Markit lowered the global PV installed capacity forecast for 20 18 years from 1 13GW to 105GW. It is predicted that the increase of global demand will make up for the decrease of market demand in China, and the installed capacity will still increase by more than 20 17 years 10%.
In this context, as an important mode of photovoltaic sailing overseas, how can EPC projects avoid industry risks?
The threshold for "going out to sea" is lowered
In recent years, whether it is traditional electricity or new energy,
EPC project general contracting mode (that is, design, procurement and construction general contracting mode) is gradually increasing in the total amount of foreign contracted projects. Compared with the traditional construction contract mode, the project benefits are higher, but the risk coefficient is also greater. Only by improving and upgrading the management ability, technical level, financing strength and implementation experience can the contractor effectively implement the project and achieve the established project income target.
It is understood that China's foreign EPC projects have experienced the morphological evolution of various modes, such as labor export, EPC, EPC+F, and integration of investment, construction and operation. "The overseas EPC market has changed a lot in recent years, the conditions for cooperation are becoming more and more harsh, the contract price is getting lower and lower, and the risks are getting bigger and bigger. At the same time, EPC's own model is constantly innovating, and the business ecology has undergone great changes. " Song Yuxiang, a lawyer of Sunshine Times Law Firm, told the reporter.
In terms of laws and regulations, the biggest change in China's foreign contracted engineering industry in 20 17 is the cancellation of relevant laws and regulations at the national level. Enterprises want to contract projects abroad, and there is no qualification and threshold requirement at home.
"This is a double-edged sword. It is good news for enterprises that did not have relevant general contracting qualifications, but it also leads to SMEs' going out', which is more mixed and fierce, and may also lead to vicious competition. " Song Yuxiang analyzed that most projects in overseas markets adopt financing mode, followed by financing banks, which will review EPC contractors and cancel the threshold restrictions. Although it has a certain impact on the industry ecology, it will not cause subversive consequences.
In addition, there is another advantage. With the promotion of decentralization, the Ministry of Commerce revised the Measures for the Administration of Bidding (Bidding Negotiation) of Foreign Contracted Projects, changed the quasi-system to the filing system, and delegated the relevant authority to the provincial commerce authorities.
"After the' 531'New Deal, half a year is the callback stage of photovoltaic industry demand, and the global market demand brought by cost reduction has increased by at least 5%." Yi Zeng, head of Trina Solar's "product plus" value group in China, believes that projects that could not be done before, including Indian and Latin America, can now be put on the agenda. Some Guo Jin securities analysts believe that once the cost of photovoltaic continues to decline, many markets such as Europe, Latin America, the United States, Southeast Asia and the United Arab Emirates can also increase production.
EPC has a new trend.
"EPC is now showing a new trend of capital-driven projects." Song Yuxiang said that a few years ago, contractors only contracted, and now the trend is to "make money first." Now most of them are major projects with capital operation, including advance payment, mainly in Asian, African and Latin American countries. Usually, contractors in China need to finance their projects from banks in China. Similar situations have occurred in EPC projects in Pakistan, Bangladesh and the Philippines, and the owners require the advance payment to start before the financing deadline.
In another case, the EPC project is driven by equity participation, and the contractor shares 10%-20%. There are many such projects in Egypt. "Because the shelf life of photovoltaic projects is 25 years, EPC contractors will be required to be responsible for operation and maintenance at the same time." Song Yuxiang added that it is the trend of photovoltaic projects for contractors to undertake operation and maintenance at the same time.
"In the past, overseas wind power projects used financial leasing. In recent years, it has been gradually used to develop overseas photovoltaic projects. "
Song Yuxiang pointed out that in addition, there are more and more overseas acquisitions. "For overseas investment industries, overseas acquisition is not a new trading model, but for EPC enterprises, it is a new model, not necessarily short-term gains, but expanding platforms and laying out projects."
Increased market risk
During the interview, the reporter learned that the competition in the overseas EPC market environment is becoming increasingly fierce, even reaching a white-hot level. This kind of competition is reflected in the lower EPC contract price and IPP on-grid electricity price, as well as the shorter construction period.
A typical case in recent two years is 20 16. When Dubai Power and Water Supply Bureau and Abu Dhabi Future Energy Company formally signed the power purchase agreement for the third phase of the 800MW project in Dubai Photovoltaic Park, the transaction price was 0.299 cents/kWh, setting a record for the lowest photovoltaic price in the world at that time. In 20 17, the lowest bid price of a 300MW photovoltaic project in a province in northern Saudi Arabia was about 0. 12 RMB /kWh, which was a new low.
"If the IPP electricity price is low, the cost will be transferred to contractors and parts companies, and the profit margin will be lower and lower. Some contractors do projects for performance or even profit. " An industry insider who did not want to be named told reporters that this was a "terrible" thing.
It is understood that risk management and control ability is another weakness of photovoltaic EPC enterprises. The transaction methods and documents of overseas investment projects are complex, and some EPC enterprises have high debt ratio, insufficient financing ability and lack of overseas investment and financing talents, which leads to structural risks in the transformation of photovoltaic EPC enterprises to overseas investment.
"Foreign land is mostly private ownership, and it is difficult to acquire land. The local government generally has poor support and signs long-term contracts with the holders as much as possible. One of the most likely problems is equipment procurement. Many emerging markets are short of raw materials, so we should make preparations in the early stage. Many power companies are privately owned, and the price and damages should be discussed in advance. Most overseas projects must pass the trial operation at one time, and no adjustment time will be given. Quality must be guaranteed. " Peng Taijun, an employee of TV Beide, also talked about the risk control points of photovoltaic overseas projects.
In addition, the interviewees pointed out that the project standards in different countries are very different, and the policy risk and exchange rate risk also deserve repeated scrutiny and attention.