The Group has proactively invested in the development of clean energy, optimized our asset structure and accelerated our strategic transformation. During the year, not only have we acquired various clean energy projects, but we have also disposed of our equity interest in certain of our coal-fired power businesses, thereby promoting further increase in the proportion of the installed capacity of our clean energy and its profit contribution. Energy storage and environmental power businesses became the new profit drivers of the Group. Our thermal power segment recorded a year-on-year decrease in losses as compared with the previous year. However, it remained in a loss-making position amid high level of coal prices, therefore dragging down the overall financial performance of the Group.
In 2022, the Group stepped up the pace of implementing its strategies by swiftly increasing the proportion of clean energy asset in our power generation portfolio, and expanding the business scope of the Group. The Company acquired a total of 23 clean energy project companies from CPNE and CPINE, which are both indirect subsidiaries of SPIC, the ultimate controlling shareholder of the Company. All of the acquisitions have been completed during the year. Such companies have installed capacities of wind power, photovoltaic power and environmental power of 1,550.0MW, 408.4MW and 197.0MW, respectively. During the year under review, these companies contributed a net profit of RMB70,807,000 in aggregate after being consolidated into the financial statements of the Group.
For the year ended 31 December 2022, the profit attributable to equity holders of the Company amounted to RMB2,648,051,000 (2021 (restated): loss of RMB256,257,000). Profit attributable to ordinary shareholders of the Company amounted to RMB2,480,840,000 (2021 (restated): loss of RMB390,507,000). Basic earnings per share was approximately RMB0.22 (2021 (restated): loss of RMB0.04). As at 31 December 2022, net assets per share (excluding non-controlling interests and other equity instruments) was approximately RMB3.10.
During the year under review, the development and performance of the Group’s principal businesses were as follows:
Installed Capacity
As at 31 December 2022, the consolidated installed capacity of the Group’s power plants was 31,599.2MW, representing a year-on-year increase of 2,667.3MW. Among which, the consolidated installed capacity of clean energy including hydropower, wind power, photovoltaic power, natural gas power and environmental power was 20,519.2MW in total, accounting for approximately 64.94% of the total consolidated installed capacity and representing an increase of 12.78 percentage points as compared with the previous year.
During the year under review, the Company successfully completed the acquisition of 23 clean energy project companies from CPNE and CPINE, among which an aggregate installed capacity of 2,155.4MW were in operation, which increased the proportion of clean energy of the Group significantly.
During the year, the Group also successfully implemented the joint operations between coal and power enterprises through the disposal of part of its controlling interests in two coal-fired power subsidiaries to China Coal Power, thereby reducing the consolidated installed capacity of coal-fired power by 4,760.0MW in total. This further adjusted the asset structure of our existing power generation portfolio, and will hopefully overhaul the long-term loss-making situation of the Group’s coal-fired power assets, significantly improve the Group’s financial performance, and pave an important step for the gradual and orderly withdrawal from the less efficient coal-fired power generation business.
The details of consolidated installed capacity of the Group as at 31 December 2022 are set out as follows:
The Group’s power generating units that commenced commercial operation and those that were acquired during the year are presented by type as follows:
Technological Innovations
In light of the “New Industries, New Business Forms and New Business Models” (the “Three-New”) of the energy sector, we highly emphasize technological innovation capabilities. In order to strengthen and enhance our first-mover advantages in the Three-New segment, we have constantly enhanced our technological innovation capabilities, focused on innovation of key techniques, accumulation of intellectual property rights and introduction and nurturing of key personnel, whilst accelerating the incubation of new business forms and new business models, thereby initiating a new phase of strategic transformation and leapfrog development.
Energy Storage
During the year, the Company formed a strong alliance with Snowsky Salt Industry Group Co., Ltd.*, a leading company in the salt and chemical industry, and intended to introduce the pioneer team for salt-cavern compressed air energy storage technology from Tsinghua University to jointly develop the first compressed air energy storage project in Hunan Province. The project is expected to become the first 100MW-level salt-cavern compressed air energy storage project in the PRC, marking the Company’s major breakthrough in the innovative application of new energy storage and its entry into the long-duration energy storage (LDES) sector officially.
