of all, the Director of the Board and the President of the company, Mr. Zhao Ping, will review the business performance for the interim results of 2021, followed by QA session. May we have the honor to invite Mr. Zhao to review the business performance and Mr. Liu Qingyu will conduct the English interpretation.
Ladies and gentlemen, good afternoon. Welcome to Tianzi Interim Results Conference Call of Huanan Power International. The company has announced its interim operating results. In the first half of the year, the company grabs the opportunity of the economic stable recovery and high power demand and promote key tasks of operation and development. Under Chinese accounting standard, the company achieved consolidated operating revenue of RMB95.116 billion increasing by 20.17 percent year on year.
The net profit attributable to equity holders of the company amounted to RMB4 point 282,000,000,000 decreasing by 25.3 percent year on year. The company's earnings per share was 0.21 In the first half of the year, the massive power sales of the company was 207.926000000000 kilowatt hour increased by 20.8%. Average utilization hour was 19 80 hours increased by 2 62 hours. The power generation increased significantly due to the rise in the power demand of the whole society. Of the 26 regions in which company operates, 22 regions have achieved positive year on year growth in power generation, among which 10 regions have increased more than 20%.
Domestic power sales of the low carbon clean energy increased by 48.8%. In terms of the fuel, in the first half of the year, the contradiction between supply and demand intensified and coal prices have risen sharply. The company actively studied and responded to the market trend, make flexible adjustment to our procurement strategy, increase the honor rate of long term contract coal, use the supplementary supply of imported coal, expanded the high quality coal sources and ensured the safe and stable supply of thin coal. Although the coal price increased sharply, the company procurement cost is at leading level in the industry. In terms of development, the company accelerates the transformation and upgrading, continues to develop clean energy projects and promote permitting and filing process.
In the first half of the year, the company has put 4 70 megawatts of wind units, 190 megawatts of solar energy and 30 megawatts of biomass units into operation. The company's total controlling in store capacity reached 114 gigawatts. The low carbon cleaning units account for 21.07% increased by 2.9 percentage point. At the same time, the company optimized its thermal power generation by promoting flexibility retrofit, super low emission and heat supply renovation, sludge and biomass coupling generation projects. The company actively promotes technological innovation, construction of smart power plants, transforms and upgrades existing coal fired power assets and help build a new power system.
In terms of financing in the first half of the year with the market opportunity of abundant liquidity and the government support in Green Finance, the company issued China's 1st batch of carbon neutrality bonds in interbank market totaling RMB3.5 billion, corporate bonds of RMB7.8 billion and super short term debt of RMB13 1,000,000,000 which ensured the low financial cost and funding needs and help with company's clean energy development. Moreover, the company used US600 $1,000,000 exchange rate swaps to effectively hedge the risk of exchange rate fluctuation in Tuohus Power's debt. In the second half of the year, while seeking progress and maintaining stability, the company will implement innovative green safe development and operational excellence. We will adhere to the concept of safe development and strengthen the management and control of key risks area. We will continuously develop clean energy projects and promote energy conservation, transformation and upgrading for coal fired units under the goal of carbon peak and carbon neutrality.
We will actively participate in the power market reform and be profit centered focused on marketing management. We will respond to the coal market trend and take multiple measures to control the coal price and ensure the supply. We will actively participate in the carbon market trading and expand our financing channels to control the financial costs. The company will enhance the competitiveness and create long term stable and growth return to our shareholders. Next my colleague and I are glad to answer your questions.
Thank you.
The first question is from investor whose cell number is 7,530. Please go ahead. Thank you.
I have three questions. My first question is about the coal inventory. As we all know in August, the coal price reached a very high level and the price stayed relatively high for both imported coal and for the seaborne coal. So for how many days can the company's inventory of coal be used? My second question is about the carbon trading market.
So could you please tell us the numbers of the carbon allowance of the company during the year 2019 to 2020? And what is the company's expectation about the current price and also the transaction volume in this year's carbon market? And will there be a fine if some top plans exist exceeding the carbon allowance? My third question is about renewable development. So how does the company consider the renewable projects in the future?
