China's PV industry has not made a profit in just four years.
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Unlike the overcapacity caused by the technological cycle and economic cycle in developed countries in Europe and America, China has its own unique “over-resourcesâ€: the State Council or the central ministries and commissions release industrial support policies; local governments play a decisive role in the next process, lobbying Enterprises have settled down, combined with bank credit, implemented preferential measures and initially promised sales channels; in order to occupy the local market, enterprises have to build factories extensively, and the idea of ​​“bigger to abduct the government and banks†is prevailing, resulting in sharp production capacity. expansion.
When the market demand is not clear, China's production capacity often breaks out from the supply side. The solution to simply expand demand is not only costly but also difficult to save the poor. In the case of wind power and photovoltaic industry, the current overcapacity should be resolved. Start with the supply side.
Chinese overcapacity
"China's current overcapacity is not a phenomenon of a single economic cycle."
In 2013, no photovoltaic manufacturing company could make a profit. The research results of the Ministry of Science and Technology in Qinghai are frustrating: some newly-entered enterprises are forced to suspend production when they are too late to put into production. Even if they are strong, they can only sell at a loss without calculating the depreciation of equipment, just to barely maintain cash flow. Does not break.
The situation of wind power equipment enterprises is similar to that of photovoltaics. After more than one year of large-scale shutdown of many bases, the former giant Huarui Wind Power has successively shut down 8 overseas subsidiaries within six months; some production lines of Goldwind Technology have stopped production and maintained production bases. It was reduced to a few days to produce a wind turbine; foreign-funded enterprises have withdrawn from China.
At present, China's new energy companies are facing serious overcapacity.
According to the statistics of China Wind Power Development Report 2012, the capacity of China's major wind power equipment manufacturing industry has reached more than 30 GW in 2012, but the installed capacity of new wind turbines in China was only 18 GW that year. The foreign market has not been effectively opened, which has resulted in 40% of domestic equipment. The above capacity is idle. According to the latest estimates, in the first half of 2013, China's wind power equipment comprehensive capacity idle rate exceeded 60%.
According to data from the Energy Research Institute of the National Development and Reform Commission, China's PV module production capacity reached 45 GW in 2012, while the global production was only 38.4 GW that year. Even if the components were sold out, China's production capacity exceeded the world total demand by nearly 7 GW.
According to Chen Letian, chief macro researcher of Nisshin Securities, China’s general capacity utilization rate is 57.8%, which is about 15% lower than the 72%-74% “consistent rangeâ€. Chen Letian said, “This means that China is currently The overcapacity is very serious."
Shen Jianguang, a columnist for the Financial Times Chinese website in the United Kingdom, said, "China's current overcapacity is not a phenomenon of a single economic cycle."
Unlike developed countries in Europe and the United States, which are caused by technological cycles and economic cycles, China has followed its own set of excess logic. Guided by the industrial support policies of the central ministries and commissions, local governments have formulated preferential policies and set thresholds, and enterprises have been forced or voluntarily to expand their production capacity.
The temptation of "resources for industry"
The local Zhenbei cashmere, which has already settled in the local area, is under the lobbying of the local government and has started the PV module industry that has nothing to do with the main business.
In this process, local governments played a decisive role.
The British research institute Solar media Wang Chao recalled the local government's ability to create capacity. In 2009, Solar Media invited the planning of the PV industry park in Huzhou City, Zhejiang Province. The government officials found local people who are engaged in small commodities, textiles, etc., and lobbied them. Invest in the photovoltaic industry.
In the process, the Zhenbei Cashmere, which has already settled in the local area, switched to PV modules that had nothing to do with its main business. In May 2009, Zhejiang Besun Photovoltaic was established.
It is understood that there are a lot of companies that switch to Beyond PV to make new energy. These companies used to be laymen, in order to make quick money.
“Leasing a factory. You can start production when you buy a production line. When the market is good, you can recover the cost in one year.†The person in charge of the Beijing Certification Center said that “in-depth research and development, occupying the technical commanding heights, is easy. China’s low-end production capacity is often excess."
However, local governments do not always smile at each other. They are affected by local GDP, fiscal revenue, employment and other assessment indicators. It is difficult for companies that do not settle in the local area to achieve sales.
Taking Jiangsu Province as an example, in addition to the Longyuan Electric Power Intertidal Zone Test Wind Farm (using wind turbines of 9 enterprises), wind turbines installed in coastal areas of the province such as Huarui Wind Power, Goldwind Technology, Shanghai Electric, etc. All invested in Yancheng or Dafeng City. Longyuan Power, a local wind power developer, has repeatedly received “strips†from local governments. The Yancheng Development and Reform Commission of Jiangsu Province has deliberately issued documents to wind power developers, hoping that they will give priority to the purchase of Huarui Wind Power units.