Colored Photovoltaic
Xinyuan Jinwu is a high-tech company with photovoltaic color micro-coating technology and product development capability. During the year under review, Xinyuan Jinwu promoted the orderly development of its photovoltaic colorization business and reuse of decommissioned photovoltaic modules. It has also completed the process design of production lines and ordering of core equipment for the Beijing Tongzhou Demonstration Project. Xinyuan Jinwu owns a number of patents and has seized first-mover advantages in the industry.
Green Power Transportation
Qiyuanxin Power continued its leading position in the green power transportation industry and won the Gold Award for Smart Transportation (智慧交通金獎) from the Energy Working Group of Asia-Pacific Economic Cooperation. During the year, Qiyuanxin Power jointly designed and developed the first 3,000-tonnes inland river pure-electric container vessel in the PRC with renowned academic institutions and enterprises. The successful launch of the vessel signified that the first inland river high-quality “Zero-Carbon Demonstration Route (零碳示範航線)” in the PRC has officially commenced operation. During the year under review, Qiyuanxin Power successfully completed Series A Financing of RMB1 billion and will continue to maintain strong momentum of development in the green power transportation sector going forward. It will further consolidate upstream and downstream resources in the industrial chain, and promote the battery-swap business ecosystem throughout the country while continuously spearheading the development of the industry.
Energy Solutions Technology
In line with the low-carbon development direction of the Company’s strategy, the Group is currently exploring ways to promote the expansion of presence in sectors such as Photovoltaic, Energy Storage, Direct Current and Flexibility (PEDF) (a novel building energy system solution that integrates photovoltaic power, energy storage and power distribution), intrinsic material safety of energy storage, urban redevelopment and integrated clean energy solutions.
Status of Key Projects
In light of the Dual Carbon Goals of the State, the transformation of the power industry towards clean energy in its entirety is an inevitable trend. Following the latest round of revolution, consolidation and development of technology and the industrial chain, new industries and modes of energy usage, such as big data, cloud computing, energy storage technology and smart energy have been emerging, and integration of areas such as smart energy and energy storage shall become the new driver of energy revolution.
Offshore Wind Power Projects
In 2022, the Development and Reform Commission of Guangxi Zhuang Autonomous Region issued the “Notice on Competitive Allocations to Investors of Offshore Wind Power Demonstration Projects in Guangxi” (《廣西海上風電示範項目投資主體競爭性配置公告》), which involved two offshore wind power demonstration projects with a total planned installed capacity of 2,700MW. Through the relentless efforts of the Group, the consortium led and controlled by Guangxi Company successfully emerged from the nine investment entities who participated in the competitive allocation and won the bid for the Qinzhou 900MW Offshore Wind Power Project. The project accounted for one-third of the total capacity under competitive allocation in Guangxi Zhuang Autonomous Region. It was groundbreaking progress of the Group in the development of offshore wind power in Guangxi Zhuang Autonomous Region, and has laid a solid foundation for the Group’s future development in this area.
“Photovoltaic+” Project
In 2022, Guyuan County Guangcheng Photovoltaic Power Generation Company Limited*, a subsidiary of the Company, launched the Guyuan County 400MW “Photovoltaic+” Demonstration Project as the Group’s first project in Hebei Province, which achieved full capacity power grid connection. The project not only contributes to the profitability of the Group and lowers carbon emissions, but also provides reliable power supply for economic development in the local region, and promotes the development of local industries. Therefore, it has significant economic and social benefits. Furthermore, the project utilizes land beneath the photovoltaic modules for farming, thereby achieving effective utilization of land resources and improving ecological environment on the one hand, while protecting photovoltaic power generation equipment from sandstorm on the other hand.
Integrated Wind-photovoltaic Hybrid Project
In 2022, the 20MW Offshore Wind Farm and Deep-sea Floating 500kW Photovoltaic Demonstration Project of Shandong Company successfully commenced power generation, which is the first deep-sea “wind-photovoltaic hybrid” floating photovoltaic demonstration project in the world. As the first integrated wind-photovoltaic hybrid project endorsed by Shandong Province as a key project, the project realized simultaneous wind and photovoltaic hybrid power generation, which lowered construction costs and operational and maintenance costs. Shandong Company will continue to proactively and steadily promote the local region, while incorporating offshore wind power planning and construction to create a new development mode for integrated wind-photovoltaic hybrid, gradually expanding the construction scale of floating offshore photovoltaic power generation projects, and pushing forward its development towards the deep-sea area.
