CGN New Energy (HK01811) In-depth Analysis of Curtailment Risk Response Strategies

Current China’s new energy power generation industry is facing severe absorption challenges. According to authoritative data, in 2024, the national wind power and photovoltaic utilization rates were 95.9% and 96.8% respectively, down 1.4 and 1.2 percentage points year-on-year [2]. More worryingly, in May 2025, this indicator further deteriorated: wind power utilization rate dropped to 93.2% and photovoltaic utilization rate to 94.2% [2].

• In 2024, due to increased curtailment year-on-year, the average wind power utilization hours decreased by approximately 3.1%
• The average photovoltaic utilization hours decreased by approximately 16.8%, a significant drop [3]

This trend reflects that the growth rate of new energy installed capacity continues to be higher than the growth rate of electricity demand, and the grid’s absorption capacity is under increasing pressure.

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Indicator	Value	YoY Change
Revenue	USD 856.5 million	-12.8%
Profit Attributable to Equity Shareholders	USD 163.5 million	-10.9%
Earnings Per Share	3.81 US cents	-10.9%

The performance decline was mainly affected by two factors: ① Reduced electricity prices and generation volume of Korean projects; ② Falling electricity prices of Chinese solar projects [3].

Type	Installed Capacity (10,000 kW)
Wind Power	2,284
Photovoltaic	1,414
Cogeneration	4,163
Hydropower	3,996

The company’s business layout covers wind power, photovoltaic, cogeneration and hydropower, forming a diversified clean energy portfolio [1].

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Over 90% of the company’s overseas projects have signed long-term Power Purchase Agreements (PPA), effectively hedging against electricity price fluctuations and absorption risks in the domestic market [1]. This strategy ensures a stable cash flow source and reduces the uncertainty of market-oriented transactions.

The company actively expands into cogeneration and hydropower businesses. These types of power sources have the characteristics of flexible scheduling and strong controllability, which can provide stable support when new energy output fluctuates. In 2024, cogeneration installed capacity reached 4,163 ten thousand kW and hydropower installed capacity 3,996 ten thousand kW, forming a “wind, photovoltaic, hydropower, and cogeneration” multi-energy complementary pattern [1].

The company continues to seek investment opportunities in overseas markets such as South Korea and Southeast Asia. The second phase of the South Korea Daesan 55.70 ten thousand kW gas project is under construction. The overseas controlled installed capacity includes diversified power sources such as 152.37 ten thousand kW gas and 50.70 ten thousand kW oil-fired [1]. Overseas projects not only bring incremental revenue but also effectively diversify policy risks in a single market.

As of the end of 2024, the company’s construction projects are mainly clean energy with a large under-construction scale. With the commissioning of under-construction and reserved projects, the power generation capacity will be further improved [1]. The company reduces unit costs through large-scale development and enhances overall competitiveness.

The company strengthens communication and coordination with national authorities, local governments and power grids to reduce external load shedding, and strives for favorable power generation arrangements and more grid-connected electricity [1]. At the same time, it actively develops high-quality market users to promote full and more generation of units.

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Strategy	Effect Score	Implementation Difficulty	Priority
Long-term Power Purchase Agreements	High	Low	★★★★★
Diversified Layout	Medium-High	Medium	★★★★☆
Overseas Market Expansion	Medium-High	High	★★★★☆
Energy Storage Technology Application	Medium	High	★★★☆☆
Flexible Dispatch Optimization	Medium	Low	★★★☆☆

1. Differences in new energy market entry rules across regions may affect the certainty of project returns [2]
2. Power supply and demand and primary energy price fluctuations will affect electricity price levels [2]
3. There is uncertainty in the pace of alleviating absorption issues; curtailment problems in some regions are difficult to solve in the short term [2]

CGN New Energy has strong competitiveness in capital strength, resource acquisition and project development due to the background advantages of its parent company China General Nuclear Power Group. Through strategies such as long-term agreements to lock in revenue, overseas market expansion and diversified layout, the company has effectively hedged against domestic new energy absorption risks. Investors are advised to pay attention to the progress of the company’s overseas projects and the valuation re-rating opportunities brought by the domestic new energy market-oriented reform process.

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The above chart shows the core analysis framework of CGN New Energy to address curtailment risks, including:

• Industry background of continuous decline in new energy generation utilization rate
• Company’s diversified installed capacity structure to diversify risks
• The extent to which wind and photovoltaic utilization hours are affected by curtailment
• Effectiveness evaluation of each response strategy

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[1] CCXI - CGN International Co., Ltd. 2025 Annual Follow-up Rating Report (http://qxb-pdf-osscache.qixin.com/AnBaseinfo/c572e11b3d3cd2845f47c95205b868e3.pdf)

[2] Soochow Securities - New Energy Fully Enters the Market: Three Suppressive Factors Released, Green Power Reverses (https://pdf.dfcfw.com/pdf/H3_AP202507181710804556_1.pdf)

[3] CGN New Energy - Interim Results Announcement for the Six Months Ended 30 June 2025 (https://stockn.xueqiu.com/01811/20250819000800.pdf)

[4] National Energy Administration - Has the Utilization Rate of Green Power in the West Reached an Inflection Point? (https://www.nea.gov.cn/20250704/a6080a306a14481588b887f3db1788c3/c.html)