The protectionism of local governments has clearly broken the strategic layout of Sinovel.
According to the statistics of the Jiangsu Local Taxation Bureau, as of June 2011, Huarui Wind Power has invested a total of 6 billion yuan in Yancheng. According to Huarui Wind Power Statistics, the first phase of the project completed in 2009 can reach 1,000 units of 1.5 MW per year. Production capacity of a 3 MW, small batch 5 MW wind turbine. It is enough for all wind power installed capacity in Jiangsu Province.
However, since the completion of the plant, affected by changes in market supply and demand, the construction of Huarui Wind Power Yancheng Base has been scattered, and the second phase of the project has not even been put into use. In the local area, Goldwind Technology and Shanghai are also encountered in the same way. Electrical and other complete machine manufacturers.
Not only Yancheng, but not wind power, since the release of the new energy signal in 2008, more than 100 city and county governments have announced the construction of new energy industrial parks.
“Local protectionism uses the 'resource for industry' temptation, companies have to build factories everywhere to obtain local wind energy resources, and then use resources to change orders.†Senior wind power expert, former Longyuan Power Chief Engineer Yang Xiaosheng said, “by The resulting expansion is irrational and has considerable blindness, resulting in unfair competition and distorting the market."
Simply "expanding demand" is a hidden danger
With the rapid increase in installed capacity, renewable energy subsidies have been stretched.
Under the combination of national industrial policy guidance and local government, the bank's credit direction is tilted.
“If the company is not proficient in the loan, the bank will hand over the skills.†A person in charge of the wind power equipment manufacturer said, “The vast majority of the company’s funds are borrowed.â€
Not only the new energy industry, but also the capacity expansion of the shipbuilding, flat glass, steel, cement and other industries cannot be separated from the bank's credit expansion.
The chief financial officer of a wind power giant said: "The more money you borrow, the less banks and governments will dare to let you go bankrupt."
It is understood that the wind power company's bank debt amounted to several billion yuan, not only do not have to pay back the money, but also repeatedly the bank's extension of the loan renewal policy, the condition is only "first interest."
"At least not in my office, don't let the company go bankrupt." The person in charge of the finance quoted a bank as the deputy governor.
Following this unique logic, local governments, banks, and companies have combined to produce a Chinese-style reincarnation with overcapacity.
How to save China's "scenery" problem, the most extensive way of redemption is focused on "expanding demand", but this method does not seem to work.
Taking wind power as an example, enterprises have gradually lost the power to expand installed capacity and production equipment.
"Even if the wind farm is approved in the Sanbei area, I will not install the fan, which is obviously at a loss." Yang said. Longyuan Power is the first wind power development company in China and the second in the world.
“Three North†is the best area for China's wind resources, but it is subject to severe wind curtailment and wind farms in the region are generally losing money.
However, although the problem of power cuts in the south has eased, due to its poor wind resources, high land acquisition cost and limited scale, the construction cost remains high. Except for Longyuan Power, it is said that its low-speed wind farm can achieve meager profits. No company dares to guarantee profit.
For wind power equipment manufacturers, as the unit price has dropped from 6,000 yuan/kW in 2007 to the current 3,000 yuan/kW, most of the tributary companies such as Guodian United Power are losing money.
More seriously, with the rapid increase in installed capacity, renewable energy subsidies have been stretched.
Liu Lei, deputy general manager of Huadian Fuxin Energy Co., Ltd. said: "The state owes me more than 900 million yuan in subsidies." Yang Dong, chief engineer of Guodian Key, said, "Guodian Group's receivables accounted for nearly 10 billion yuan." According to Wang Yongqian, as of now, the arrears of renewable energy subsidies totaled more than 23 billion yuan. “The gap in renewable energy is likely to grow.â€
Even if there is no such problem, simply expanding the demand may not be effective. Whether it is photovoltaic or wind power, its production capacity in China has exceeded the current global demand.
Chen Letian believes that to resolve the current overcapacity, it should start from the supply side. On the one hand, through industrial transfer, the excess capacity will be transferred to countries with lower development stages, such as Vietnam, Cambodia, Africa, etc.; on the other hand, resources, energy, environmental standards will be set, and a number of backward production capacity will be eliminated; Enterprise mergers and acquisitions to improve the overall quality of production capacity.