The "14th Five-Year Plan" offshore wind power plan is full, and the submarine cable market is growing rapidly, with an average annual compound growth rate of 56.89% in the next three years!
Cinda Securities made assumptions about Haifeng’s installed capacity, cost and submarine cable cost ratio during the 14th Five-Year Plan period, and calculated that the submarine cable market size will grow from 9.056 to 34.974 billion yuan from 2022 to 2025, with an average annual compound growth rate of 56.89%. At the same time, submarine cable companies led by Dongfang Cable, Zhongtian Technology, and Hengtong Optoelectronics account for 90% of the market share, and have scientific research and project delivery experience in ultra-high-voltage AC and flexible DC submarine cables, directly benefiting from The industry is “rising”.
1) The space for the growth of sea wind is vast, and the "14th Five-Year Plan" of major coastal provinces attaches great importance to offshore wind power.
my country's offshore wind resources show an increasing trend from north to south. Among them, the average annual wind speed in the areas north of the Yangtze River is around 7m/s, such as Liaoning and Hebei. The wind speed in Shandong Province is 7.4-7.6, 6.3-7.5, 6.9-7.8m/s. The wind speed in Jiangsu and Zhejiang is higher than that in the northern provinces, reaching 7-8m/s. The wind speed in Guangdong Province is 6.5-8.5m/s. Fujian Province has the best wind resources, with wind speeds of 7.1-10.2m/s. Judging from the utilization hours of and , Fujian Province has the best utilization hours, up to 3800 hours, followed by Guangdong Province (2000-3000 hours), Jiangsu and Zhejiang Provinces with utilization hours of 2300-2800 and 2000- 2600 hours, the utilization hours in Shandong, Hebei and Liaoning provinces are relatively low.
Consider the growth potential of sea breeze during the "14th Five-Year Plan" from three dimensions
① A new round of sea breeze unit bidding will be launched in the second half of 2021. In September 2021, China Resources Power Cangnan 1# offshore wind power project launched the first wind turbine bidding after sea wind parity, and then the pace of sea wind unit bidding continued to accelerate. On the one hand, the current lowest bid price is 3,548 yuan/kW (including tower) for Zhejiang Energy Taizhou No. 1 offshore wind power project, which has dropped significantly compared with the 5,000-6,000 yuan/kW before parity; on the other hand, the continuous bidding of units It has shown that the owners are enthusiastic about investing in Haifeng.
②Haifeng project has abundant reserves. The Haifeng project takes 3-4 years from the initial wind measurement to the final grid-connected installation. The early project reserves provide a certain guarantee for the subsequent installed capacity. According to the key projects and competition announcements of each province, 53.07GW of projects are currently under construction or in reserve in Guangdong, Jiangsu, Zhejiang and other provinces.
③ In the long term, the coastal provinces’ new offshore wind power plans during the 14th Five-Year Plan will reach 44.30GW, with an annual average of 8.86GW, which is a significant increase from the average annual installed capacity of 1.69GW during the “13th Five-Year Plan” period.
Starting from 2022, as offshore wind technology and experience mature, the cost of wind turbines, submarine cables, basic platforms, etc. will decrease, which is expected to improve the profitability of operations. Cinda Securities predicts that offshore wind power is expected to usher in a period of rapid growth during the 14th Five-Year Plan.
2) Benefiting from the development of offshore wind power, the submarine cable market is growing rapidly
Submarine cables are an important part of offshore wind and power project construction and are responsible for transmitting power to the onshore power grid. Submarine cable products are mainly divided into submarine optical cables , submarine cables and submarine photoelectric composite cables by function. In recent years, benefiting from the large-scale development of offshore wind power, the market size of submarine cables has continued to increase. According to GWEC data, the global newly installed offshore wind power capacity increased from 1.50GW to 6.90GW from 2014 to 2020, with an average annual compound growth rate of 28.96%. From 2014 to 2020, my country's newly installed offshore wind power capacity increased from 0.23GW to 3.06GW, with an average annual compound growth rate of 28.96%. The compound growth rate was 53.93%.
According to the current clear offshore wind power planning statistics of coastal provinces, Guangdong, Jiangsu, Zhejiang, Shandong and other coastal provinces have newly installed sea wind capacity of 44.30GW during the 14th Five-Year Plan, and the average annual installed capacity is as high as 8.86GW, which is higher than that during the 13th Five-Year Plan. "The average annual installed capacity has increased significantly to 1.69GW. Cinda Securities made assumptions about Haifeng's installed capacity, construction cost and submarine cable cost ratio during the 14th Five-Year Plan period, and calculated that the submarine cable market size will increase from 9.056 to 34.974 billion yuan from 2022 to 2025, with an average annual compound growth rate of 56.89%.
3) The submarine cable industry has high barriers and strong growth potential, and related companies have entered a new round of expansion period.
The submarine cable industry has high barriers:
① Qualification certification barriers: Domestic submarine cables generally need to spend more than one year before being put into use. Time to complete type testing and pre-qualification testing.
② Technical barriers to production: Submarine cables operate in a complex environment, which requires higher material selection, structural design, production technology, and quality control. In addition, ultra-high voltage or flexible straight solutions have put forward higher requirements for submarine cable companies' production technology experience and soft joint technology. Companies with relevant achievements in the past are expected to quickly enter the ultra-high voltage and flexible straight submarine cable market. Get a higher share.
③Equipment, terminals and financial barriers: The construction of VCV tower cross-linking production lines, terminal development and construction, and acquisition of laying ships are necessary for enterprises engaged in the production and sales of high-voltage submarine cables; Dongfang Cable's new production capacity base cost 1.505 billion yuan, and investment recovery The period of lasted for 7.47 years.
Submarine cable companies headed by Dongfang Cable, Zhongtian Technology, and Hengtong Optoelectronics occupy 90% of the market share, and have experience in scientific research and project delivery of ultra-high-voltage AC flexible DC submarine cables. The second echelon ( Baosheng Co., Ltd. , Han Cable Co., Ltd. ) and the third echelon (Wanda Submarine Cable, Sun Cable , Qifan Cable) have a smaller share and mainly participate in the 35-220kV market competition. With the rapid growth of Haifen during the "14th Five-Year Plan", the three types of enterprises have entered a new round of expansion period, concentrated in Guangdong, Shandong, Jiangsu, Zhejiang and other provinces.
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