97% of PV installations achieved last year

One of the two major problems of photovoltaic power generation: the problem of grid-connected digestion has been basically eased since last year. The 2013 Photovoltaic Power Statistics released by the National Energy Administration shows that as of the end of 2013, the cumulative installed capacity of photovoltaic power generation in the country was 19.42 million kilowatts, which is 97% higher than the total installed capacity of 1992 million kilowatts. The capacity is connected to the grid.

Data show that in the installed capacity of 19.22 million kilowatts of grid-connected photovoltaic power generation, the number of photovoltaic power plants was 16.32 million kilowatts and distributed photovoltaics was 3.1 million kilowatts. The cumulative power generation for the whole year was 9 billion kilowatt-hours.

In fact, under the influence of foreign trade protectionism, China's photovoltaic industry has been undergoing an overcapacity adjustment period in recent years after explosive growth. Photovoltaic companies have to transfer their markets to China. However, due to the slow development of infrastructure such as photovoltaic power generation capacity, the domestic photovoltaic market has not been opened. According to data released by the China Electricity Regulatory Commission, as of 2012, the total installed capacity of solar photovoltaic power generation increased to 7 million kilowatts, but the amount of grid-connected electricity was only 3.28 million kilowatts, and more than half of the installed capacity was not digested. Therefore, the industry is concerned that photovoltaic power generation or step-by-step wind power will appear in the “abandoned light” phenomenon.

“The difficulty in grid connection is a major problem that restricts photovoltaic power generation. From less than half of the digestion in 2012 to 97% in 2013, it shows that the photovoltaic installation and grid connection has been basically alleviated.” Xiamen University, China Energy Economics Research Lin Boqiang, director of the Center, believes that the phenomenon of waste of resources will be further curbed by the failure of power generation. This is related to a series of subsidy policies such as the increase in the installed capacity of photovoltaic power generation by the State, and the State Grid’s commitment to resolve grid connection issues.

Last year, the State introduced a number of photovoltaic power generation incentive policies, including the State Council's Several Opinions on Promoting the Healthy Development of the Photovoltaic Industry. In terms of electricity price, it clearly defined the on-grid tariffs for photovoltaic power plants in the subregion and the subsidy of 0.42 yuan per kilowatt-hour for distributed photovoltaics. Subsidy is stronger than expected. In terms of taxation, in September last year, the state imposed a 50% policy on value-added tax for photovoltaic power generation. In terms of installed capacity, the target of photovoltaic installation during the “Twelfth Five-Year Plan” period was raised from 21 million kilowatts to 35 million kilowatts.

However, in Lim Bo-keung's view, although the amount of grid-connected photovoltaic power generation has greatly increased, it is still far from solving the excess capacity. China's photovoltaic industry has a capacity of between 25 and 40 million kilowatts, which can supply global market demand. Even if the domestic PV installation target is completed, it will be difficult to digest excess capacity. Photovoltaic companies are not doing well and mergers and acquisitions are still a trend. .

Alberto Naudon, chief economist at Chilean Credit and Investment Banking (BCI). Albert believes that: Copper is the largest export product in Chile. No one doubts China’s huge impact on the price of copper and even Chile’s future. In the context of a marked slowdown in China's economic growth, Chile is not yet ready to deal with the persistent fall in copper prices and thus directly affect government spending. However, with the adjustment of China's economic structure, there will be no drastic drop in copper prices in the next few years. China's demand for copper has reason to continue to maintain growth of 4% to 5%.

First, as mining investment is an important promoter of the Chilean economy, the Chinese economy has a significant impact on mining investment in Chile and affects the Chilean government’s financial expenditure.

In 2010-2012, during the period of low economic growth in the world, the Chilean economy threw a growth rate of close to 6%, and its most important promoter was mining investment. Because investors at the time had better expectations of copper price growth, there was a boom in mining investment. At present, mining investment projects in Chile have sufficient reserves, and nearly 48 billion U.S. dollars of mining investment projects have been registered, accounting for 40% of total investment projects in the next five years. If copper prices continue to fall to US$2.6/lb due to the slowdown in China’s economic growth, most of these projects will face failure.