Was the company decided by time period of 1 year, 3 year or 5 years? By the end of June, the company had total coal inventory of 10,610,000 tons. It can be used in 14 days. And although our inventory is decreasing comparing to the high level, we still can ensure the safety supply of our coal and the company is actively promote all resources to ensure the supply. As for the company's response to the high coal market, the company have following measures.
1st is to increase the resource development, ensure the honor rate of long term contract coal and optimize our procurement structure. 2nd is to seize the market chance and give full play of the company's price advantage of imported coal, lock high quality coal at source. And 3rd method is to use companies and Huanan Group's industrial chain to ensure the supply. And 4th is to actively respond to government authority and seek for policy support. So in the first half year, we can see the coal supply and demand both growth, but the supply demand supply growth is lower than the demand growth.
And in the second half year, we can see that the mass risk policy will be adjusted to stable to be more stable and micro economy is expected to be improved. The power consumption will increase. The hydropower output will decrease due to the dry season. The thermal power demand will increase to fill in the gap. The coal consumption will maintain at a high level.
And currently, there's still a tight supply with strict safety and environmental inspection, but the coal price has attract great attention from the government. The government will take multiple measures to stabilize the price. And under the policy regulation, the price will be stable and decrease with the supply increase in the near future. But the actual coal price will still be determined by the policies as well as the demand and supply situation. That's all.
Thank you. Let me answer your question about the carbon trading market. First about the supply whether the company have a surplus of the carbon allowance. For now, the carbon calculation hasn't been accomplished yet. The government have planned that by the end of September, they will allocate those allowance of carbon.
So by the end of September, the company can know whether the company have a surplus or less of this carbon allowance. So according to our calculation of the carbon emission, we estimated that as a Huaneng as a group, we have surplus in our carbon allowance. But for now, the government haven't released the carbon allowance for each company. So we'll give out those numbers in the future. About the carbon price, although the national carbon market's average price is higher than the average price of the pilot areas, it doesn't represent that the carbon market the high price in the carbon market will be the trend in the future, because the government have only released the carbon bidding market that we can see from the trading board, but the government haven't released the commodity the carbon commodity price is not being included in our calculation.
We estimate that the government will have a total allowance that be less than the production company the power production company's total emission. There won't be a surplus, but we cannot exclude the possibility that the power companies using method to reduce their carbon emission and turning this less carbon allowance to a surplus. So there is still uncertainty in the carbon market demand and supply situation. About the transaction volume in the future, although the settlement will be done in the near future, there's still not enough carbon quotas that's released into the market, because the carbon allowance is can be settled in the 2nd year. So there might be some companies that they won't sell in this year and see the further price change in the market.
So it's hard to say about the transaction volume. So those is the situation analysis for this year. And in general, there's still some uncertainty in the market. But Huaneng is in the leading level in the industry. So we are confident about the carbon market trading and believe we can profit from this market.
The company is actively promoting renewable energy development. The company planned to add 8 gigawatts per year in the next 5 year during the 14th 5 year plan. By the end of 2025, the company plan to increase the capacity of renewable energy by 55 gigawatts. The company will set each year's goal according to the real situation. And in 2021, the company have a goal of 8 1,340 Megawatts of Renewable Energy added.
In 2021, the PV module has increased sharply the price of PV module has increased sharply. It has a very limited impact to the company's project that already been through the purchasing process. But some of the company projects is still affected by this increase in price and maybe delayed and postponed of the operation date. In general, there won't be a great impact to the company.
The next question is from Li Shang of Chongqing, Chongqing. Please go ahead. Thank you.
I have 3 questions. My first question is about the company's profit. Could you please give us the profit breakdown to different energy sources? My second question is about the coal price. So what is the company's average standard coal price in the first half of the year?
And my third question is about the inventory. You just said the inventory for the for now is 14 days. And what is the number for the same period last year? First, I'll give you the number about the company's profit breakdown. The total profit of the company was KRW4.822 billion And for the coal sector, it was RMB1.48 billion.
