Next year's electricity growth or slowdown year-on-year

Looking ahead to 2012, the power generation industry is more concerned with 2011 than it was in 2011. Although there are favorable factors in power generation industry, such as the adjustment of power tariffs, the expected recovery of hydropower, the reduction in thermal power sector losses, and the continued development of non-electricity industry development, there is no fundamental improvement in the policy market environment, and coal prices are still facing high volatility. The history of thermal power plants has suffered heavy losses, increased investment in environmental protection, high asset-liability ratios, heavy restructuring and development tasks, slower growth in demand for electricity, tight cash flows, and weak profitability. Therefore, in the face of new situations and challenges, power generation companies will continue to move forward in the process of change.

I. Forecast of Power Industry Situation in 2012

1. China's electricity demand has basically recovered, but the growth rate may slow down. According to the prediction of CEC, the electricity consumption of the whole society in 2011 increased by nearly 12% year-on-year, and it has basically recovered to the level of 2007 before the financial crisis. Due to the impact of factors such as the decrease in the new size of thermal power in the previous year and the incoordination of power grid construction, the national power supply and demand situation in 2012 will continue to maintain an overall balance and a tight period in individual periods. However, due to the current sluggish economic growth in the United States, the spread of the debt crisis in Europe, the slow recovery of the world economy, and the more complex and severe economic operating environment, especially the reduction in external demand has adversely affected exports, and China’s economic growth is likely to fall. GDP is expected next year. The increase was about 9.2%. Affected by factors such as slower economic growth, increased energy conservation and emission reduction, and adjustment of industrial structure, especially this year's two sales price increases will have a greater impact on the growth of high-energy-consuming industries next year, and the year-on-year growth in electricity consumption may slow down next year. It will be lower than this year's growth level and is expected to be around 10%.

2. It is unlikely that the coal price will rise sharply in the market, and it will maintain a high level of ups and downs. In the winter and next spring, according to historical experience, due to factors such as the increase in demand for coal in winter and coal ordering next year, as well as the increase in electricity prices in December this year and the increase in power generation enthusiasm of thermal power companies, coal prices have the potential to increase. However, due to the dual influence of the current supply and demand relationship in the coastal coal market and the price-limiting policy, the domestic coastal thermal coal market has a strong wait-and-see atmosphere and coal prices will experience a temporary decline. From the analysis of the whole year in 2012, due to the slowdown in China's economic growth, the international coal price was around US$120/tonne, and the 2011 coal production had a rare increase of nearly 10% in recent years, and it is expected to reach 35. Billion tons, an increase of 300 million tons over the previous year, and a net import of 150 million tons. The newly increased scale of thermal power has decreased significantly. This year's two sales price increases will have an impact on the growth of high-energy-consuming industries next year. The country has also introduced a coal price limit policy. The probability of a sharp increase in coal prices next year will decrease, and it will even decline at certain times. However, the overall market price of coal will be expected to show high and high volatility.

3. The tightness of the money market has eased and the financing environment for power generation companies has improved. On the one hand, the pressure of economic growth in China is increasing. As the economy of Europe and the United States has not shown signs of improvement, China’s export slowdown and the purchasing managers’ index (PMI) have fallen, making China’s economy need new liquidity to maintain growth; on the other hand, China’s task of controlling inflation has eased. After reaching a high point in July, CPI has dropped for three consecutive months. In November, CPI increased by 4.2%, and is expected to exceed 4% in December. Therefore, the central bank will take action to cut the deposit reserve ratio by 50 basis points on December 5, and may reduce it by 2-3 times in the next 6-9 months. China’s monetary policy will move into a fine-tuning, tightening and loosening trend. In order to ease the current state of the money market's tight funding and damage to the real economy. Of course, this does not mean that China's monetary policy has been fully turned. It also needs to keep the direction of stability. Next year, the financing environment for power generation companies will improve, but due to heavy transfer of tasks, structural adjustments, heavy historical losses, and high debt ratios, the supply and demand of funds will remain tight.

