A few days ago, the State Council issued the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" (hereinafter referred to as the "Action Plan"), proposing that by 2027, the scale of equipment investment in industry, agriculture, construction, transportation, education, cultural tourism, medical care and other fields will increase by more than 25% compared with 2023.
The reporter noted that power-related fields such as wind power and photovoltaic were included in the scope of equipment renewal in the Action Plan.
What is the significance of the power industry's promotion of equipment renewal, how can the power market take advantage of this policy opportunity, and which cities have more advantages in this round of action?
There is a great demand for equipment renewal in the mainland
In fact, the Programme of Action has been in the works for a long time. In December last year, the Central Economic Work Conference has clearly stated that "it is necessary to promote large-scale equipment renewal and consumer goods trade-in with the improvement of technology, energy consumption, emission and other standards". The fourth meeting of the Central Financial and Economic Commission held in February this year once again stressed that the implementation of large-scale equipment renewal and trade-in of consumer goods will effectively promote investment and consumption, which will benefit both the present and the long-term. Large-scale equipment renewal and consumer goods trade-in policies have been gradually implemented.
Zheng Shajie, director of the National Development and Reform Commission, said at the press conference on the economic theme of the second session of the 14th National People's Congress that promoting large-scale equipment renewal and trade-in of consumer goods is a major deployment made by the Party Central Committee and the State Council with a view to the overall situation of high-quality development. This is a major positive.
"Taking equipment as an example, last year, China's industry, agriculture and other key areas of equipment investment scale of about 4.9 trillion yuan, with the in-depth promotion of high-quality development, equipment renewal demand will continue to expand, the preliminary estimate will be an annual scale of more than 5 trillion yuan of huge market. He said.
In terms of the implementation of equipment renewal actions, the "Action Plan" clearly states that "vigorously promote the renewal and technological transformation of production equipment, energy-using equipment, power generation, transmission and distribution equipment". In terms of the implementation of recycling and recycling actions, the "Action Plan" proposes to "explore and carry out remanufacturing business in emerging fields such as wind power and photovoltaic", "accelerate the research and development of residual life assessment technology for wind power photovoltaic, power batteries and other products and equipment, and orderly promote the cascade utilization of product equipment and key components". In terms of the implementation of standard improvement actions, the Action Plan mentions that "improve standards for the upgrading and retirement of wind turbines, photovoltaic equipment and products".
"Vigorously promote the renewal and technological transformation of power generation, transmission and distribution equipment, which will bring huge investment and renewal opportunities to the power industry. There are many industries related to the upstream of power generation, transmission and distribution equipment, which can further stimulate the demand of many industrial industries such as electrical equipment and metal smelting. Wu Wei, an assistant professor at the China Energy Policy Research Institute of the School of Management of Xiamen University, said in an interview with a reporter from China City Daily that the new energy industry is an important foothold for the development of new quality productivity. For some wind power and photovoltaic stock units with backward technology and long service life, they can be refurbished through remanufacturing technology to achieve effective use of resources.
Cao Zhe, chief investment officer of Beijing Aiwen Zhiluo Investment Management Co., Ltd., analyzed to a reporter from China City Daily that on the one hand, the growth of demand for equipment renewal and technological transformation will provide market space for equipment manufacturers and engineering and technical service providers. On the other hand, the R&D and cascade utilization of residual life assessment technology of products and equipment have brought development opportunities for circular economy and green industry.
The power industry is ushering in new development opportunities
In the current economic situation, what are the considerations for the scope of the Action Plan to include electricity-related fields?
Wu Wei told reporters that as the basic industry of the national economy, the safe, stable, efficient and clean development of the power industry is of great significance for improving the operational efficiency of the national economy and promoting the development of new quality productivity.
"In the past 10 years, the mainland has made rapid technological progress in the fields of photovoltaic and wind power. Since 2012, the cost of solar modules has dropped by more than 90%, and the efficiency of power generation has also been greatly improved, and the cost of wind power has been reduced by more than 70% after the development of large-scale wind turbines. However, the application and substitution of new technologies often takes a long time, and there are still a large number of early-stage products in the existing stock facilities. By improving the standards for wind turbines, photovoltaic equipment and product upgrading and decommissioning, accelerating the research and development of residual life assessment technology for wind power photovoltaic and other product equipment, and orderly promoting the cascade utilization of product equipment and key components, it can not only improve the operational efficiency of the energy and power system, but also promote high-quality investment, promote the upgrading and transformation of the upstream and downstream of the power industry chain, and enhance the international competitiveness of the mainland's power equipment manufacturing industry. He said.
"Large-scale equipment renewal helps to improve the operational efficiency and stability of power equipment, reduce the failure rate, and ensure the reliability and safety of power supply. At the same time, the trade-in action will help promote technological innovation in the power industry, increase the proportion of clean energy, and promote green and low-carbon development. The implementation of recycling and cascade utilization actions can improve resource utilization efficiency and reduce energy costs. Improving relevant standards is conducive to standardizing market order, improving product quality, and providing strong support for the development of the power industry.
