Friday, December 14, 2007

China listed firms invest 15.6b yuan in new energy

By Shangguan Zhoudong ( 2007-12-12 14:34

A total of 25 Chinese listed companies have invested 15.6 billion yuan ($2.11 billion) so far this year in new energies, including the wind energy, solar energy and coal chemical industries, the China Securities Journal reported today.

Guizhou Chitianhua Co Ltd invested a combined 5.58 billion yuan in new energies, the highest of the 25 listed firms.

Shanghai Aero Auto Electromechanical and Baoding Tianwei Baobian Electric Co have poured 1.9 billion yuan and 1.48 billion yuan respectively into the new energy sector.

The three publicly-traded companies' investment into new energies accounted for 57.25 percent of the 25 listed firms' total, statistics show.

The 25 firms include eight electricity-related enterprises, six electric equipment companies, and four chemical firms.

As price of crude soars, the new energy sector is gaining momentum. The World Energy Council says the global new energy market will reach $2 trillion by 2020, and wind power, solar energy, ethanol, and biofuel will become mainstream investment targets.

Additionally, new energy is one of the main focuses of China's 11th Five-Year Program (2006-10). The industry is likely to see rapid development, enjoying supportive policies.

In terms of energies, a combined 2.57 billion yuan was invested into wind power, accounting for 16.41 percent of the total; 7.49 billion yuan into the coal chemical industry, representing 47.89 percent; 4.66 billion yuan into solar energy; and 746 million yuan into battery firms.

Goldwind Science and Technology Co Ltd, China's leading wind energy equipment maker, is planning to list on the Shenzhen Stock Exchange. The firm's estimated sales revenue for 2007 is 3.24 billion yuan, with a considerable net profit of 601 million yuan.

New energy stocks are also performing better on China's stock market. The Shanghai Composite Index has declined 2.49 percent since November 21, but the 25 listed firms added 16.68 billion yuan in capitalization, or 6.49 percent, in the same time period.

Earlier this month, a draft of the energy law was officially published for public comment. The new law is expected to put China's energy management onto a legal track and help China better safeguard its energy security.

The draft energy law has 15 chapters and 140 articles that define energy management, strategy, development, supply, storage, and conservation. The law will also cover energy technology, international cooperation, fiscal and tax policies, and other issues.

Future Looks Bright for the China Photovoltaic (PV) Battery Industry as Solar Energy Goes Mainstream

DUBLIN, Ireland--(BUSINESS WIRE)--Research and Markets ( has announced the addition of China Photovoltaic (PV) Battery Industry Report, 2007 to their offering.

PV industry witnessed a rapid growth, and in the future it will have a nearly limitless outlook. During the ten years from 1996 to 2006, yield of solar batteries in the world has increased by 26 times with an annual compound growth rate of 38%. Besides, annual installations of solar batteries have increased by 22 times with annual compound growth rate of 36%. Such a growth is too speedy to compare for any other industries except for the semi-conductor industry. Though Germany is today's largest PV market, but solar power generation there still takes a low proportion of 0.5%. But solar energy will undoubtedly become one kind of mainstream energy; therefore, its market will witness a bright prospect in the long term.

From 2020 to 2030 solar energy will enter into the mainstream energy market on a large scale. Technical progress together with scale effects will steadily reduce the cost of PV batteries. Curve figures of PV industry in the past 40 years have shown that cost will down 15-20% once accumulated sales volume of PV batteries is doubled. Meanwhile, power generation cost with fossil fuel has been increasing for a long term. We estimated here by different geographic locations, that solar power generation cost in developed countries will approach electricity prices for the peak period from 2010 to 2030; and it will approach average electricity prices from 2020 to 2050.

Promotion from governments will still be the leading strength for industry development in the short run. Undoubtedly, The government plays a key role in boosting PV industry. Europe, USA and Japan all have recognized the importance of strategy to develop PV industry and they all have plans of their own. But the real development of the industry usually doesn't fit well with these plans. It's believed that existing policy in each country has established gigantic potential demands; and decline in growth speed in 2006 is caused by that growth of battery price has restrained demands. Therefore, as long as battery prices properly decline, growth of installed capacity can exceed 30%.

China PV industry focuses more on midstream and downstream businesses; and it will confront with considerable inconveniences on entry into upstream polysilicon business. China PV batteries list the 3rd in the world by production capacity; however, polysilicon raw materials and markets all lie in overseas market and domestic industrial structure is very irrational. Now market competition is fiercer and fiercer, and competitiveness of Chinese enterprises still lies in the cost. Undoubtedly, advantages for leading enterprises with long-term polysilicon orders will be enlarged; while enterprise with no strengths will be eliminated. Many investors are attracted by the huge profits. However, very few projects can really bring economic profits.

It is believed in the next few years, companies with sufficient polysilicon supply and manufacturers of amorphous silicon PV battery would obtain broad development space. As for crystalline silicon PV battery producers, only the strong can survive competition and gain more strength. Therefore PV enterprises with international resource and internet strength will particularly develop well. Film PV battery companies industrialized will enjoy a greater developing space, which will naturally draw much interest from investors.

1 Solar Energy is the Inevitable Energy Choice
1.1 Only Solar Energy can satisfy Future Energy Demands
1.2 Solar Energy is to enter into Mainstream Energy Market in 2020-2030
2 Supply and Demand Analysis on Global PV Market
2.1 Governments will still be the Leading Strength to boost Industry Development for a medium and long term
2.2 Existing Policies will boost Rapid Development of PV Market
2.3 Active Production Expansion by Battery Manufacturers, and Ample PV Batteries Production Capability
2.4 Polysilicon Supply Crisis is to start loosing at the end of 2008
3 PV Industry Chain
3.1 Pyramid Distribution has brought advantages of Upstream Enterprises
3.2 Competition Status
3.3 Optimization of Industry Chain will bring Cost Decline
4 China Solar Energy Industry
4.1 Most Enterprises Invested in Polysilicon
4.2 Difficulties in Starting China Market in the next few years
4.3 Relevant Listed Companies
Selected Charts
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