4. There are many uncertainties in the operating conditions of power generation companies, but overall there will be changes. At present, compared with the upstream and downstream industries, the electric power industry is the industry with the lowest level of profitability, and the sales profit rate is only 3.2%. It is about half of the average sales profit rate of industrial enterprises above designated size, less than 1/4 of the coal industry, oil and gas 1/12 of the industry, next year, deep-seated contradictions and operational difficulties affecting power generation companies still exist, such as coal and electricity contradictions, historical losses, capital shortages, high debt ratios, high financial costs, heavy development tasks, etc., as well as China's economy Many uncertainties such as growth, electricity market, and changes in capital markets. From January 1st, 2012, we will implement the newest emission standards for atmospheric pollutants in the most severe thermal power plants in history, from mandatory desulfurization to denitrification. Although the pilot policy for denitrification is 0.3% per kilowatt-hour, it does not support the increase of 1,000 annually. Billion operating expenses. Of course, good factors are also beneficial. For example, on November 30 this year, the National Development and Reform Commission will increase the on-grid tariff by 2.6 cents, and control the closing price of electric coal at major ports at around 800 yuan per ton. It is expected that the whole industry will affect the tail stocks by 11 next year. The monthly income will increase by nearly 80 billion yuan. There will also be structural adjustments in the coal, finance, logistics, technology, and clean energy of the five major power generation groups as well as the benefits of lignite blending. If water is a normal year in the next year, hydropower will increase production and income. In short, next year for power generation companies, there are good things to worry about, and there is still a long way to go before turning losses into profits, and business conditions will improve.

II. Outlook for Power Generation Enterprises in 2012

Given the new situation and challenges faced in 2012, power generation companies represented by the five major power generation groups are actively thinking about how to solve the current difficulties and deep-seated problems, continue to build a modern integrated energy group, and unswervingly follow the strategy. Transformation, innovation and development. At the same time, we are also striving to achieve a transition from a production-oriented enterprise to a business-oriented enterprise, to safer, more economical, and safer, economic operations, to profitable losses, and to forge ahead in the course of change.

Strategic transformation and structural adjustment are still the top priorities of development work. The first is to promote industrial restructuring. Huaneng is committed to building the five major industrial systems of electric power, coal, transportation, finance, and science and technology, and has taken the lead in entering the ranks of world-class energy companies. Datang has developed a sixteen-character principle of electricity-based, diversified operation, seven sectors, and coordinated development; Huadian. Further build four major industrial sectors to form an energy industry system with both economies of scale and support, science and technology financial support, coal circuit and port transportation; Guodian takes the lead in new energy and builds innovative companies; CPI insists on the integration development of coal, electricity, aluminum and roads, and establishes Three major business segments, six industrial clusters and cross-regional coal and electricity joint ventures. The second is to promote the adjustment of power supply structure. Continue to vigorously develop clean energy such as hydropower, wind power, nuclear power and solar energy, and increase the proportion of clean energy in the power supply structure, becoming the consensus of the five major power generation groups. Third, the development of the layout from the domestic part of the country to expand throughout the country; based on the domestic market, but also actively enter the overseas market.

Reducing costs and increasing efficiency, turning deficits and gaining profits are still the main theme of business operations. In 2012, with regard to the work of Sandian and Simei, it is crucial for power generation companies to reduce operating costs and increase efficiency, reduce losses and increase profitability to resolve business risks, and improve sustainable development capabilities. Specifically speaking, it is necessary to continue to further develop internal potential tapping work, and to make efforts in fine management and benchmarking, increase the use of low-grade and low-grade coal by blending, promote energy-saving technological transformation, and strengthen the safe and economic operation of the unit. In order to benefit from the indicators. Of course, in the current complex business environment, it is also necessary to reflect all the difficulties and problems existing in the enterprise in all directions and at all levels of government, strive for policy support, and benefit from policies.

Strengthening capital operation and innovating institutional mechanisms are the two wings of continuous operation and scientific development. In 2012, the high debt-to-asset ratio and tight funding will continue. Therefore, the power generation enterprises will inevitably further increase the capital operation, and do everything possible to ensure the supply of funds, and strive to avoid the risk of capital chain fracture. At the same time, it will continue to innovate in financing methods. In addition to traditional financing channels such as the promotion of listing of high-quality assets, stock issuance, the issuance of bills and bonds, the introduction of strategic investors, the sale or sale of assets, and the promotion of asset securitization will also be actively applied. In addition,

In order to enhance the vitality of power generation enterprises, in 2012 will further innovate the institutional mechanisms. For example, Huaneng intends to select five important subsidiaries to conduct pilot report on risk management reports and further improve the risk management procedures and methods. After completing the reform of the management and integration of the headquarters, CPI will focus on promoting the restructuring and integration of the second and third-tier companies next year, setting up branches and subsidiaries, and increasing the profits attributable to the parent company, effectively reducing the Group's operating risk.