Wu Wei believes that equipment renewal and technological transformation require a large amount of capital investment, while the scale of equipment in related fields in the power industry is huge, and the cost of updating is relatively high.
In this regard, the Action Plan proposes to increase fiscal policy support. Eligible equipment renewal and recycling projects will be included in the scope of financial support such as investment in the central budget.
There is no doubt that with the introduction of the large-scale equipment renewal policy, the Action Plan will bring new market opportunities to the power industry.
CITIC Securities Research Report believes that the State Council has launched a large-scale equipment renewal plan to vigorously promote the renewal and technological transformation of production equipment, energy-using equipment, power generation, transmission and distribution equipment. The first is the transformation and construction of thermal power equipment, focusing on the needs of boiler tubes, etc.; the second is the upgrading and transformation of distribution network, focusing on the renewal and upgrading of low-efficiency distribution transformers and accelerating the energy efficiency upgrade of more medium and low-voltage equipment on this basis; the third is the energy-saving transformation of motors, focusing on inverters, etc.; and the fourth is the demand for smart meters under the intelligent goal of the State Grid.
Hong Yong, an expert at the think tank of the 50-person forum on the integration of data and reality in China, told reporters that the implementation of the "Action Plan" will drive the huge development space of the power equipment manufacturing and service market, including but not limited to the production, sales and upgrading and replacement services of new power generation equipment, smart grid equipment and energy storage facilities. At the same time, it will also catalyze a more complete circular economy market, such as second-hand equipment trading, scrapped equipment recycling, key parts remanufacturing and other fields will usher in new development opportunities.
Upstream equipment manufacturing and downstream applications are expected to benefit
Reducing energy consumption and emissions is an important direction of this round of equipment renewal policies, and electricity is one of the key industries for green and low-carbon transformation. The "Action Plan" mentions in the overall requirements that "promote the high-end, intelligent and green development of the industry".
"At present, the power industry in mainland China is undergoing a round of large-scale clean upgrading and green transformation process, which matches the high-end, intelligent and green development theme proposed in the Action Plan. To promote the implementation of the Action Plan is to take advantage of this thematic compatibility to solve a series of difficulties, including funding and demand. Wu Wei said.
For the focus of the implementation of the "Action Plan" in the power industry, Cao Zhe believes that it is necessary to strengthen policy guidance, increase capital investment, and support the research and development and industrialization of key technologies. At the same time, promote power equipment manufacturing enterprises, operators and scientific research institutes to strengthen cooperation and accelerate technological innovation. Establish and improve the recycling system and improve the efficiency of resource recycling. And improve the relevant regulations and standards to standardize the market order.
It is worth noting that as an important starting point for promoting investment and consumption in 2024, this round of large-scale equipment renewal will drive regional economic development.
In Cao Zhe's view, three types of cities have the basis for equipment renewal: first, cities with a good foundation for the development of new energy industries, such as wind power and photovoltaic equipment manufacturing, R&D, operation and maintenance, etc.; second, cities with strong scientific and technological innovation capabilities, such as high-level scientific research institutes and universities, which are convenient for promoting technology research and development and industrialization; third, cities with perfect policy support and supporting facilities, such as giving enterprises tax incentives, land use policies and other support, and strengthening infrastructure construction.
Wu Wei said frankly that with the implementation of the measures, the upstream equipment manufacturing and downstream application industries of the power industry will benefit. China's new energy equipment manufacturing industry is mainly concentrated in the Yangtze River Delta and Pearl River Delta regions. These regions have close economic ties and complete industrial chains. The implementation of the Action Plan can promote the coordinated development of industries within the region and enhance the industrial competitiveness and sustainable development capacity of the entire urban agglomeration or metropolitan area.
"China's lithium battery materials are mainly concentrated in Sichuan, Jiangxi and other provinces, and photovoltaic silicon materials are mainly concentrated in Yunnan, Inner Mongolia, Ningxia, Xinjiang and other provinces. By promoting the upgrading and efficient use of new energy equipment, the Action Plan will stimulate the growth of demand for upstream materials and bring new development opportunities to material suppliers. These regions can realize the transformation from a simple raw material supplier to a comprehensive service provider and increase the added value of the industrial chain by extending the industrial chain and improving the depth of material processing. He said.
In addition, China's Three North regions and the southeast coast have great potential for new energy power generation. Wu Wei believes that the equipment renewal and technological transformation measures mentioned in the action plan will directly promote the development of the field of new energy power generation. This means that new energy power generation projects such as wind power and solar power will be accelerated or upgraded to improve power generation efficiency and reliability, so as to make better use of the abundant local new energy resources.
■ Zhu Lina, a reporter from China City Daily