The main factor affecting the Chilean government’s fiscal expenditure is also mining investment. Copper revenue accounts for about 10% of Chile’s income structure. The reduction in copper revenue will have a significant impact on the government’s fiscal revenue and expenditure, and it will have a negative impact on the tax reform plan that the government is currently discussing and implementing.

Second, China is solving the problems that arise in economic growth by transforming development methods, but the cost is unknown.

There is currently confusion about how to evaluate the economic situation of China, the world’s second-largest economy. These confusions should be solved in the light of China’s choice of development methods. China once chose the most successful development method in history. However, this development approach also brings about some potential crises. Simply put, the development method that China had chosen to use was to impose restrictions on finance and maintain a lower deposit rate, so that banks can also lend to enterprises at lower interest rates. At the same time, due to the low level of long-term income and the poor social security system, the Chinese people have to deposit most of their income into banks. However, government intervention and corruption have caused these deposits to be used for inefficient investments, leading to excess investment in certain industries. On the one hand, those companies that can obtain bank funds often do not have good investment projects; on the other hand, enterprises that cannot properly obtain bank funds have to seek non-normal financing channels, while private capital drives the maximization of capital gains. The next is also willing to lend through the above-mentioned abnormal channels. The combination of the two gave birth to shadow banking. Such a market is ineffective and risky.

In order to solve this problem, China is changing its development strategy. This means that there are both economic policy difficulties and the need to pay for adjustments. That is, companies and local governments that have already carried debt and have low investment efficiency must be forced to pay a price. . How much the cost will be, will be the biggest variable.

Third, China’s demand for copper will not only be excessively reduced, but will also increase in some areas. Copper prices are expected to remain stable.

Albert pointed out that the problem of shadow banking has the potential to cause a large-scale financial crisis in China. The data at first glance is very scary. Chinese debt has risen from 150% of GDP in 2008 to the current 250%, and almost half of them have Shadow banking related. However, there are also promising hopes that, although China’s shadow banking has increased a lot, it still accounts for a very small part of the entire financial system. In addition, unlike the financial crisis in the United States, China’s financial system is relatively simple and lacks complex financial derivatives that cause chain reactions in the subprime mortgage crisis. Shadow banks cannot be overly aggressive in China. The problems of individual companies do not spread to the entire economy.

In view of this, Albert believes that there is no institutional crisis in China's economy and that there will not be excessive and severe shocks and declines in the next few years. China’s demand for copper will continue to grow by 4% to 5%, not only will not be excessive. It will reduce, and there will be a lot of demand in certain areas. First, China will solve the increasingly serious environmental problems and will urge power plants to relocate from the coast to inland areas. The construction of transmission lines means huge demand for copper; There are overinvestments in some areas, but the per capita investment level in China is still very low, and starting a process of urbanization in a country where more than half of the population is a rural population will ensure that China still needs a lot of investment. For this reason, Albert judges that copper prices will remain in the stable range of $3 to $3.2/lb over the next few years.

In the first quarter of 2014, excess capacity was still a key issue facing the non-ferrous metal industry.

The pressure of electrolytic aluminum overcapacity will continue for a long period of time and will directly affect the operation of the coloring metal industry. At present, the solution to the excess capacity of electrolytic aluminum must be blocked.

In the first quarter of 2014, the warning index for the China Non-ferrous Metals Industry was 73.3, down 6.7 points from the fourth quarter of last year and continuing to operate in the “light blue light” area. As a preliminary judgment, overcapacity is still a key issue facing the industry, especially the electrolytic aluminum industry. It is expected that in the second quarter, with the arrival of the non-ferrous metal demand season, some non-ferrous metal prices may rebound, but the rate will not be too large, and aluminum prices are still more likely to oscillate below the average cost line. The pressure on electrolytic aluminum excess capacity will continue for a long period of time. Affected by this, the non-ferrous metals industry will continue to operate at low levels.

