However, utilisation dropped by 672 hours.
CGN Power’s total power generation in 2015 came to 88.3GWh, up 20.4% YoY and in line with forecasts for 21.7% YoY growth. According to our estimate, average utilization was 7,045 hours in 2015F, down from 7,717 hours in 2014.
According to CCB International, they expect this to improve in 2016F thanks to agreements made with China’s National Energy Administration and local governments for allocating a higher power generation quota to its units.
Here's more from CCB International:
Hongyanhe Unit 2 resumed operations in mid Dec. Units under construction progressing according to plan. By the end of 2015, ten nuclear units were under construction and progressing according to plan. Most of CGN’s units are scheduled to go online in 2016-2017.
With Taishan Unit 1, the company’s first project with third-generation nuclear technology, having commenced cold functional testing on 30 Dec, we see lower risk of project delays for the rest of CGN’s portfolio. We forecast a doubling of the company’s operating capacity and 20% earnings CAGR in 2014-2019F.
Resilient tariff despite recent tariff cut on other sources of power. In late Dec, China announced an on-grid tariff cut on coal-fired power (-8%), solar (-2-11%) and wind (-2-4%) effective 1 Jan 2016. The fact that the benchmark tariff on nuclear power was left unchanged reaffirms our view that the government is averse to cutting tariffs on nuclear power because of its long-term commitment to developing nuclear power. Also worth mentioning is that the tariff on nuclear power is far below that of other clean energy sources such as solar and wind.
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