For the gas sector, it was RMB598 1,000,000. For the wind sector, it was RMB2.515 billion. The solar sector, it was RMB331 million. For the hydro sector, it was RMB20 1,000,000. And for the biomass sector it was negative RMB29 1,000,000.
The unit cost of coal fired units was RMB 791.43 per ton. The standard coal price for the 2nd quarter was KRW 821.01 per ton. 10 years number of coal price, we'll give it later after the meeting. And about the inventory, in the same period last year, the company have 12 900,000 tons of coal inventory and it can use by 17 days. So this year, we have a decrease in the coal inventory.
As for the coal price at the end of June, the company's coal price is in line with the index price from the spot market.
The next question is from Yihong Huang of Haitong Zhong Zhong. Please go ahead. Thank you.
I have 3 questions. My first question is the number you gave us before about the profit breakdown is that the number of profit before tax or net profit? The second question is about the tariff. What is the company's average tariff for thermal sector and coal sectors? And what is the year on year change?
And what is the company's view about for some provincial government they have raised the benchmark tariff. So what is the company's view about the average tariff in the future? And my third question is about the imported coal. So what is the company's imported coal proportion? And what is the price spread between the imported coal to domestic coal?
The previous number we gave is the net profit breakdown. And if you ask for the profit before tax in the MAX business, we have a total profit before tax of RMB5.94 billion. And for the coal sector, it was RMB2.234 billion. For the gas sector, solar sector, it was RMB 3 56,000,000. For the hydro sector, it was RMB 22,000,000.
And for the biomass sector, it was negative RMB 29,000,000. The average tariff for the thermal power of the company was KRW391.92 per megawatt hour increased by 0.42%. The company have total in total purchase imported co of RMB29 1,000,000 in the first half of year. It accounts for 30.3 percent of the company's total co procurement. And in the second quarter, the company's imported co accounts for 31% of the company's total co procurement.
In the first half of the year, the imported coal have a JPY175.4 per tonne discount comparing to the domestic coal. And we don't have number in the Q2, but I'll give you the number in each month. In January, the imported coal has a discount of 333.74 per tons discount. In February, the discount was rmb30.46 per tonne in March rmb59 per tonne in April rmb174.9 per tonne in May, rmb 230 per tonne in June, rmb119.5 per tonne. About the coal price at the end of June, because the coal price is very complicated.
We have inland coal and seaborne coal that not have the same trend. And we use the port price as a representative. The 5,500 Kcao coal in the port price by the end of June the price was RMB960 per ton. That's the end of the question. Thank you.
Steven, Next question is from Stephen of Morgan Datong. Please go ahead. Thank you.
I have three questions. My first question is what is the reason for the national carbon market's price lower than the pilot market price? The carbon price in the national market was about RMB50 comparing to the RMB30 pilot areas. And what is the company's expectation of the carbon price trend during the 14th to 5 year plan? My second question is about the coal price impact to the impairment.
The coal price has increased dramatically. And will that be a great impact to the company's impairment decision by the end of the year? And my third question is also about the carbon market. So the government's allowance of the carbon market may be shrinking in the future. And what is the profit impact to the company?
And will the company have any goals or guidelines for the reduce of carbon intensity in the future? About carbon price higher than in national market than in the pilot market, actually the national market the carbon price in national market is not the highest. The carbon price in the pilot area in Beijing is higher than RMB50 and the carbon market is also relatively high in the pilot area in Shanghai. And the RMB30 per ton price is only the average price of the pilot areas. And the price is very difficult to say the future trend because the price is market oriented.
In the 1st day of trading, it can be very important for some of the power generating groups. So they actively involve themselves in this market. So that might be one reason for that. But the whole price trend is very hard to say. So about the second question and third question, they have some similarities.
And for the price trend expectation, the core problem of this expectation concerns with the coal the carbon emission price as well as its trading volume. So the carbon price also determined by the relationship between the demand and supply. From the supply side, supply is consists of the carbon quota located to each company and also the CCR. From the supply side, of course, the direct impact is from the carbon emission. But there are still other factors that can contribute to the supply.