Looking back over a decade from the new century, due to the rapid growth in aluminum demand, the reform of the nonferrous metal management system has mobilized the enthusiasm of local governments and enterprises. A large number of private capital and coal-fired power companies have invested in electrolytic aluminum projects, coupled with advanced technology and equipment, and investment in electrolytic aluminum projects. The unit cost is lower than that in foreign countries, and China's electrolytic aluminum production capacity has continued to grow rapidly. According to preliminary statistics, as of the end of 2013, China’s electrolytic aluminum production capacity exceeded 30 million tons/year, and the average annual growth rate has exceeded 19% since the new century. At present, China's primary aluminum production accounts for more than 55% of the output of ten non-ferrous metals, and accounts for about 45% of the world's primary aluminum production. When the capacity of electrolytic aluminum changed from insufficient to relatively surplus, the economic benefits turned from profit to loss in the industry.

The electrolytic aluminum industry has turned from profit to loss. There are many reasons for this. Since the new century, with the advancement of China's electrolytic aluminum industry technology, coupled with energy conservation, consumption reduction, and strengthening of management, the cost of electrolytic aluminum has been greatly reduced, but it has been offset by rigid rising factors such as raw materials, electricity, labor, financing, and environmental protection. The supply turned from surplus to surplus, and the cost price went upside down. According to preliminary calculations, at present, the total cost of electrolytic aluminum in China has increased by about 15% compared with 2001, and the price of electrolytic aluminum in the domestic market has dropped by about 8% compared with 2001. The price ratio of copper and aluminum products dropped from 1:0.9 in 2001 to 1:0.27 in the first quarter of this year. In the first quarter, aluminum still exceeded supply, aluminum prices also oscillated below the average cost line, and electrolytic aluminum companies were in a state of loss or profit, which made it difficult to operate.

To resolve the excess capacity of electrolytic aluminum is a long way to go, we must "lock out" the combination. "Sparse" means to guide policy and expand domestic aluminum applications. In recent years, the non-ferrous industry has done a lot of work in expanding aluminum applications. It has implemented "aluminum substitute steel" for transportation vehicles, "aluminum section copper" for urban cables, and "aluminum section wood" for construction industry. Improving transportation efficiency in the transportation industry, alleviating the shortage of copper resources, effectively protecting forestry resources, and resolving excess capacity of electrolytic aluminum are of great significance.

"Blocking" means to strictly control the construction of new electrolytic aluminum projects and guide enterprises to close the high-cost electrolytic aluminum production capacity. However, while the production capacity of electrolytic aluminum is shifting westward, the withdrawal of high-cost production capacity in central and eastern China faces many obstacles. In addition to employee placement and debt repayment, it also involves local taxation, employment, power generation companies, transmission and distribution companies, and financial institutions. Downstream processing companies. Simply shut down the electrolytic aluminum company and local stakeholders will suffer.

At present, China's electricity cost accounts for about 45% of the cost of electrolytic aluminum production. Due to various reasons, it is very difficult to implement the direct electricity purchase policy, forcing electrolytic aluminum companies to gradually shift to areas where captive power plants can be built. This is also one of the important reasons for the excess production capacity of electrolytic aluminum. It is suggested that in conjunction with the reform of the electric power system, the direct purchase of electrolytic aluminum should be implemented, and the problem of grid connection fees for the electrolytic aluminum power plant should be solved. It is suggested that reasonable standards should be promoted in the areas where conditions are ripe, a fair competition environment should be created, a benefit-sharing mechanism should be established, and electrolytic aluminum distribution structure adjustment should be supported to effectively resolve excess capacity.

Given the large base of electrolytic aluminium production capacity, the strict control of new production capacity will continue to be the most important task in solving the problem of overcapacity. It is recommended that the State maintains total control, reasonable planning, and enhanced guidance on electrolytic aluminum production capacity, and establishes a complete exit mechanism for high-cost electrolytic aluminum production capacity in terms of tax deductions and exemptions, debt exemptions, employee compensation, and other aspects, and adopts certain policies. Support and compensation to encourage it to withdraw from the market as soon as possible and to defuse stock capacity.