Energy giants are massively selling off assets and accelerating mergers and acquisitions; what's going on?

Abstract:

The pursuit of "incremental expansion" in the new energy sector easily leads to the paradox of "the industry is not yet established, but the momentum has already waned." Energy giants are starting to transition from simply building wind and solar power plants to building new energy systems, accelerating their layout in emerging fields such as integrated source-grid-load-storage, smart grids, and zero-carbon industrial parks.

 

By | Wei Xiaoni

Edited by | Tang

→This is the 1488th original article of "Global Zero Carbon"

 

Last year, the energy sector was still discussing why energy giants were no longer acquiring and investing in photovoltaic and other new energy assets; this year, unexpectedly, energy giants have launched an unprecedented wave of asset sales and transfers.

 

In this migration of assets worth hundreds of billions, the state-owned enterprises and subsidiaries involved include State Power Investment Corporation, State Grid Corporation of China, China Three Gorges Corporation, China General Nuclear Power Group, Dongfang Electric Corporation, Power Construction Corporation of China, China Coal Energy Company, CRRC Corporation Limited, and China Southern Power Grid. They have intensively transferred new energy assets through equity trading exchanges and simultaneously issued a series of merger and acquisition announcements worth tens of billions of yuan.

 

These actions involve not only photovoltaic and wind power new energy fields but also hydropower, thermal power, and energy storage and other diversified energy assets, with both the scale and frequency of transactions reaching record highs.

 

According to statistics from platforms such as the Beijing Equity Exchange and the Shanghai United Assets and Equity Exchange, from January 2024 to April 2025, there were more than 100 new energy asset transfer projects, of which state-owned enterprises accounted for more than 70%.

 

State Power Investment Corporation has become the "leader" in the sale and transfer of new energy assets, having transferred the equity of 22 new energy companies, involving a total installed capacity of over 3.2GW of photovoltaic and wind power projects, with a transaction valuation of approximately 18 billion yuan.

 

New energy projects are capital-intensive industries with huge upfront investments. Companies quickly recover funds by selling mature projects to support the development of new projects, forming a virtuous cycle of "investment-exit-reinvestment." From this perspective, selling assets is a normal business practice.

 

But this large-scale asset restructuring movement is clearly not that simple. What is the logic behind it? What trends in the energy industry are reflected? What direction can new energy companies see from this?

 

 

01

New energy assets become the focus of sales and transfers

 

State Power Investment Corporation is a well-deserved "top student" among state-owned enterprises in the new energy field. By the end of 2024, the group's clean energy installed capacity accounted for 72.4%. In 2025, State Power Investment Corporation plans to increase this proportion to over 75%.

 

However, State Power Investment Corporation is also the vanguard of this asset reshuffle.

 

On April 11, an announcement on the website of the Beijing Equity Exchange shocked the energy sector. The announcement shows that State Power Investment Corporation is transferring the equity of four new energy companies under its subsidiary, Wuling Power Co., Ltd.

 

These four companies include Ruzhou Xinxing Photovoltaic Power Co., Ltd. (55% equity, reserve price of 173 million yuan), Jiangling County Xinxing Photovoltaic Power Co., Ltd. (55% equity, reserve price of 214 million yuan), Xinan County Xinxing Photovoltaic Power Co., Ltd. (55% equity, reserve price of 158 million yuan), and Qingyuan Yousheng Asset Investment Co., Ltd. (51% equity, reserve price of 171 million yuan).

 

After the transfer, Wuling Power will completely withdraw from these companies, and the target enterprises shall no longer use the name, business qualifications, and intangible assets such as franchise rights of state-owned enterprises and their subsidiaries.

 

In fact, this is not the first time State Power Investment Corporation has sold assets. From July 2024 to April 2025, its subsidiaries intensively transferred the equity of 14 photovoltaic project companies in Henan, Hubei, and other places.

