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Event: Recently, Guangdong Province released the 2023 Offshore Wind Power Project Competition Configuration Work Plan, the overall plan in line with market expectations.

provincial management 7GW + state management 8GW competition plan landing. The Plan points out that there are 15 provincial sea area projects with a total installed capacity of 7GW, including Zhanjiang (2/0.7GW), Yangjiang (6/3GW), Jiangmen (2/0.8GW), Zhuhai (2/1GW) and Shanwei (3/1.5GW). There are 15 tentatively pre-selected projects in the national sea area with an installed capacity of 16GW, including Shantou (5/5GW), Shanwei (4/4GW), Jieyang (3/4GW) and Chaozhou (3/3GW), from which 8GW demonstration projects will be selected to carry out preliminary work.

The continuity of policy planning is strong, and the development of Guangdong sea breeze is accelerated again. As early as November 2021, the "14th Five-Year Plan for Marine Economic Development in Guangdong Province" proposed to strive to build a cumulative installed capacity of 18GW by the end of 2025, and build a 10GW sea breeze base in eastern and western Guangdong. In April 2022, the "14th Five-Year Plan for Energy Development in Guangdong Province" proposed that the new installed capacity of sea breeze during the "14th Five-Year Plan" period was about 17GW. In May 2023, the "Guangdong Province to promote high-quality energy development implementation plan" required 2023-2025 to build a new 8GW, a new 12GW sea breeze project. Combined with the previous policy, it can be seen that Guangdong sea breeze in accordance with the competition with 22GW (provincial management 8GW + state management 16GW), start 15GW (provincial management 7GW + state management 8GW), grid 6GW (provincial management 4GW + state management 2GW) orderly progress, open the sea breeze medium-and long-term growth space.

The non-competitive electricity price and the land supplement effectively guarantee the profitability of the sea breeze project. The plan points out that the on-line electricity price is not used as a factor in this round of competition, and the on-line electricity price of the sea breeze project participating in the allocation is implemented at the benchmark price of 0.45 yuan/degree for coal-fired power generation. A comprehensive scoring method (70/30 points for the city/province and 20 points for the additional) is adopted to select the applicant, giving up the maximum of 5 points for the provincial sea breeze subsidy. In addition, after the withdrawal of the state subsidy in 2021, Guangdong will implement land subsidy, and subsidize 1000 yuan/500 yuan per kilowatt for the provincial sea area projects with full capacity connected to the grid in 2023/2024.

The state-managed sea area has begun to start, and the sea breeze market has a broader space. Previously, Guangdong did not specify the competition plan for the state-administered sea area. This document clearly defined the planning and implementation rhythm (the province organized the selection and determination of demonstration projects in mid-December, and the province issued a notice and organized the implementation at the end of December), paving the way for the acceleration of the construction of the wind power market in the state-administered sea area. This also means the start of a market with more space, longer offshore distance, and higher value of pipe piles and submarine cables. In February 2023, Chen Yongsheng, director of the New Energy Department of the National Energy Administration, said that the "Far-reaching Sea Breeze Management Measures" will be issued soon. As the planning of the far-reaching sea breeze project continues to advance, we expect that the new regulations on the "double 30" construction may be coming to the ground.

Investment advice

Guangdong, as a strong marine province, has a coastline of over 4000 kilometers and superior wind resources, with wind speeds of about 7.3-9.5 m/s and power generation hours of 3000-4000h h. With the large-scale and far-reaching development of sea breeze, Guangdong is expected to give full play to the comprehensive advantages of good wind resources, high Internet prices and mature industrial chain, the cost is expected to continue to decline, and the project yield is expected to continue to improve. Relevant enterprises in Guangdong layout will fully benefit from this policy. It is suggested to pay attention to the whole machine manufacturers Mingyang Intelligent (601615.SH), Sany Heavy Energy (688349.SH), Yunda (300772.SZ), Jinfeng Technology (002202.SZ) and parts manufacturers Dongfang Cable (603606.SH), Daijin Heavy Industry (002487.SZ), Taisheng Wind Energy (3001231.1231. Maintain a "recommended" rating.

Risk Alert

The "double carbon" target is not advancing as expected, the risk of industrial policy changes, the installation is not expected, and the risk of higher-than-expected decline in product earnings due to increased competition in the industry.

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this article is taken from: the research report released by china galaxy securities on June 5, 2023 "[yinhe electric new Zhou ran] industry review report_Guangdong released 2023 sea breeze competition plan, territorial layout company is expected to benefit_230604"

Analyst: Zhou Ran

Special thanks: Huang Lin

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