Waste-to-energy companies expand diversification **key

The upsurge of investment in waste-to-energy power generation has started under the introduction of relevant national policies. However, high investment, high ratio of fixed-asset investment, and a return cycle of up to 10 years have also deterred many environmental protection companies.

It is understood that the early construction cost of waste incineration power plants is relatively high and generally dominated by the government. In the later period, due to the immaturity of technology and incompleteness of waste classification, the operating costs are high and become one of the burdens of waste incineration power generation.

According to public information, the main sources of compensation for waste incineration power plants and profits are waste treatment fee subsidies and on-grid electricity price income. The so-called garbage disposal fee subsidy means that the government gives a certain amount of subsidies for each ton of garbage to be disposed of, and local governments have different standards. At present, companies often rely solely on electricity tariffs to achieve a balance between revenue and expenditure. The government subsidy for waste treatment will become a corporate profit.

"Double subsidies" is one of the main motive forces for companies to launch waste-to-energy, but we must also realize that the implementation of subsidies in our country needs to be strengthened. Companies that cannot get government subsidies in a timely manner are faced with capital difficulties and corporate survival has also emerged. crisis. Analysts believe that the over-reliance on subsidy-surviving development model may make waste-to-energy companies unsustainable. The more mature profit model should be based on corporate profits, and the state financial subsidies are only symbolic and encouraging.

In addition, waste-to-energy needs to be supported by powerful technologies, and investment in research and technology is expensive. Compared with developed countries abroad, there is still a gap in China's waste disposal technology. Some analysts said that because the core equipment for waste treatment depends on imports from abroad, the resulting operating costs remain high, which is not conducive to the promotion of waste power generation.

High costs also set a high threshold for waste-to-energy, and it is decided that this market will eventually be monopolized by only a few companies with comprehensive strength. Only companies with strong financing, technology, brand strength, and good government-to-enterprise relationships and rich project operating experience can become the last oligopoly.

In view of this situation, experts have suggested that diversifying financing channels to obtain low-cost funds is the key to the expansion of waste-to-energy power companies. Rolling development of waste-to-energy projects requires strong financing capabilities, while smaller companies are often subject to capital constraints in the process of industrialization. Some core technology companies urgently need financial support to develop and promote new products.

Utilizing the capital operation platform of listed companies, on the one hand, companies can solve the problem of capital bottlenecks in development. On the other hand, listed companies can quickly achieve scale expansion and improve the industrial chain, which is a win-win outcome.