 

On March 4, State Power Investment Group (Beijing) New Energy Investment Co., Ltd. planned to transfer 100% of the equity of State Power Investment Group Channel Wind Power Co., Ltd.;

 

On January 26, State Power Investment Hai'e (Hubei) New Energy Co., Ltd. transferred 50% of the equity of Hunan Shaoyang State Power Investment New Energy Co., Ltd.;

 

On January 6, Wuling Power also transferred 51% of the equity of Hengdong Lingnan New Energy Co., Ltd.

 

In September last year, State Power Investment Chongqing Company simultaneously transferred 20% of the equity of Chongqing Luxin. This company holds 50MW household photovoltaic projects in Qijiang, Banan, and other places.

 

In the same month, State Power Investment Green Electricity Henan Company transferred 90% of the equity of Handan Deyuan and 100% of the equity of Linzhou Linen.

 

Equity transfer of some energy state-owned enterprises.

Source: Photovoltaic

 

Other state-owned enterprises have also been very active:

 

State Grid Corporation of China: In September 2024, State Grid Hebei North Power transferred 36.377% of the equity of Hebei Goldwind Electric Control Equipment; in the same month, State Grid Henan Company transferred 51% of the equity of three new energy companies; in December, State Grid Xinjiang Integrated Energy Service Co., Ltd. transferred all the equity of five new energy companies.

 

China General Nuclear Power Group: From September to November 2024, it successively transferred 100% of the equity of Shenzhen Bailu Liangshi New Energy Service Co., Ltd. and 49% of the equity of China General Nuclear Power New Energy (Xiangshan) Co., Ltd.

 

Dongfang Electric Corporation: From October 2024 to January 2025, it transferred 100% of the equity of Mulei Dongxin New Energy Co., Ltd. and 85.02% of the equity of Dongyao New Energy (Qujing) Co., Ltd.

 

China Southern Power Grid: In March 2025, it transferred 5% of the equity of Guizhou Jinsheng New Energy Co., Ltd.; in February, it transferred 5% of the equity of Guangdong Power Grid Energy Development Co., Ltd.

 

China Three Gorges Corporation: In March 2025, it transferred 50% of the equity of Kaifeng Pingmei Beikong New Energy Co., Ltd.; in February, it transferred 979 million shares of Changjiang Power to Changjiang Environmental Protection Group free of charge.

 

PetroChina: On April 2, Jiangsu PetroChina Kunlun Energy Investment Co., Ltd. transferred 51% of the equity of Xuzhou Chengtong New Energy Co., Ltd., with the transferor being a wholly-owned subsidiary of PetroChina Kunlun Energy.

 

These are just some of the sale projects listed. These transfer projects are mostly photovoltaic and wind power assets, with installed capacities ranging from tens of megawatts to hundreds of megawatts. The transaction modes include equity transfer, asset divestiture, and gratuitous transfer.

 

It is worth noting that the transferred assets are mostly inefficient or non-core projects, such as household photovoltaics with lower-than-expected returns, early-stage centralized photovoltaic power plants, or projects with high wind and solar curtailment rates due to grid absorption limitations.

 

 

02

Mergers and acquisitions: Different transformation paths of energy state-owned enterprises

 

Simultaneously with asset disposals and transfers, energy central enterprises are accelerating industrial integration through mergers and acquisitions, strengthening their advantages, and concentrating their efforts on tackling the national strategies of energy security and energy transformation.

 

The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has explicitly stated that 2025 will be the closing year for the deepening and improvement of state-owned enterprise reforms, and that efforts will be increased to strategically restructure and channel state-owned capital towards key areas such as new energy and smart grids.

 

Energy central enterprises are the focus of this restructuring. In the first quarter of 2025 alone, China Energy Investment, Huaneng Power International, China Guodian Corporation, China Huadian Corporation, and Datang Power Generation already launched restructuring projects exceeding 100 billion yuan, involving hydropower, nuclear power, thermal power, and new energy sectors.