Multi-energy Complementary New Energy Power Generation Project
Phase 1 of the Multi-energy Complementary 1,000,000kW New Energy Base Project (400MW) in Macheng City, Hubei Province, the PRC achieved full capacity power grid connection during the year, which accelerated the transformation of the Company into a “World-class Green and Low-carbon Energy Provider”. The Group will continue to leverage its advantages in the clean energy industry in Hubei Province to establish a new facet of green and low carbon development of the industry, push forward commencement of high-standard construction of phase II and phase III of the project and achieve the target of full capacity power grid connection of clean energy base projects as soon as possible, thereby facilitating rural revitalization by contributing more green and low-carbon clean energy to the transformation of old districts so as to accelerate achievement of the Dual Carbon Goals of the State.
Energy Storage Projects
During the year under review, Xinyuan Smart Storage expanded its presence in various places and launched projects with a capacity of over 1,500MWh. Among them, the Shandong Jining Weishan 100MW/200MWh Peak-shaving Energy Storage Power Station Demonstration Project (“Shandong Weishan Energy Storage Project”) and Qinghai Golmud 100MW/200MWh Energy Storage Sharing Power Station Demonstration Project (“Qinghai Golmud Energy Storage Project”), both being constructed by Xinyuan Smart Storage, were successfully connected to the power grid. By integrating a broad range of advanced energy storage technologies from the PRC and abroad, the Shandong Weishan Energy Storage Project has achieved new breakthroughs in aspects such as energy management and battery system, which may effectively optimize the allocation of regional power resources and thus mitigate the pressure on peak-shaving of the regional power grid. On the other hand, the Qinghai Golmud Energy Storage Project has demonstrated the safety and reliability of the energy storage systems under harsh natural environment such as high altitude (3,200 meters) and extreme temperature differences (-30°C~35°C). The project adopted intelligent temperature control system and advanced system integration technology to ensure high degree of safety, long operating life and high performance of the energy storage power stations. Upon commencement of operation, the project will be able to realize dispatching and trading of new energy through integrated station hubs and power stations, thereby facilitating the establishment of a new power system in Golmud, Qinghai Province, the PRC.
Projects under Construction
As at 31 December 2022, the consolidated installed capacity of the projects under construction was 7,592.4MW, all of which were clean energy projects (excluding clean energy projects of which the acquisitions have not yet been completed during the year).
While the pandemic situation remained volatile during the year, the Group effectively implemented pandemic prevention and control measures and undertook various tasks in advance to minimize the obstacles that may arise in the course of daily operations. As a result, construction works were carried out in an orderly manner and projects commenced operation as scheduled, including various large-scale wind power and photovoltaic power generation projects in Shanxi Province, Hebei Province, Guangxi Zhuang Autonomous Region and Liaoning Province, and large-scale new energy base projects in Hubei Province and Shandong Province.
New Development Projects
During the year under review, the Group continued with the development of, among other things, integrated power source, power grid, power load and energy storage (“Source-Grid-Load-and-Storage”) projects and achieved breakthroughs for several projects. Among which, the Hubei Macheng Base Project further obtained a construction quota of 300MW. The CP Pu’an 1,000MW Integrated Wind, Photovoltaic, Thermal Power and Energy Storage Demonstration Project was included in the “14th Five-Year” power development plan of Guizhou Province. In addition, the Xinjiang Hutubi Integrated Source-Grid-Load-and-Storage Project (300MW of photovoltaic power) and the Integrated Source-Grid-Load-and-Storage Project in the Lubei Integrated Intelligent Industrial Park (50MW of wind power and 450MW of photovoltaic power) have received official approval from the local administrative examination and approval bureau.
In addition, Xinyuan Smart Storage has pipeline projects with a capacity of over 2,500MWh located across more than ten provinces, municipalities and autonomous regions nationwide, including Qinghai, Shandong, Jiangsu and Anhui. Among which, two energy storage demonstration projects were located in Hebei Province, namely the Mancheng 100MW/200MWh Independent Energy Storage Demonstration Project and the Wangdu 100MW/200MWh Independent Energy Storage Demonstration Project in Baoding, respectively. At the same time, the Group actively supported the compressed air energy storage project in Hunan Province with a view to laying a solid foundation for future development.
Regarding overseas projects, Xinyuan Smart Storage achieved groundbreaking success by completing the factory acceptance test for its first overseas energy storage project, namely Phase I of the Puerto Peñasco Port 120MW Photovoltaic Power Integrated with Energy Storage Project in Mexico. Meanwhile, the Group is gradually tapping into overseas markets such as Chile, Australia and Thailand. The energy storage business segment is set to be a strong driver for China Power to develop itself internationally.
