Under the background of increasing intensity of steel and coal capacity reduction, China has also begun to watch out for the problem of excess production capacity in the power industry.

"The power generation industry must learn from the lessons of the coal and steel industries, strictly control the scale of investment, and curb the momentum of excessive growth of installed capacity as soon as possible." Qiao Baoping, Party secretary and chairman of China Guodian Corporation, said at the fourth session of the second employees' congress and the 2017 work conference of Guodian Corporation on January 13.

It is reported that Guodian Group completed the investment of 58.2 billion yuan in 2016, strictly controlled within the annual target, in 2017 will control the investment within 44.8 billion yuan.

Strictly control the scale of investment

In recent years, the power market continues to be depressed, the average utilization hours of thermal power equipment in the country have declined year after year, and the problem of overcapacity in the power industry has become increasingly prominent.

The reporter of China Business News noted that Huaneng Group also stressed at the just concluded 2016 work symposium that it would "focus on preventing risks, focusing on capital expenditure control and other aspects to do a good job in deleveraging and preventing risks" in 2017. So far, Huaneng, Huadian, Datang, the state power investment has not yet announced the 2017 investment plan, but in the national level to emphasize the vigilance of the power industry overcapacity in the background, is estimated to "brake" the scale of investment.

At the same time, it is worth noting that the investment structure of the "Big Five" in power supply will also change dramatically. Liu Jinhuan, assistant general manager of Guodian Group, said the company plans to invest 44.8 billion yuan in 2017, of which wind power investment will be more than 20 billion yuan, and thermal power investment is only more than 8 billion yuan.

In fact, Guodian has spent the past few years optimizing its power investment mix and pursuing a strategy of "investing in clean renewable energy and large clean and efficient thermal power units." Official data show that in 2015, Guodian Group's power investment accounted for 81.2% of the total investment, in power investment, clean energy has accounted for 68.4%.

It is understood that in 2016, Guodian Group strengthened investment control, strictly controlled the scale of thermal power investment, resolutely implemented the coal power "three batch" and other policies and measures, suspended or delayed the construction of 10 coal power projects, suspended or delayed the construction of installed capacity of 11.8 million kW. At the same time, Guodian Group also "resolutely quit the small hydropower projects with substandard efficiency" in 2016, and optimized the development of wind power. In 2016, Guodian Group put into operation 3 million kW of wind power projects, and the installed capacity of wind power reached 25.83 million kW, which remained the first in the world.

Through the above strategies, the power structure adjustment of Guodian Group has achieved obvious results, with clean renewable energy accounting for 30.3% and thermal power units of 600,000 kW and above accounting for 50.4%.

The background of Guodian group controlling the investment scale and optimizing the power structure is: the growth rate of electricity generation capacity in China is much faster than that of the whole society; Meanwhile, the utilization hours of thermal power units have fallen to the lowest level in history.

According to the "National Power Supply and Demand Situation Analysis and Forecast Report of China Power Union in the first half of 2016", the newly installed power generation capacity in China in the first half of 2016 reached a new record high in the same period of the previous year. By the end of June 2016, the installed power generation capacity of power plants with 6000 kW and above reached 1.52 billion kW, with a year-on-year growth of 11.3%. The growth rate of electricity consumption has exceeded that of the whole society by 8.6 percentage points. In some areas, excessive growth of installed capacity and excess production capacity have further intensified.

In addition, according to statistics, the average utilization hours of thermal power equipment in China have declined year after year in recent years, to only 4,200 hours in 2016, reaching a new low since 1969.

Optimize the main business of power generation

2017 is not a good year for power generators.

First, "the problem of power overcapacity is becoming increasingly prominent". Especially in the field of coal power, the government has introduced intensive measures such as "three batches" of coal power, risk warning, and the elimination of backward production capacity. Qiao Baoping believes that "due to the inertia of investment, it is expected that the average utilization hours of thermal power equipment will continue to decline in 2017, and the power generation industry must curb the momentum of excessive growth of installed power as soon as possible."

Second, "clean renewable power rationing continues to worsen". In the first three quarters of 2016, the average wind curtailment rate reached 19%. In addition, the "water abandonment" in southwest China is also becoming more and more serious. However, due to the large scale of hydropower construction in the 13th Five-Year Plan, it is expected that the water abandonment problem is difficult to be fundamentally alleviated in the short term.

Third, "the power generation price downward trend is obvious". Since 2013, the benchmark feed-in price of coal power has experienced four times of decline, with a cumulative reduction of 7.44 points, which has had a great impact on the operation of power generation enterprises. Now, the price of new energy has also begun to be lowered, and the country will eliminate subsidies for wind power and photovoltaic power generation by 2020 to achieve parity. For power generation enterprises, it will also face great challenges.

In addition, "coal prices have risen sharply". The Bohai Rim thermal coal index in the last phase of 2016 was 593 yuan/ton, up 222 yuan/ton from the beginning of 2016, up as much as 60%. Although the fundamentals of coal production capacity is greater than demand have not changed, the foundation of coal price rise is not solid, it is expected that in 2017, the coal price will show a high level of stability, a slight decline, which will continue to squeeze the profit space of power generation enterprises.

In this context, Qiao Baoping stressed that Guodian Group's focus in 2017 is to "strengthen and optimize the main business of power generation". The strategy includes strictly controlling the scale of thermal power investment, optimizing the distribution of wind power, prudently promoting the development of hydropower projects, and creating high-quality projects.

In thermal power, guodian group proposed continue to strictly implement the National Energy Administration put forward "existing in electric power, power balance calculates power redundancy provinces, take 'cancel nuclear a batch of a batch, slow or delayed a batch of coal project" policy, and strictly implement the work plan of the orderly development of coal and electricity group company regulation and strict controls of the early stage of the development scale, working rhythm and project construction schedule, Do a good job in the follow-up work of cancelled, delayed verification and delayed construction projects.

In terms of wind power, Guodian Group proposed to continue to optimize the layout and structure, strictly control the development of wind power in the "three north" areas with severe power restrictions, focusing on the central, eastern and southern regions, and offshore development.

In addition, Guodian Group will steadily promote the development of hydropower projects, adhere to diversified development, make solid boundary conditions, and orderly promote the development of the Dadu River trunk stream project.

The overall goal of GuoD Group in 2017 is to complete the power generation of 507 billion KWH, the coal production capacity of 57.4 million tons, the coal consumption of power supply to 307.2 g/KWH, the use of hours and standard coal price to maintain the industry advanced, profit to achieve the assessment target of SASAC, and strive to assess the A-level.

Data show that Guodian Group completed power generation of 505.2 billion KWH in 2016, an increase of 4.4% year on year; Infrastructure production reached 7.87 million kW, and controllable installed capacity reached 142 million kW, an increase of 5% year on year. Heat sales reached 216.36 million gigajoules, a year-on-year increase of 13.7%; Its operating revenue reached 182.8 billion yuan, and its total assets reached 803.1 billion yuan, meeting the 2016 annual target and maintaining growth.