 

Differentiated Restructuring Paths of the Five Major Power Central Enterprises. Source: SOHO Solar PV Network

 

The following are some recent typical cases:

 

China National Energy Investment Corporation (SPIC): Some of the recent four equity sales of SPIC projects involve internal asset integration. On April 15, Yunda Environmental Protection, a subsidiary of SPIC, announced that it plans to acquire 100% of Wuling Power (transaction price: 24.67 billion yuan) and 64.93% of Guangxi Changzhou Hydropower (transaction price: 3.068 billion yuan) through a combination of share issuance and cash payment, with a total consideration of 27.736 billion yuan. Following this transaction, Yunda Environmental Protection's main business will add hydropower generation and integrated development and operation of basin hydropower stations and new energy sources.

 

Another listed company under SPIC, China Energy Investment Financial Holdings Co., Ltd., has divested its financial business through asset swaps and injected hundreds of billions of yuan in nuclear power assets to become the group's integrated nuclear power operation platform. After the transaction, it controls 9.21 million kW of operating nuclear power units and manages 10.56 million kW of units under construction, with reserve sites covering coastal areas such as Guangdong and Shandong.

 

State Grid Corporation of China: In April 2025, SGCC’s Institute of Electrical Power Research transferred 51.49% of the equity held by Nari Group in SGCC Nari Electric to itself and simultaneously transferred 7.49% of the equity in SGCC Yingda to Nari Group. This is intended to meet the SASAC's requirement to reduce the number of legal entities and optimize the equity structure.

 

China Huadian Corporation: In March 2025, Huaneng Power International proposed to acquire equity in eight thermal power and new energy companies under China Huadian Corporation through share issuance and cash payment, adding 15.97 million kW of installed capacity and increasing its controlling capacity to 74.42 million kW. The transaction was temporarily suspended for audit due to expired financial information, but it is planned to be resumed after supplementation.

 

Datang Group: In 2025, Datang Group spent 5.344 billion yuan to repurchase equity in five new energy and hydropower companies in Liaoning, Hebei, Inner Mongolia, and other regions, and plans to inject 73 million kW of unlisted coal-fired power assets and supporting 5GW wind and solar projects to promote the synergistic transformation of coal-fired power and new energy.

 

Huaneng Group: In 2024, Huaneng International injected 10GW of new energy assets, and in 2025, it plans to further integrate the group's unlisted offshore wind power, energy storage and 40GW of new energy assets.

 

China Energy Group: Its subsidiary, Longyuan Power, acquired eight new energy companies, adding 2.03 million kW of wind and solar installed capacity; Guodian Power integrated 82GW of thermal power and 9GW of hydropower assets.

 

According to statistics, since 2024, the scale of mergers and acquisitions among central enterprises has exceeded 580 billion yuan, with a high proportion in the power industry. The restructuring directions include injecting new energy assets into listed companies, synergistic integration of thermal power and new energy, and the construction of specialized platforms for nuclear power assets. Transactions mainly take the form of share issuance, cash payment, or equity swaps.

 

 

03

The Grand Strategy Behind Asset Transfers

 

Behind the large-scale disposal and transfer of assets and mergers and acquisitions by energy central enterprises are the combined effects of multiple factors, including policy, market, financial, and technological factors. These factors are jointly driving the transformation of central enterprises from "scale expansion" to "system synergy".

 

Policy drivers are the main reason. Since 2016, SASAC has promoted the reform of central enterprises to "compress management levels and reduce the number of legal entities," requiring central enterprises to focus on their main responsibilities and businesses and divest from non-mainstream and inefficient assets (two non-mainstream assets: non-mainstream and non-advantageous assets; two types of assets: inefficient and ineffective assets).

 

In 2022, SASAC further proposed "full life-cycle management" and "three concentrations" (concentration on advantageous enterprises, concentration on main businesses, and concentration on the high end of the value chain), requiring central enterprises to reduce the proportion of non-mainstream investments to below 10%.

 

For example, the State Grid Corporation of China compressed its management levels to four levels and reduced the number of legal entities by 790 by transferring the equity of SGCC Nari Electric and SGCC Yingda without compensation.

