 50% of its workforce, and its core personnel transferred to its parent company, the Sany Group; while Sinovel Wind Power, in addition to laying off its employees, retired its investment in the Cultural Building. Some office buildings, the construction of Bijie, Guizhou, and Hami, Xinjiang, have stagnated; Vestas has transferred factories worldwide and laid off thousands of people.

In addition, the phenomenon of mutual equity participation and the binding of developers is prevalent in the equipment manufacturing industry, such as Goldwind and Three Gorges New Energy, United Power and Longyuan Power, Mingyang Wind Power and Huadian New Energy. Under such circumstances, parts suppliers are busy collecting debts.

In order to promote the integration of wind power, the National Energy Administration issued successive documents to try to open up new space for development. Low wind speeds, offshore and high-altitude wind power are on the agenda. The Mengxi Wind Power Pilot Project, which began at the end of last year, focused on local consumption. These pilot projects include wind power direct-fired power generation, wind power heating, thermal power generation for wind power peaking and grid-connected operation management. Due to the existence of high costs and difficulties in promoting a wide range of issues, the effectiveness of the policy remains to be seen.

China's wind power industry is currently showing little effect in breaking through. Industry insiders predict that the fourth quarter earnings of listed companies will become even more ugly.

Qin Haiyan, secretary-general of the China Wind Energy Association, said that if the system, policies, and interest adjustments are bypassed, the ratio of wind power to the grid will be difficult to increase.

Although the State Grid indicated that it will support the development of new energy sources, the “AC ultra-high voltage large-scale deployment of wind power” measures launched by the State Grid Corporation has been questioned. Many experts from the former State Development Planning Commission's fuel and power bureau, Jiang Zhaozu, and others have repeatedly written letters to negate this proposal from the perspectives of safety, cost, land price, and technology.