PLAN FOR 2018

The macro-economy has been growing at a stable but slightly slower pace, under the influence of the supply-side structural reform of the domestic market, the initiative of “eliminating excess capacity, inventory depletion, deleveraging, reducing costs and shoring up weakness” (三去一降一補), the replacement and improvement of economic growth drivers (新舊動能轉換), and other policies. Against the backdrop, power demand is evolving in the direction of “slower growth, structural optimisation and change of growth drivers”, whereas power supply is “largely abundant, excessive in some areas, and sufficient to meet the demand”. The Company will maintain its strategic guidance, stay committed to the new energy industry, and explore the electricity market according to government and market demand. It will try to adopt a down-to-earth attitude to grow such business that has stable profitability. The Company will keep abreast of new energy policies from national and local authorities, plan in advance, strictly control the risks during early stages, and seek to have its key reserve projects included in the energy development planning of the province concerned. Furthermore, the Company will study and verify the direction of energy storage technology, as well as the latest technological developments in wind and photovoltaic power generation. It will speed up the technology and policy research to raise the capacity and efficiency of old wind and photovoltaic power stations, and increase its technical reserve on waste gasification, integrated smart energy, sludge power generation, and the interconnection of biomass gasification and waste-to-energy power generation. As part of its efforts to expand into circular economy, the Company will also look for partners in the power generation from sludge as well as food, medical and construction wastes, where urban pollutants can be recycled and reused. In this regard, the Company aims to become a model enterprise in the industry.

The Group’s key task in 2018 remains primarily the development of environmental-friendly power generation projects. The Group will continue to develop large-scale installed capacity in prefecture-level and small-scale installed capacity in county-level areas, so as to increase its market share. In areas with mature conditions, the Group will attempt to explore projects of power generation from medical, food waste and sludge. In mature key cities, the Group will promote distributed energy projects of natural gas, and encourage production diversification by appropriately matching heat supply with installed power capacity. In areas without wind curtailment, the Group will develop offshore and onshore wind power projects. In areas without photovoltaic curtailment, the Group will develop photovoltaic power projects with higher utilisation rates such as agricultural photovoltaic, fishery photovoltaic and farming photovoltaic projects. In western regions (particularly those adjacent to the corridor of high-voltage electricity transmission), the Group will establish reserve projects of wind and photovoltaic power as appropriate. In emerging industrial parks, the Group will look for opportunities to develop integrated smart energy projects, with active participation in internet-based energy projects.

KEY TASKS IN 2018

Making timely disclosure of project work and restructuring progress

The Group will continue to push forward project approvals and related works as well as restructuring, and make timely disclosures on work progress as required by the HKSFC and the Stock Exchange.

Improving the fundamentals of safety production and the safety production accountability system with sound implementation

The Group will improve its supervision and assurance system for safety production, with greater technical supervision. The Group will also provide a wide range of training, to eliminate noncompliance. In addition, more efforts will be made on safety and quality regulation for projects under construction, generation unit maintenance and technological upgrade. The Group will tighten its control on the admission of contractors, and offer greater training and management for qualified contractors. More than that, the Group will strengthen its supervision on environmental protection and maintenance of environmental protection equipment and facilities, to ensure emissions in line with standard.

Ensuring stable operating results and satisfactory sales in power business

The Group will endeavor to tap into the potential of enhancing efficiency, control its operating costs, and improve the efficiency of its inventory assets. The Group will further enhance its business in power and carbon emission trading. With respect to natural gas projects, we will continuously track and analyse power production plans, vie for valuable amounts of transacted power, and actively explore the heat supply market. Meanwhile, we will widen fuel supply channels and deliver concrete efforts to reduce controllable costs. With respect to wind power projects, on the premise of ensuring basic power volume, we will increase the power supply for big cross-provincial users, from the “Exchange of Wind and Thermal Power Generation” (風火替代) and for spot transactions, seeking to keep the wind curtailment rate lower than the regional average. As for hydropower projects, efforts will be made to generate more power during the summer when water resources are abundant so as to reduce the loss due to hydropower curtailment.

Improving corporate financing capability and the control on financial costs

The Group will fully utilise domestic financing and Hong Kong’s Stock Exchange listing platforms, replace high-interest loans through resource integration, and continue to widen financing channels to further reduce financing costs. The Group will also prepare plans for roll-over funding and control project capital reasonably, to reduce redundant capital.

Developing quality projects and enhancing core competitiveness of the enterprise

Based on optimised designs, the Group will make good preparation for new projects and improve the construction standards of the projects. While reinforcing its process management, the Group will also adhere to the values, beliefs and guiding principles in a “striver-oriented” talent management system, by reinforcing its talent incentive system, recruitment and assignment mechanism, and constantly optimising its workforce to build an enterprise team with unity, pragmatism, progressiveness and aggressiveness.

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