 

From a financial perspective, many photovoltaic and wind power projects are no longer profitable, and some projects have brought huge financial pressure to enterprises because their return on investment could not meet expectations. For example, the return on net assets of a photovoltaic project in Shandong is only 1.8%, far below the bottom line of 7% return on equity, and has been listed as an inefficient asset.

 

Central enterprises need to improve their overall financial performance by selling inefficient assets. In particular, photovoltaic projects invested in the past use old technologies, which are not only inefficient but also have high maintenance costs. With the emergence of TOPCon/HJT, perovskite stacking, BC and other technologies, the valuation of previously built photovoltaic power stations is generally declining.

 

In July last year, a report from the Central Inspection Team on a certain energy central enterprise pointed out that its photovoltaic industry has the problem of being "large but not strong," and the rectification plan requires "improving existing assets and optimizing incremental assets".

 

In particular, with the issuance of the "Notice on Deepening the Market-Oriented Reform of New Energy On-Grid Tariffs to Promote the High-Quality Development of New Energy" (Document No. 136), as the power market progresses, new energy participates in market transactions, electricity prices fluctuate frequently and show a downward trend, coupled with changes in the guaranteed acquisition mechanism and the "discounted implementation" of time-of-use electricity prices, energy central enterprises all face the risk of declining electricity prices and declining new energy profits.

 

Of course, central enterprises also undertake national missions. In addition to the above policy adjustments and financial considerations, the key is that central enterprises need to devote more energy to developing cutting-edge technologies and new business models and participate in the profound transformation of the energy and power sectors.

 

Although there is increasing news about central enterprises selling new energy projects and transferring new energy equity, this does not mean that central enterprises are no longer developing new energy. Instead, they need to consider the issue from a new energy system perspective, transforming from simply building wind and solar power plants to building new energy systems, accelerating the development of integrated source-network-load-storage, hydrogen-ammonia-alcohol integration, smart grids, zero-carbon industrial parks, and other emerging fields and integrated energy services.

 

For example, the State Grid Corporation of China proposed an investment of 800 billion yuan in 2025, mainly in ultra-high voltage and intelligent distribution networks, transforming from "emphasizing power generation and neglecting supply" to a strategic transformation that attaches equal importance to transmission and distribution.

 

The focus of China National Energy Investment Corporation is also shifting to offshore wind power, large-scale bases in deserts, gobi, and barren lands, green electricity direct supply projects, zero-carbon parks, and integrated green electricity, alcohol, and hydrogen-ammonia projects.

 

Last year, China National Energy Investment Corporation also restructured a company called China National Energy Investment Group Comprehensive Smart Energy Co., Ltd. (SPIC Comprehensive Energy), which specializes in integrated energy services.

 

As a secondary company, DianTou Zongneng serves as the market development platform for National Energy Investment Group's integrated smart energy, responsible for the development and construction of integrated smart energy, technological innovation and verification, and green and low-carbon transformation services.

 

China Huaneng Group is also actively cooperating with China Datang Corporation to develop new business models such as virtual power plants and integrated energy services. Huaneng Group's virtual power plant layout adopts a provincial company platform-based approach, with projects implemented in Zhejiang, Shandong, Jiangsu, Hubei and other regions. In March this year, the tender for the Phase I demonstration project of Huaneng Xiong'an headquarters park integrated energy services was launched, which will construct a photo-storage-straight-flexible system, photovoltaic system, and micro-wind power generation system, etc.

 

At the beginning of this year, Dai Hegen, chairman of China Railway Construction Corporation, put forward the argument that "projects such as centralized photovoltaic and wind power generation have already begun to be oversupplied. China Railway Construction must not invest in them again; otherwise, it will be a 'transformation' without 'upgrading.'" At the time, the industry was very surprised.

 

Looking back now, Chairman Dai's insight is remarkable. For a state-owned enterprise, simply grabbing resources and building countless photovoltaic and wind power plants, blindly pursuing "incremental expansion" without considering the consumption problem, the grid's bearing capacity, and the coordination of the entire energy and power systems, can easily cause the new energy industry to fall into the paradox of 'the industry is not yet ready, but the momentum is already declining'.