(Yicai) Aug. 30 -- Shares in TBEA advanced today after the Chinese transformer manufacturer said it will invest CNY10.1 billion (USD1.4 billion) to construct a large solar power station and a wind farm to supply renewable electricity to one of its unit's factories that makes silicon, a key raw materials needed for solar panels.

TBEA’s share price in Shanghai [SHA:600089] closed up 2.02 percent at CNY12.62 (USD1.78) and shares in subsidiary Xinte Energy [HKG:1799] climbed 2.7 percent to close at HKD6.95 (USD0.89).

TBEA intends to invest CNY3.5 billion (USD492.9 million) to build a 1 gigawatt solar power station as well as supporting facilities in sun-drenched Xinjiang Uyghur Autonomous Region, where TBEA is based, the firm, which has been moving into the renewable energies sector in recent years, said yesterday. Construction should take one year.

It will also invest CNY6.7 billion in the same industrial park in Qitai county, Changji Hui Autonomous prefecture to construct a 2 gigawatt wind farm as well as supporting energy storage and other facilities, it said. Construction should take 20 months.

Xinte Energy will set up two local companies to be in charge of the projects’ construction and operation. Twenty percent stakes in each company will be put aside to lure investment from local firms that use a lot of electricity.

The solar power plant should generate around 2 billion kilowatt hours of electricity a year and the wind farm around 4.7 billion kWh, it added. The PV station should generate annual profit of around CNY83.6 million (USD11.8 million) and the wind farm around CNY557 million (USD78.5 million), according to the current grid prices at the Xinjiang Power Trading Center.

Part of the electricity generated by these plants will be diverted to Xinte Energy’s nearby high-purity polysilicon factory to realize the green production of raw materials in the photovoltaic sector, TBEA said.

TBEA’s net profit contracted 59.4 percent in the first six months from a year earlier to CNY3 billion (USD423 million), largely dragged down by the tumbling price of silicon, according to its latest financial report released yesterday. Revenue slumped 4.5 percent to CNY47.8 billion (USD6.7 billion),.

Although Xinte Energy’s output of high-purity polysilicon surged 92.6 percent in the first half from a year earlier to 146,500 tons, it was not enough to counter the huge drop in the price of silicon.

The current installed capacity of TBEA’s self-operated wind power plants was 2,234.50 megawatts by the end of first half, and they generated 3.2 billion kilowatt hours of electricity in the first six months, while that of its PV power plants was 1,275.45 MW, generating 1.01 billion kWh, TBEA said in a separate announcement yesterday. 

Editor: Kim Taylor