Currently, the total installed capacity of new projects of the Group at a preliminary development stage (including projects with applications submitted to the PRC government for approval) is approximately 9,400MW, all of which are clean energy projects primarily located in areas with development potential, such as Shandong Province, Guangxi Zhuang Autonomous Region, Anhui Province and Hubei Province.
Power Generation and Electricity Sales
In 2022, the details of power generation and electricity sold by the Group are set out as follows:
POWER GENERATION
ELECTRICITY SALES
In 2022, the total electricity sold by the Group amounted to 108,170,802MWh, representing an increase of 7.51% as compared with the previous year. The changes in electricity sold by each power segment as compared with the previous year (restated) were as follows:
Hydropower — A decrease of 12.97% in electricity sold due to a year-on-year decrease in average rainfall during the year in the river basins where the Group’s hydropower plants are located.
Wind Power and Photovoltaic Power — During the year, the electricity sold of wind power and photovoltaic power recorded a year-on-year increase of 35.27% and 33.71%, respectively, due to the commencement of commercial operation of a large number of new wind power and photovoltaic power generating units of the Group.
Coal-fired Power — Driven by the increase in electricity demand during the year and the commencement of commercial operation of new coal-fired power generating units at the beginning of the year, the electricity sold increased by 7.23% year-on-year.
Natural Gas Power — The electricity sold increased by 5.84% year-on-year due to the commencement of commercial operation of a new project with a capacity of 200MW during the year.
Environmental Power — The Group acquired various environmental power generation companies during the year with an aggregate electricity sales of 313,158MWh.
In 2022, the details of electricity sold by the Group’s main associates and joint ventures are set out as follows:
ASSOCIATES
JOINT VENTURES
Heat Sales
In order to strongly support the existing environmental policies promulgated by the Chinese Government, the Group has carried out in-depth exploration of potential sites for heat supply in various regions, strengthened development of the heat market, promoted the construction of centralized heating pipe networks, and developed heat and electricity co-generation projects, thereby achieving satisfactory results in various areas such as enhanced energy efficiency upgrade and exploitation of the heat supply market. Yaomeng Power Plant completed the capacity expansion and upgrade of the heat supply station, which increased the heat supply capacity of the entire plant substantially. Wuhu Power Plant and Pingwei Power Plant are also building branch pipelines to extend the reach of their heat supply services.
In 2022, the total heat sold by the Group was 16,851,046GJ, representing an increase of 4,281,621GJ or 34.06% as compared with the previous year. The Group’s two associates and a joint venture recorded total heat sold of 14,304,152GJ, representing a decrease of 1,333,109GJ or 8.53% as compared with the previous year.
Direct Power Supply
The Group has actively participated in the market-oriented reform of the national power industry and enhanced research on electricity market policies, particularly trading of spot electricity, green certificate/green energy, carbon emission quotas and related market policies and regulations. Keeping abreast of the reform, the Group maximized electricity sold through the market and its market share through increased participation in direct power supply transactions (including competitive bidding for on-grid electricity sales). Subsidiaries in various provinces have also established their electricity sales centers to attract more target customers through the provision of quality services.
In 2022, for those coal-fired power plants and hydropower plants of the Group which participated in direct power supply market transactions, their electricity sold through direct power supply transactions amounted to 67,862,570MWh and 583,650MWh, respectively, together accounting for approximately 63.28% (2021 (restated): 45.73%) of the Group’s total electricity sold. The proportion of coal-fired power and hydropower generated electricity sold through direct power supply transactions accounted for 100% and 3.21% (2021 (restated): 63.30% and 28.54%) of their respective segments, respectively. During the year under review, the on-grid tariffs of direct power supply by hydropower were much lower than the official benchmark on-grid tariffs that the government approved for hydropower, and thus the Group has reduced the proportion of hydropower generated electricity sold through direct power supply transactions significantly.
In October 2021, the NDRC published Circular No. 1439 “Notice on Further Deepening the Market-oriented Reform of On-Grid Tariff for Coal-fired Power Generation (《關於進一步深化燃煤發電上網電價市場化改革的通知》)”, pursuant to which, all existing coal-fired power generated electricity would be traded via market transactions, and currently, since all the power production quota of large-scale coal-fired power generating units of the Group were obtained from the market, therefore the proportion of electricity sold through direct power supply transactions has reached 100%.
