Earlier on 16 July, SHG issued a tender announcement for its 50MW Concentrated Solar Power (CSP) project in TaiYangShan development area of Ningxia province.
GuoHua Electric Power(GHEP), a wholly-owned subsidiary of ShenHua Group Co. Ltd., (SHG) is now working intensively to layout its 2015~2030 solar-thermal power generation market. The concrete plan has been proposed: 1.5 GW in 2015~2020, 3.5GW in 2020~2025, 6GW in 2025~2030.
Even for the powerful state-owned energy firms, this program also appears grand. It is learned that this June, GHEP established an office to specially manage issues regarding this program and make site selection plans for CSP projects nationwide. Currently, GHEP’s primary goal is to close the plan of 1.5GW installed capacity scheduled to be completed by 2020, and submit the plan to ShG high level for examination and approval by the end of this year. If the plan is approved, SHG will be to date the first state-owned energy firm with the most scheduled CSP projects.
Earlier on 16 July, SHG issued a tender announcement for its 50MW CSP project in TaiYangShan development area of Ningxia province. This is a 1×50MW power generation unit, heat storage facilities will be synchronous installed, and space for 1×50MW+1×100MW units are kept for expansion. The project is expected to go into operation in June 2017. And this is GHEP’s first CSP project, molten salt tower technology is proposed. And in the future, more similar projects will fall to the ground.
With SHG’s absolute leading position in coal industry, GHEP is the most profitable among the “five big power groups and four small giants” state power companies. Take 2014 for example, GEP achieved a total profit of 17.8 billion yuan and 184 billion KWh power generation, and comparatively, all “five big power groups” achieved an annual revenue of above 180 billion, among which the most profitable is China HuaNeng Group- 289.7billion yuan in total, 26.8 billion of net profit. Another four of the five: China DaTang Corp.-188.963b(14.08b of net), China HuaDian Corp -215.7b(20.5b of net), China GuoDian Corp.-215.4b(19.5b of net), and State Power Investment Corp.-182.3b(10.07b of net). With a profit margin of about 26%, GHEP won the champion title.
GHEP’s such high profit largely thanks to SHG’s advantage of coal-electricity integration. SHG is titled as “king of coal industry” with its abundant coal resources, its own railways and ports, which contribute much to GHEP’s power plant layout strategy in point &line & plane dimensions and layout of pithead & intersection (railway) & portuale power plant, resulting in a great cost saving. In addition, most of GHEP’s pithead-based power plant is middling or inferior coal fired, which minimizes the fuel costs and improves the profitability of power plant. Intersection and port -based power plants are fired by washed coal with a lower market price and large efficient environmental protection units are installed meanwhile, which can ensure the competiveness of the plants. As a new power generation company, GHEP adopts the latest technology for its power plants over that period, and the five major powers all have inferior power plant assets in varying degrees. For example in 2013, GHEP’s earned a profit of 8.8 cent per KWh, which is far higher than the five major powers’ 2 cent or so profitability.
But high profit margins could not hide GHEP’s weakness in renewable energy field. That means several other big power companies had previously initiated their business layout in wind power and solar power field, while GHEP lagged behind. Early in 2104, the five major powers all installed 30 million KW or more, with a growing share of total power from 34.19% in 2013 to 38.47% in 2014. And other big power companies’ share in clean energy reached more than 25% in 2014, while GHEP focuses more on clean utilization of coal, energy conservation &emission reduction and green fossil fuel , which led to obviously far-behind in renewable energy development. But GHEP is aware that lag fails to suit for the long term development of renewable power market, which is not benefit to the company’s long-term development.
With the overall decline of traditional fossil-fired power market in the present and the future, GHEP is eager to seek new green growth. And with its huge wealth and rich technical experience accumulated trough conventional thermal power business, GHEP’s best choice is to focus on the current situation of new energy market to develop CSP projects, whose back-end process is the same as that of fossil-fired power technology. Now, traditional wind power and PV market have been basically mature, and heavily entering is difficult due to lack of pioneering advantages. But CSP generation is gaining momentum. As a capital intensive technology, CSP field allows GHEP’s entering with its abundant capital strength.
Recently, GHEP did relentless survey and site selections in various domestic regions with high solar resource. It realized that CSP business is expected to usher in explosive growth soon. In this crucial point, GHEP must take time to grasp more resources to hold the business opportunity. And fortunately, the political context is sound for such development. After LiuQi’s (deputy at the National Energy Administration) attending Qinghai CSP symposium on this 30 July, launching 1GW demonstration CSP projects y the end of this year becomes a much more real signal, figging up the whole CSP field.