One is for the power consumption. Another is the structural reform and transformation from the power generating side and also the thermal power propulsion in the whole power market. There are still other factors that bring uncertainty to this market. First is when will the government restart the trading of CCR? And second is, what is when will other industry be included in this market?
And third is, when will the financial cooperation be included in the market? So the market still face great uncertainty. But we can see in the future there are certain trend in this carbon market. The government will decrease the carbon allowance in the future, especially the free allocation of the carbon quota will be decreased in the future. And the allocation the allowance that the government charged for a fee will increase in the future.
And the company have awareness of this trend and the company will take further measures to respond to this market change. 1st is to make structural adjustment in our power generation. The company will increase the renewable energy capacity as well as the renewable energy generation in the future. And second is the company will actively participate in the market building of the carbon market in the future. That is to actively respond and report to the government to involve ourselves in the positive decision making process.
So the company will optimize our structure and reduce our carbon cost in the future. That's all. Thank you. About the relationship between the coal price fluctuation and the company's impairment decision, the coal price fluctuate in the short to medium term, but the company will make impairment decision according to the coal price change in the long term. In the future, the company will actually follow-up with the price change in the core market and actively studied and the research for the impairment signs and making appropriate accounting impairment in accordance with the accounting standards.
The next question is from Ryotani of CICC. Please go ahead. Thank you.
I have two questions, all related to renewable energy. The company has announced that 8 gigawatts plan in this year's renewable energy capacity. So for wind power and solar power, what would be the proportion of each power sectors? And what is the company's project reserve that have already signed the contract? And also what is the company's project reserve for the project that has already been through the permitting process, but haven't been constructed yet?
And also, Huanan Power International is the offshore wind platform for the group. And could you please tell us the subsidy policy in Jiangsu about the offshore wind power? Is there any policy related with the feed in tariff? And if there is no policy released yet, what will be the company's plan for the whole year's offshore wind capacity? Were the company still going to develop those projects?
Or will the company postpone those project construction? And my second question is about the capacity reserve revenue for the company. So as we know the renewable energy may have some cost in the capacity reserve subsidy and the thermal power may have some revenue. So what is the net revenue for the company? According to the company's plan in the beginning of the year, the company in total had planned 8,340 Megawatts of Renewable Energy Capacity this year.
Among those, 5586 are wind units and 275 2,758 Megawatts are solar units. So the company had a total renewable energy reserve in the first half of year of 6,880 Megawatts. By the end of the June, there are 3,920 megawatts of wind power that's under construction and 11.60 Megawatts of solar power are under construction. So according to our communication with the provincial government in Jiangsu, there's no subsidy guidance of this offloading power. So the company will actively follow the result of the feed in tariff of the offshore wind and the company has communicated with provincial government in Guangdong, Zhejiang, Jiangsu, Guangxi and Fujian about the following construction of offshore wind.
And the company will make our investment decision according to the subsidy trend in the future. And also the construction cost, the company will make the investment decision according to those factors.
About
auxiliary service for the company in the first half of the year, the company has a net profit from auxiliary service of RMB596 1,000,000 and the number has decreased comparing to the same period last year. That is because the wind and the solar units have expense increase and there is a cap of the auxiliary service revenue in Northeast China. I have a follow-up question about the company's investment hurdle rate of renewable energy. So is there any change on the company's guidance of this investment hurdle rate? The company will insist on high profitability when investing in the renewable energy and the company's requirement for now is 2 percentage points plus the financial cost.
So for now the company's investment hurdle rate is about 6.5% to 7%. It has a little decrease comparing to the formal requirement. I have three questions. My first question is about the power consumption estimation. So what is the company's estimation of the utilization now of thermal units?
Would the company change the guidance from the beginning of the year? And my second question is what is the company's unit fuel cost breakdown to coal units and gas fired units? And my third question is about the cost of construction for wind power. So you can see from the market that the cost of construction has decreased for some of the wind units. So is the company experiencing this decrease now?
