华金证券:风电下乡政策加码 投资逻辑已从周期属性向成长属性改变

Huajin Securities: The logic of increasing investment in the rural wind power policy has changed from cyclical to growth

Zhitong Finance ·  Apr 3 03:02

The decentralized wind power market has great potential to effectively support future installations.

The Zhitong Finance App learned that Huajin Securities released a research report saying that the investment logic of wind power has changed from a cyclical nature to a growth attribute. The issuance of the official document of the “Thousand Villages and Thousand Villages Wind Management Plan” is in line with the national rural revitalization strategy, showing the top-level attitude of developing distributed new energy sources. Decentralized wind power is expected to replicate the growth path of distributed photovoltaics to a certain extent and further open up space for wind power growth. It is recommended to focus on wind power parts companies with high market share and good cost control, and machine leaders with strong supply chain management and control capabilities.

Recommended attention: Jinlei Co., Ltd. (300443.SZ), Tongyu Heavy Industries (300185.SZ), Sun Moon (603218.SH), Tianshun Wind Energy (002531.SZ), etc.; in addition, considering the 35KV and 110KV voltage levels of distributed wind power, it is recommended to focus on the subsectors of transformer leading transformers Jinpan Technology (688676.SH) and Mingyang Electric (301291.SZ).

Incident: On April 1, the National Development and Reform Commission, the National Energy Administration, and the Ministry of Agriculture and Rural Affairs issued the “Notice on Organizing and Carrying Out the “Thousand Towns and Thousand Villages Campaign”

The policy was implemented, and a breakthrough was made in decentralized wind power.

In terms of policy, the industry proposed an industry initiative for wind power to go to the countryside in 2021, but the support policy has been slow to be officially implemented. Among them, issues such as low project granularity, insufficient attractiveness, complicated approval processes, and difficulties in connecting to the grid are the main factors limiting the development of decentralized wind power. This time, the “Notice” is more pragmatic. It not only clarifies the specific scale (no more than 20 megawatts per administrative village), but also focuses on breaking the institutional constraints that have hindered the development of decentralized wind power, including:

1) Approval mechanism: The notice requires all regions to explore and test the filing system for the “Thousand Villages and Thousand Villages” wind power projects, to provide a “one-stop” service in conjunction with actual practice, and to unify preliminary procedures for projects jointly developed by the same administrative village or nearby village. For projects that do not involve sensitive areas such as soil and water conservation, environmental protection, vegetation restoration, and mineral compaction, etc., investors, together with village groups, issue commitments, and relevant authorities issue supporting opinions, so that relevant formalities can be expedited in accordance with the law.

2) Land issues: The notice indicates that land that does not occupy pressure on cultivated land, does not change surface morphology, and does not change land use will be explored through leasing, etc. Where it is really necessary to occupy cultivated land, land use procedures shall be carried out according to law and regulations. Encourage the promotion and use of land saving techniques and land saving models that cover a small area, do not change the surface shape, and do not damage the cultivated layer, so as to save the intensive use of land.

3) Consumption issues: Wind power projects in rural areas are covered by grid companies, mainly for local consumption nearby. Feed-in tariffs are implemented in accordance with the new energy feed-in tariff policy in the year they were connected to the grid. Of course, participation in market-based transactions is also encouraged. Electricity participating in market transactions does not participate in ancillary service cost sharing.

Furthermore, the “Notice” states that by the end of December every year, provincial energy authorities will report the implementation status of the “Thousand Villages to Control the Wind” to the National Energy Administration and the Ministry of Agriculture and Rural Affairs, copy the relevant National Energy Administration agencies, and copy specific projects to the National Renewable Energy Information Management Center to set up a file card.

The decentralized wind power market has great potential to effectively support future installations.

According to estimates by the Wind Energy Association, there are 690,000 administrative villages across the country. If 100,000 villages can find 200 square meters of scattered land such as fields and the front and back of the village to install 2 5MW wind turbines, the whole country can install 1,000 GW of wind power. At the Beijing International Wind Energy Conference in October '21, 118 cities and more than 600 wind power companies jointly launched the Wind Power Partnership Campaign · Zero Carbon Cities and Fumei Village Plan, which proposed installing 10,000 fans in 5,000 villages in 100 counties across the country during the “14th Five-Year Plan” period, with a total installed capacity of 50 GW. According to CWEA statistics, by the end of 2022, China's distributed wind power had a cumulative installed capacity of 13.44 million kilowatts, an increase of 34.9% over the previous year. Although there has been an increase in recent years, the share is still very small. As policies gradually increase, I am optimistic that the potential of decentralized wind power will be released. The bank maintains its previous industry judgment. The three major requirements of “large-scale wind power base+wind power going to the countryside + renovation of old fans” will effectively support the installation of onshore wind power.

Reduced machine costs+implementation of distribution grid policies to support the development of the industry.

In recent years, the sharp drop in wind power costs and technological innovation have effectively solved the problem of wind power costs and resource development thresholds. Currently, the cost of decentralized wind power in the south-east region has exceeded 5 yuan/w. According to 2200-2500H of power generation hours, the electricity price of 0.4 yuan/kwh is impressive; in addition, technological innovation in high tower fans and large impeller fans has basically achieved full coverage of wind power development. Furthermore, the “Guiding Opinions on the High-Quality Development of Distribution Grids under the New Situation” was recently issued, making it clear that “by 2025, the carrying capacity and flexibility of distribution networks will be significantly increased, with about 500 million kilowatts of distributed new energy.” The “Notice” indicates that wind power projects to the countryside implement guaranteed grid connection, mainly for local consumption nearby, and feed-in tariffs are implemented in accordance with the new energy feed-in tariff policy of the year when connected to the grid.

Risk warning: Policy implementation falls short of expectations; raw material costs have risen sharply; industry competition has intensified.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
    Write a comment