Shi Zhengrong: Photovoltaic power plant bid winning price is lower than 1 yuan sure loss

The successful results of the second round of 280 MW photovoltaic power plant concession project disclosed recently that the bid price was all lower than 1 yuan/kWh, the highest price was 0.9907 yuan/kWh, and the lowest was only 0.7288 yuan/kWh. Sunde Power Chairman and CEO Shi Zhengrong expressed to NetEase Finance in Wuxi on the 17th that the power generation at the bid price is “affirming a loss” and that the profit must be at least 1 yuan.

Shi Zhengrong said that the introduction of the bidding for photovoltaic power plant concession projects by the government is good news for private enterprises. Suntech's bidding strategy is very rational. It is necessary to win the bid at a reasonable price, and the general investment power station needs a return rate of 7 to 8%. If this level is not reached, no company will be willing to invest.

"We want to win the bid at a reasonable profit level. Therefore, even if we don't win the bid, we have a balance in our hearts." Shi Zhengrong said with a smile.

The second round of tendering involved 13 PV power plant projects in Shaanxi, Qinghai, Gansu, Inner Mongolia, Ningxia, and Xinjiang, with a total installed capacity of 280 megawatts. This is China's largest tender for photovoltaic power plants. The tender started in late June and officially opened the technical standard on August 10th.

All the projects won the bid were state-owned enterprises, of which China Power Investment Corporation won 7 projects and became the biggest winner in this round of bidding. However, the lowest quotation of 0.7288 yuan/kWh also caused the industry to lose its breath.

Industry experts said that the current reasonable cost of photovoltaic power generation should be between 1.1 yuan and 1.2 yuan. Under the 0.7288 yuan/kWh price, the project will take at least 20 years to achieve profitability.

Under the principle of “low-cost winners,” Zhejiang Zhengtai, Wuxi Suntech, Jiangxi Seville, Xinao Solar and other large-scale photovoltaic private enterprises did not win the bid. In contrast, the Yingli Group's binding of state-owned enterprises as a supplier of equipment indirectly achieved the bid.

Shi Dingyao, president of the China Renewable Energy Society, also called for the government to work out a cost-effective on-grid tariff as soon as possible. He said that the on-grid tariff policy has not yet been implemented comprehensively and effectively. This is a key issue for industrial development and market cultivation. It cannot make electricity prices a limiting and restrictive factor for industrial development.