Or is there a time lag between the company's cost of construction comparing to the market price? About the unit fuel cost, the unit fuel cost for coal fired units was RMB 241.65 per megawatt hour in the first half of year. And for the gas fired unit, it was RMB 363 0.1 per megawatt
hour.
So for the number for the Q2 alone, the coal fired unit unit fuel cost was RMB 256.66 per megawatt hour and the number was RMB370 per megawatt hour for gas fired units. So I'll answer the question about the power generation expectation. So the association have changed the power consumption expectation for several times in the first half in the beginning of the year, the expectation was about 6% to 7% increase for the whole year. And they changed the expectation in the Q1 to 7% to 8% growth rate. And currently, they changed it again to 10% to 11%.
The company have actively studied and judged the market trend. And according to the expectation from the Society and the Bureau Association, the company have changed the power generation guidance from the beginning of the year. And for now, the company's guidance for the power generation in the 2021 is 445,000,000,000 kilowatt hour. The power generation growth rate will be at 10.6%. It will be in line with the whole country's power growth.
About utilization hour, the total utilization hour for the company will be at 3,900 hours increased by 150 hours comparing to the same period last year. And about thermal utilization hour, it will be 4 50 hours increasing by 200 hours comparing to the same period last year. About the cost of construction of renewable energy, because we signed an interval agreement with our key suppliers. So we have a very we have not very sensitive impact from the market price. And for the units of 3 megawatts, the cost of construction was about 2,000 300 to RMB240.
And for the solar power, the cost was about RMB1.8 per watt. And so in general, our cost of construction for wing project is rmb 6000 to rmb 7000 per kilowatt. And for the solar power, it was rmb3,900 to RMB 4,100 and the cost will vary according to different situation in the specific projects.
The next question is from Huang Shaojie of Huaqiangjunjie. Please go ahead. Thank you.
I have two questions.
The first
question is about renewable energy subsidies. So what is the company's renewable energy subsidy collectible for now? And the second question is about the thermal power emission reduction method. So what was the company's cost of those method using to reduce the emission of thermal power. So in the first half of the year, the subsidy for the renewable energy increased RMB 3,093,000,000,000 and the company have collected a RMB10.1 million subsidy in the first half of year.
There are still RMB11.883 billion subsidy that remain to be collect in the future. About the company's cash flow situation, the company have an operating cash inflow of RMB19.1 billion and outflow of operating cash flow was rmb17 1,000,000,000. So the company have a net cash inflow in the first half of year. So I'll answer the question about the decarbonization of the company. So from the technical point of view, the company firmly promoted transformation to green energy and the company increased the proportion of renewable energy.
At the same time, the company make full use of our professional technological knowledge background and to promote transformation renovation for the existing coal fired thermal units. The company has making effort to decrease the carbon emissions by the following method. 1st is to increase the carbon increase the power utilization and decrease the carbon decrease the power consumption. 2nd is to promote flexibility retrofit to the existing thermal units and respond to ensure the safety of the grid in the hole. The third method is to promote the renovation of heat supply.
The first method is to actively promote the biomass coupling with the thermal units. The company is making effort in those areas to increase the technological innovation and seek for the carbon intensity decrease for our thermal unit. As we announced in the Q1 in the 14 to 12 year plan period, the company strive for a 5 gram decrease in our coal consumption for power production. About 5 grams decrease with LMB. So about the 5 gram decrease, is that only for the coal fired units?
And during the 5 14 to 5 year, what will be the company's cost to achieve this goal? So the 5 gram decrease is for the coal fired units. And during the 14th 5 year plan, the company will maintain a stable invest in the renovation and technological upgrade. The capital expenditure for those areas will be at RMB6.9 billion for each year. I have two questions.
My first question is about fixed assets. The company have total fixed assets of RMB303.1 billion. For what proportion for the coal fired units account for what proportion of those fixed assets? And second question about the tariff of the market based power sales. So the company's average tariff was RMB4.18 per megawatt hour and the market based volume accounts for about 61%.
And the average market based volume tariff for the coal fired units was RMB 371.92 per megawatt hour. So what was the market based volume tariff for the wind power?