Solid Opening to CSG 13th Five-Year Plan;2016 Electricity Sales Top 6.1%

Guangzhou - The Fifth Session of the Second China Southern Power Grid (CSG) Staff Representative Congress & the 2017 Working Conference was recently held here in Guangzhou.

Company officials announced to media representatives that several significant breakthroughs have been made by CSG during Year 2016 which served as a solid foundation of the CSG 13th Five-Year Plan Period.

During Year 2016, CSG electricity sales:

-        Outperformed the expected growth rate;

-        The company’s operating performance was rated as “A” by the State-owned Assets Supervision and Administration Commission (SASAC) for the 10th consecutive year, and

-        CSG was ranked 95th among the Fortune Global 500 enterprises, entering into the Top 100 for the first time.

In 2017, the goals of CSG senior management are to continue seeking domestic and international company growth.

By implementing supply-side structural reform and with services centered around the strategic goal of “building CSG into a world-leading power grid company featuring sophisticated management exceptional services, outstanding performance and excellent brand management ” while meeting all “185611” development objectives, the CSG senior management team is pledged to press forward with the company’s business transformation, conforming to its development construction of “focusing on main grid business, developing comprehensive energy services and finance and making breakthroughs in the international market” while making every effort to develop itself into a strong, customer-oriented company.

2016年实现“十三五”良好开局

Solid Start for CSG in the 13th Five-Year Plan Period

In 2016, China’s economy was characterized by a slowing but steady forward progress, along with important structural changes. Facing an all-new and challenging external business environment, CSG accomplished 829.7 TWh of electricity sales in 2016, up by 6.1%, which outperformed the company’s expected growth rate; the highest load of the entire electric grid reached 150GW, with a year-on-year growth of 4.1%; fixed asset investments achieved RMB102.2 billion yuan, a marked increase of 22.6%.

In addition, China Southern Power Grid continues to fulfil its mandate of serving as a major platform for the optimized distribution of electrical resources as the amount of electricity transmitted from the West to the East hit a fifth consecutive year record high.

Moreover, by establishing a trans-provincial power trade mechanism in Year 2016, 16.5TWh of surplus hydropower from Yunnan Province has been utilized, thus contributing to a “’greener’ natural environment of blue sky, clean water and lush mountains”.

In 2016, China Southern Power Grid - a vital Chinese state owned enterprise - comprehensively carried out the national 13th Five-Year Plan Outline and the national development plan on electric power.

Under the strategic goal of “building CSG into a world-leading power grid company featuring sophisticated management, exceptional services, outstanding performance and excellent brand” (as well as the “185611” development objective), CSG senior management devoted substantial efforts into strengthening its core business by consistently taking more than 30 key preventive measures to counter potential operational risks to the main power grid.

Safe and stable operation of the complex power grid during periods of natural disasters, including Typhoons Nida, Sarika and Haima were successfully managed.

Also, CSG optimized its grid structure, established asynchronous interconnections between the main electric grid and the Yunnan grid, and completed (as well as put into production ahead of or on schedule) seven key projects including:

-        The Jinzhong DC power transmission project;

-        The Yongren-Funing DC power transmission project and

-        The Qingyuan pumped-storage power station project.

The average black-out duration across the whole covered area of CSG was 22.3 hours per household, 7% shorter than that of the previous year, and the annual average black-out duration for downtown areas was only 4.6 hours, decreased by 7.6%.

In addition, CSG scored 79.5 in the customer satisfaction assessment, conducted by a third party, up 0.5% on a year-on-year basis.

Mr. Li Qingkui, Chairman of China Southern Power Grid said, “under the strong leadership of President Xi Jinping, in order to serve China’s overall development, CSG over the past year has complied with the trend of the times, earnestly pushing forward its work and achieved a rousing start for its 13th Five-Year Plan, thus doing its part for the social-economic development of five key provinces in Southern China”.

2017 Will See Comprehensive/In-depth Reform

2017 marks a very important year in the implementation of the 13th Five-Year Plan, a year marked by the deepening of the company’s supply-side structural reform. As Chairman Li Qingkui highlighted during the conference, “CSG will hold fast to its structural progress by maintaining its critical electric grid while maintaining stability for its millions of customers throughout five Southern Chinese Provinces”.

Taking supply-side structural reform as its main task and centered around the strategic goal of “building CSG into a world-leading power grid company featuring sophisticated management exceptional services, outstanding performance and excellent brand” (as well as the “185611” development objective), CSG, led by its corporate culture as found in the CSG General Program, will drive comprehensive reform; advanced by sophisticated management as it continuingly transforms itself under the development layout characterized by “focusing on main grid business, developing comprehensive energy and finance, and making breakthroughs in the international market”.

These and other important engagements will allow China Southern Power Grid to continue improving its customer-focused performance.

CSG will continue enhancing its operating capabilities, international competitiveness and risk prevention capacity, so it may present exceptional results to the Party’s 19th National Congress.

As for the agenda of Year 2017, Mr. Cao Zhi’an, President of CSG, put forward seven key items while urging all staff members to accomplish their individual and group efforts; namely, maintaining growth, promoting reform, adjusting the company’s business structure and avoiding risks as CSG benefits the livelihood of its millions of customers.

During Year 2017, CSG plans to achieve:

-        854.5TWh of electricity sales by the close of calendar year;

-        Transmit 181.2TWh of electricity from the West to the East;

-        Decrease the annual average black-out duration to 3.9 hours per household, and

-        Score an “80” in its customer satisfaction, third-part assessments

In 2017, CSG is pledged to further deepen its reform in accordance with arrangements made by the Party Central Committee on the reform of State-owned Enterprises and Power System.

China Southern Power Grid will earnestly boost the pilot reform project of power supply in Shenzhen by building a business pilot program of mixed ownership enterprise of newly established distribution power grid and expedite the establishment of a sound power transmission and distribution price mechanism to comprehensively carry out price reforms across the entire grid that spans five southern provinces.

CSG will also promote building an orderly power market, in which obligations of trading institutions and synergy mechanisms will be optimized so that trading institutions will be given full play to serve as a platform for raising market efficiency, reducing trading costs and boosting clean energy consumption

China Southern Power Grid plans to enhance its communication and coordination with the governments of the five provinces, encourage trading among provinces and regions, and take advantage of the surplus transmission capacity to the greatest extent, so as to fully exploit the hydropower originating from Yunnan Province.

Additionally, CSG will offer premium universal services, basic services and equal access to the electric grid in a market-oriented environment by establishing a contract mechanism of basic services and a security system of power-supply services that is compatible with the open electricity market.

In 2017, CSG will also continue to focus on offering green low-carbon services, vigorously pushing forward the electrification project by developing EV charging demonstration sites in 17 key cities including Guangzhou and Shenzhen.

CSG will promote:

-        The construction of the 8GW DC project which transmits electricity from Wudongde station to Guangdong and Guangxi Provinces;

-        Ramp up the construction of the Dianxibei DC project which transmits electricity from northwest Yunnan Province to Guangdong Province, and

-        Place into operation and propel the commissioning of the first power unit at Shenzhen Pumped-Storage Station and finish the installment and debugging of the power unit at Hainan Pumped-Storage Station.

CSG will additionally accelerate the completion to the upgrade and transformation of rural power grids in small towns and key villages, so as to improve the power supply quality to rural areas, enhance power supply reliability and remove the bottleneck of insufficient power supply in relatively fast-growing areas.

Furthermore, CSG will further develop the planned Vinh Tan Coal-fired Power Plant BOT project PhaseⅠand the Nam Tha 1 Hydropower Project.

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