Restructuring of thermal power industry is an impo

2022-09-26
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Thermal power: industry restructuring is an important way to reduce production capacity

the coal and power sector is expected to carry out supply side reform through restructuring and integration. Premier Li Keqiang proposed in the government work report, The profit before interest and tax (excluding special projects) in 2017 was 1.331 billion euros. "We should eliminate, suspend and delay the construction of coal-fired power production capacity of more than 50million kW, in order to prevent and resolve the risk of overcapacity in coal-fired power and improve the efficiency of the coal-fired power industry. On March 6, Ning Jizhe, deputy director of the national development and Reform Commission, pointed out that coal-fired power will adopt a variety of ways to reduce production capacity this year, including elimination, reorganization, transformation and so on. Zhang Xiwu, deputy director of the SASAC, said that we should adhere to" one mature household, one reorganization " Promote the reorganization of central enterprises and focus on key areas to "accelerate the reorganization and integration of coal and electricity industry, heavy manufacturing equipment industry, steel industry and other fields, and promote the solution of the problem of overcapacity". We believe that mergers and acquisitions are an important means of coal power supply side reform, and the coal power industry is expected to usher in major changes

the number of central enterprises in the power industry is the largest, and there is much room for industry concentration to improve. Among the 102 central enterprises, there are 12 energy enterprises with power generation business. Compared with the number of five central enterprises of steel, two of coal and one of cement, the number of central enterprises in the power industry is the largest, including the five major power generation groups, Shenhua Group, China Resources Group, state investment group, Three Gorges group, China nuclear industry group, China Guangdong Nuclear Power Group and China energy conservation and environmental protection group. There is much room to improve the industrial concentration

the centralized bidding of power reform reveals vicious competition, and there are competitive risks in overseas market development, which promotes industry integration. The clearing price of Guangdong Province's centralized power bidding in February was -189.45% kwh, with a record high price difference. Loose supply leads to vicious bidding, and power generation enterprises try to strive for more market share by means of low price, sacrificing the profit data of the income statement, in order to obtain the net cash inflow brought by marginal income. With the improvement of the domestic green packaging standard system in the express industry and the strict control of new installed capacity, and the promotion of the overseas the Belt and Road policy, the trend of power central enterprises going abroad to acquire or develop projects is becoming more and more obvious. Avoiding vicious bidding and overseas project competition has become another thrust to improve the concentration of central enterprises

referring to the successful cases of the reorganization of state-owned enterprises, we suspect that the reorganization of coal and electricity may be divided into three possibilities: "merger and reorganization between central enterprises", "coal and electricity marriage" and "central enterprises merging local state-owned enterprises". 1) Referring to the merger of Baosteel and WISCO and the merger of CSR and CNR, we believe that in order to improve industrial concentration and strong horizontal integration, there is also the possibility of horizontal integration among the five power groups. 2) In order to give full play to the complementary advantages of the industrial chain, with reference to the vertical restructuring and integration of China Power Investment and national nuclear power, with the improvement of the profitability of coal enterprises under domestic and foreign troubles, there is also the possibility of cross shareholding, merger and reorganization of both sides in the upstream and downstream of power and coal. 3) Referring to the Three Gorges group's capital increase and holding of Hubei energy, and the state investment power strategy's shareholding in Ganneng, we believe that the way in which central power enterprises hold shares in local power enterprises and the slow progress in the solid will also become a feasible way for the reorganization of state-owned enterprises. Eliminating backward production capacity through mergers and acquisitions and improving industry concentration will also become an important way of supply side reform

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