Bulletin: Guangdong Energy To Have Limited Tariff Gains

SINGAPORE (S&P Global Ratings) June 8, 2021--S&P Global Ratings today said Guangdong Energy Group Co. Ltd. (A-/Stable/--) could marginally benefit from a 31% increase in tariff on gas power generated in the province over the annual target. Meanwhile, the change in the Guangdong government's policy stance on this matter underscores the province's energy transition dilemma. Effective June 1, 2021, the Guangdong provincial government has raised the tariff on gas power from "9F" and higher turbines if the utilization hours exceed the yearly designated 3,500 hours. The tariff was increased to Chinese renminbi (RMB) 0.605 per kilowatt hour (kWh), from RMB0.463 earlier. With this, the government has effectively suspended the policy it introduced in August 2020 under which excess hours attracted

...June 7, 2021 SINGAPORE (S&P Global Ratings) June 8, 2021--S&P Global Ratings today said Guangdong Energy Group Co. Ltd. (A-/Stable/--) could marginally benefit from a 31% increase in tariff on gas power generated in the province over the annual target. Meanwhile, the change in the Guangdong government's policy stance on this matter underscores the province's energy transition dilemma. Effective June 1, 2021, the Guangdong provincial government has raised the tariff on gas power from "9F" and higher turbines if the utilization hours exceed the yearly designated 3,500 hours. The tariff was increased to Chinese renminbi (RMB) 0.605 per kilowatt hour (kWh), from RMB0.463 earlier. With this, the government has effectively suspended the policy it introduced in August 2020 under which excess hours attracted lower tariffs. We expect the incremental EBITDA for Guangdong Energy from the policy change to be modest. This is because the company's gas-power fleet (mostly 9Fs) operates within the yearly...

Bulletin