For those coal-fired power and hydropower plants of the Group which participated in direct power supply market transactions in 2022, their average on-grid tariffs were at a premium of approximately 20.11% and a discount of approximately 33.20% (2021: discounts of 0.70% and 6.53%), respectively, compared with their respective average on-grid tariffs officially approved by the Chinese Government.
As coal prices soared, coal-fired power enterprises of various provinces increased the market trading prices of electricity. Save for Guizhou Province, the market trading prices of electricity in the regions where the Group’s coal-fired power plants were located have all increased to approach, or reached, the price cap of 20% above the local benchmark on-grid tariffs for coal-fired power generated. Meanwhile, certain power plants have increased their on-grid tariffs to over 20% above the benchmark on-grid tariffs through peak-valley time-sharing transactions and cross-provincial and cross-regional transactions.
Average On-Grid Tariff
In 2022, the average on-grid tariffs of each power segment of the Group as compared with the previous year (restated) were as follows:
It was mainly attributable to the decrease in the proportion of market-traded electricity sales with relatively lower on-grid tariffs, and thus resulted in a higher average on-grid tariff of hydropower.
It was mainly attributable to the year-on-year increase in the proportion of market-traded electricity sales with lower on-grid tariffs, and thus resulted in a lower average on-grid tariff of wind power.
It was mainly attributable to the commencement of operation of the Group’s grid parity and competitive-bidding photovoltaic power generation projects during the year, which resulted in a lower average on-grid tariff of photovoltaic power.
It was mainly attributable to the fact that the on-grid tariffs for the production quota that were traded through the direct power supply market have all increased to above the benchmark on-grid tariffs for coal-fired power generated during the year.
It was mainly attributable to the benefits derived from the subsidy policy of Guangdong Development and Reform Commission for natural gas power.
In 2022, all coal-fired power production quota trading via market-power transactions and the development of the power spot market gained momentum. The Group will continue to closely monitor and enhance the research on policies in relation to market-power trading. It will spare no efforts to comply with regional market policies and maintain a sound market environment to outperform its peers in terms of market indicators under the same conditions.
Average Utilization Hours of Power Generating Units
In 2022, the average utilization hours of power generating units of each power segment of the Group as compared with the previous year were as follows:
It was mainly attributable to the decrease in power generation as a result of the decrease in the average rainfall during the year in the river basins where the Group’s hydropower plants are located.
It was mainly attributable to insufficient wind resources in 2022 as compared with the previous year.
It was mainly attributable to the results achieved from effective facility management and maintenance as the Group has strengthened the management and analysis of photovoltaic power generating units, established various reporting mechanisms, set up a special group to study the countermeasures for photovoltaic curtailment, comprehensively improved the reliability of equipment in the station, and improved the optical power prediction system and model optimization to achieve enhanced effectiveness of management and maintenance.
It was mainly attributable to the recovery of overall power consumption driven by the year-on-year increase in electricity demand, in particular power consumption in the industrial sector, during the year.
It was mainly attributable to the sharp increase in demand for heat supply in the industrial park where the Group’s natural gas project is located in Hubei Province, and the project has maximized its profits by reducing power generation and increasing heat supply.
Energy Storage Business
For 2022, the net profit from the energy storage business amounted to RMB34,220,000, representing a decrease of RMB7,873,000 or 18.70% as compared with the previous year. The energy storage business mainly comprises the sales of energy storage equipment, the provision of subcontracting services for developing and assembling power stations integrated with energy storage and energy storage capacities leasing services, and charging services of energy storage power stations. Energy storage is an emerging industry, and the Group’s energy storage business is still at the initial stage of development. During the year under review, the Group overcame unfavorable factors such as recurring pandemic and rising raw material prices, continued to optimize its business structure, diversified the development of its energy storage projects, deepened its intensive procurement model to reduce material costs, and hence successfully maintained its profitability. However, it is expected that with the continuous adjustment and optimization of the energy storage policies in the PRC, the prospect of commercial application of energy storage will become clearer, hence the growth rate of investment in energy storage will increase and contribute to a strong growth of the energy storage market. Against such back drop, the Group’s energy storage business segment will continue to adapt to market changes, and the Group is optimistic that the energy storage business segment will continue to expand in the future.
