According to the Zhitong Finance APP, Tianfeng Securities released a research report stating that due to the competitive advantages brought by the commercial model of complementary hydropower and wind power, the integrated project of Yalong River Hydropower Company may have good profitability. The company's existing hydropower projects can provide sufficient stable funding support for large-scale project development, and the company's profit space may have significant growth potential. It is recommended to pay attention to SCTE (600674.SH) and SDIC Power (600886.SH). The fundamentals of hydropower are not expected to change significantly by 2025, mainly depending on changes in the external environment and the expected return levels of incremental market funds. It is suggested to pay attention to CYPC (600900.SH) and others.

The main viewpoints of Tianfeng Securities are as follows:

Is the integration of hydropower and wind power: 1+1>2 valid?

The "complementary hydropower and wind power" power station utilizes the regulation performance brought by the reservoir capacity of hydropower stations and the rapid start-stop characteristics of hydropower units to smooth out the random fluctuations of photovoltaic output, equivalent to virtual hydropower, ultimately delivering smooth and stable clean electricity to the grid, enhancing the grid's capacity to accept large-scale wind and solar power.

Prerequisites for the construction of complementary hydropower and wind power stations: ① There must be abundant new energy resources in the basin, with good topographical conditions and concentrated site distribution; ② The hydropower station used for complementary operation should be located close to the photovoltaic station and have the electrical conditions for photovoltaic station access; ③ The hydropower units should have suitable reservoir regulation conditions and the ability to regulate photovoltaic output.

Hydropower supports wind and solar power with capacity: In the short term within a day, hydropower units can smooth out fluctuations in wind and solar output; over a longer time frame within a year, wind and solar output can complement hydropower output; wind and solar power support hydropower with electricity: Hydropower gains stronger peak regulation capability due to its combination with photovoltaic power.

Nationally, complementary hydropower and wind power bases include the Yalong River Basin, the upper and lower reaches of the Jinsha River, the upper reaches of the Yellow River, and the Lancang River integrated clean energy base.

Quantitative Analysis - Taking Yalong River as an Example

The Yalong River hydropower and wind power integration base currently plans to layout four hydropower and wind power project clusters: Lianghekou, Yazhong, Jinguang, and Ertan, with a planned installed capacity of 78 million kilowatts, including 39 million kilowatts of hydropower and pumped storage, and 39 million kilowatts of wind and solar new energy, with plans to complete all by 2035.

The total investment for the first phase of the Kela photovoltaic power station is 5.34 billion yuan, with an estimated capital of about 1.07 billion yuan based on a 20% capital ratio. According to existing financial data, it is roughly estimated that under the condition of not considering profit fluctuations, the annual cash flow of the first phase of the Kela photovoltaic power station is about 410 million yuan, and the payback period for the capital is about 2.6 years.

Can the integration of hydropower and wind power recreate a Yalong River? Can its own cash flow support development?

According to statistics, Yalong River Hydropower Company currently has a total installed capacity of about 16.071 million kilowatts for projects under construction, planned, and in preparation. If the future construction costs of Yalong River wind and photovoltaic projects are reduced to 80% and 50% of the current levels, the corresponding capital investments would be approximately 69.94 billion yuan and 58.07 billion yuan, respectively, with an average annual investment requirement of about 5.81-7.79 billion yuan (not considering changes in development pace). Considering the annual cash dividends of about 5 billion yuan and the additional investment amounts of about 2 billion yuan from SDIC Power and SCTE, the actual cash flow available for expansionary capital expenditures in the company has been over 6 billion yuan in the past two years If the future wind and solar projects of the Yalong River can significantly reduce costs, the company's own cash flow will basically be able to cover the annual capital expenditure requirements.

Risk Warning: Water inflow is less than expected, policy advancement is less than expected, hydropower investment, electricity price fluctuation risks, etc