Henan Senyuan Group, a well-known enterprise in the domestic electrical industry, has made a big deal by investing one billion yuan in the construction of a photovoltaic power generation project in the Yellow River beach area of Lankao County, Henan. It was suspended by the Yellow River Water Resources Commission on suspicion of not being approved for construction. This project is of great significance to Henan Senyuan Group, its listed company Senyuan Electric as a major shareholder, or the Lankao County Government.
Illegal projects are called off
Drive more than ten kilometers north from the Jiao Yulu Memorial Hall in Lankao County, Henan Province, cross two large embankments, and then enter the "tofu waist" area of the Yellow River. In the floodplain area where the Yellow River is most prone to ravaging, it is covered with photovoltaic solar panels one by one, and cannot be seen at a glance.
The on-site bulletin board shows that the agricultural photovoltaic complementary power generation project invested by Henan Senyuan Group in Lankao County has a total investment of 30 billion yuan. It plans to build a 3GWp agricultural photovoltaic complementary power station in three years, divided into four phases. The construction scale of the first phase is 200MWp distributed and 200MWp decentralized, with an annual power generation of about 8 billion kWh after completion.
The development, production, and sales of high-voltage electrical components, power electronic products, and power quality control devices are currently the main businesses of Senyuan Electric. In recent years, new energy has been a key focus of Senyuan's efforts, with more being carried by Senyuan Group.
This project, which is listed as a key project in Henan Province, is even more desirable for Lankao. The first phase of the project alone covers an area of 7200 acres, with an investment amount of over one billion yuan.
However, at the 2015 Yellow River Flood Control and Drought Relief Video Conference held by the Yellow River General Administration on May 11th, photos of the Henan Senyuan Group Agricultural Photovoltaic Power Generation Project were displayed for the entire basin briefing.
Chen Xiaojiang, Executive Deputy Commander in Chief of the Yellow River Prevention and Control General and Director of the Yellow River Committee, spoke harshly: "Violations such as land disputes with rivers and blind development of beach construction projects without verification are repeatedly prohibited, which not only affect the flood discharge of rivers but also pose a threat to one's own safety
According to laws and regulations, project development and planning construction in the Yellow River floodplain must undergo a river safety impact assessment review in advance. According to the local river affairs department in Lankao, this photovoltaic power station is a typical unauthorized construction project that was immediately suspended upon discovery?.
In the photovoltaic power generation project headquarters of Senyuan Group, there is also another brand - the Agricultural Photovoltaic Project Headquarters of Lankao County Committee and County Government. Firstly, it was pointed out that the violator of the project was the Lankao County River Affairs Bureau, which is an institution under the dual leadership of the Yellow River Commission system and local governments.
The reporter from China Business Daily learned on-site that the project has been suspended for several days, but the construction personnel are still on standby in place.
Business performance or impact
On May 23rd, as soon as the news of the photovoltaic power generation project being suspended was released, many shareholders directly linked this incident to Senyuan Electric. The next day, Senyuan Electric temporarily suspended trading.
On May 25th, Senyuan Electric issued a notice explaining: "The Lankao County Government is responsible for handling the procedures for land, river affairs, meteorology, environmental impact assessment, filing, grid access, and project construction for the construction of photovoltaic power station projects, to ensure the smooth progress of the company's investment project construction in accordance with the law
According to the announcement, after discovering the report, Senyuan Electric Company immediately communicated with the Lankao County Government, which is actively handling and improving the relevant procedures such as flood assessment.
Undoubtedly, the announcement shifted attention to some extent to the Lankao County government, but this does not mean that Senyuan Electric and Senyuan Group will not be affected as a result.
At the end of 2014, Zhengzhou Senyuan New Energy Technology, a subsidiary of Senyuan Electric, transferred all of its equity in Henan Senyuan New Energy Power Generation Co., Ltd. to its controlling shareholder Henan Senyuan Group in cash for a price of 257 million yuan. At the same time, as the EPC general contractor of the 200MWp ground photovoltaic power station in Lankao County, the company is responsible for project construction and delivery.
It is worth noting that Zhengzhou Senyuan New Energy Technology Co., Ltd. made a public announcement on August 15, 2014 through Henan Tendering Network, stating that the bidder in the original bidding announcement and change announcement, "Henan Senyuan Group Co., Ltd.", was changed to "Zhengzhou Senyuan New Energy Technology Co., Ltd.".
Four months later, Senyuan Electric released an expected positive news announcement: this transaction will allow Senyuan Electric to obtain a net profit of 60.07 million yuan, with a net profit margin of 11.25%. This investment is crucial for Senyuan Electric. According to the announcement of Senyuan Electric, the total investment of the Lankao photovoltaic power station project is 1.88 billion yuan. Based on a net interest rate of 11.25%, if the remaining projects can be fully completed and delivered before December 31, 2014, the equity transfer and general contracting fees are expected to increase Senyuan Electric's net profit by about 210 million yuan. In 2014, Senyuan Electric's net profit was only 260 million yuan.
The suspension of this project has affected the actual workload and will directly affect the actual revenue of Senyuan Electric. The reporter made multiple attempts, but could not contact Senyuan Electric and Senyuan Group for comment.
Positive communication has no effect?
In history, the Yellow River has ruptured 338 times within the territory of Kaifeng, and Kaifeng has also been besieged by floods 15 times, with 4 times suffering from catastrophic disasters. Kaifeng is therefore listed as one of the 31 key flood control cities in China. The Kaifeng section of the Yellow River has strong suddenness, short foresight period, and little room for maneuver. It is the "tofu waist" section of the river, and Lankao County is adjacent to the tofu waist.
At least ten villages in Guying Township, Lankao County have been included in the relocation plan, and the government will relocate them to a safe area within the Yellow River embankment according to the relocation compensation standards. Local villagers claim that two of the villages have been completely relocated, and their land has been leased by the township government at a price of 1000 kilograms of grain per year for the construction of photovoltaic power generation projects.
But the government followed the principle of safeguarding the safety of people's lives and property, and after moving out the villagers, it placed a power generation project with a total investment of 30 billion yuan here. Everything may stem from a desire to develop the economy.
An official from the Propaganda Department of the Lankao County Committee told reporters that the reason why it was named the Agricultural Photovoltaic Power Generation Project is to plant shade loving crops such as lavender and honeysuckle under the photovoltaic power station, and then process and purify them into aromatic essential oil products. This project can add at least 3500 job opportunities for the Lankao.
The project has been suspended, what will be done in the future? An official from the Lankao County government expressed his doubts to reporters that investing so much money must not be wasted.
It is reported that Lankao County has timely and actively communicated with the Yellow River Committee. However, some officials in the Lankao official community believe that the Huang Committee's high-profile announcement of the project's illegality will naturally not easily retract the principle.
Interestingly, the design unit of the Henan Lankao 200MWp Ground Photovoltaic Power Station Project is Yellow River Exploration Planning and Design Co., Ltd., which is a subsidiary of the Yellow River Water Resources Commission that suspended the power generation project.