On March 20, China Longyuan Power Group Corporation Ltd. held its 2018 annual results announcement conference in Hong Kong. Chen Bin, party member and general accountant of CHN Energy Investment Group Co., Ltd., chairman of board of supervisors in Longyuan Power, attended the meeting. Jia Yanbing, general manager and executive director of China Longyuan Power, attended the meeting and introduced the company's 2018 business performance. The members of the board, supervisors, secretaries of the board of directors and chief accountants of Longyuan Power were present at the meeting.
In his speech, Chen Bin pointed out that Longyuan Power took the initiative to adapt to the new situation of power reform and development in 2018, conscientiously implemented the "1169" strategy of CHN Energy, achieved new achievement in various tasks, and maintained a good momentum of business development. At present, energy development is undergoing major changes. The pace of green and low-carbon transformation is accelerating. A new round of technological and industrial revolution is emerging in the world. The energy structure adjustment brings us a new opportunity. The green development and clean efficient utilization of traditional energy is a big trend and the proportion of clean renewable energy continues to rise. Next, we will take Xi Jinping's new era socialism with Chinese characteristics as a guide, adhere to the new development concept, strengthen high-quality development, improve and optimize wind power industry, accelerate the construction of a world-class new energy company with global competitiveness, and make greater contributions to the construction to ecological civilization and a beautiful China.
As of December 31, 2018, Longyuan Power Holdings has 21,044 MW of installed capacity, including 18,919 MW of wind power holdings, 1,875 MW of thermal power holdings and 250 MW of other renewable energy holdings. In 2018, the company achieved operating income of 26.388 billion yuan, a year-on-year increase of 7.3%; realized profit before taxation of 5.897 billion yuan, with an increase of 7.9%; vested equity holders net profit of 4.166 billion yuan, with an increase of 8.3%.
In 2018, the company achieved better results in the following aspects: first, we promoted the safety of production and steadily improved wind power generation. The company took the improvement of production management system as the basic principle and regards the research of institution system, the implementation of safety measures, the standardization construction of safe and civilized production, professional training and equipment management as the starting points, implementing the cycle management process and work effectiveness, and solidly advancing various work of safe production. In 2018, the company completed a total of 49.971 billion kilowatt-hours of power generation, including 39.542 billion kilowatt-hours of wind power generation, with an increase of 14.78% over the same period of last year; the average utilization of wind power was 2,209 hours, with an increase of 174 hours over the same period of last year. The company strengthened the implementation of the main responsibility for safety, further improved the system construction, and provided system guarantee for safety supervision. We promoted the risk pre-control system throughout the group to improve the operational safety protection level, carried out safety skills training and safety knowledge examination, improved the safety awareness and ability of all staff, strengthened safety inspection and rectification efforts, strengthened safety supervision and inspection, and solved deep-seated problems affecting safety. We vigorously carried out equipment management work to improve equipment operation efficiency and strictly controlled the proportion and the amount of electricity rationing. At the same time, under the situation that the scale of wind power trading continues to expand, we adhered to the principle of "price protection and quantity competition" and carried out in-depth market trading to ensure the maximum benefit of the company.
Second, we increased the depth of preliminary work and continued to optimize the layout of development. The company continued to strengthen the depth of work, actively strengthened strategic guidance and overcame difficulties. We focused on promoting the development and distribution of wind power in southeast coastal provinces, central and eastern region of China and offshore areas. We closely monitored and participated in the development and construction of base and extra-high voltage transmission channels. We continuously adjusted the key development sectors of wind power in the country, realizing the development pattern of "nationwide expansion and decentralization within the province". We carried out wind power work in 31 provinces and achieved full national coverage (except Hong Kong, Macao and Taiwan). In 2018, under the new policy of "5.18" of wind power generation issued by CHN Energy, the company approved 14 wind power projects with a total capacity of 1,710 MW, which maintained the fixed electricity price of that year. Among them, we examined and approved offshore wind power generation project of 1,000 megawatts, the highest on record. We obtained the only wind power generation project approval in Sichuan province that year, filling the blank of wind power development in Sichuan province. By the end of 2018, the company had examined and approved a total of 7.0 GW of wind power projects without putting into operation, which can meet the needs of sustainable development during the 13th five-year plan period.
Third, we optimized project quality management and steadily promoted project construction. In 2018, the company effectively promoted the project schedule, implemented the starting conditions in advance, further strengthened the cost control, optimized the project quality management, and steadily promoted the construction of wind power projects. Our company strengthened safe engineering quality with stable safe conditions on engineering construction and no construction equipment safety accidents. We put six wind power projects with capacity of 523.5 MW into operation throughout the year, of which 348 MW were offshore wind power projects.
Fourth, we innovated the marketing model and basically kept the electricity price level stable. In 2018, the company's average on-grid electricity price for all power generation businesses was 457 yuan/MWh (excluding VAT), with an increase of 4 yuan/MWh over the same period of last year. The average on-grid tariff of wind power was RMB 482/MWh (excluding VAT), a year-on-year decrease of 2 yuan/MWh. This was due to the improvement in power cuts, which led to an increase in wind power sales in low-priced regions compared to 2017; the trading volume of electricity in the wind power market had increased compared with 2017. The average on-grid electricity price of thermal power was 337 yuan/MWh (excluding VAT), a year-on-year increase of 9 yuan/MWh. It was mainly due to the increased proportion of direct power supply, the increased benchmark price of desulfurization coal-fired units and the reduction of VAT tax rate by one percentage point.
Fifth, we continued to strengthen capital management and gave full play to the advantages of capital cost. Faced with the severe situation of domestic and foreign money market, the company continued to maintain intensive control of financing, improved the rate of capital collection, coordinated operation, optimized the allocation of regional funds, and controlled the cost of funds. We continuously strengthened the fund plan management, realized the fund accurate investment, decreased fund sedimentation, performed well the work of repayment in advance. At the same time, the capital plan coordination mechanism based on the vertical management of the headquarters was used to strengthen the capital plan management, to continuously improve the efficiency of capital use, to maximize the time value of capital, and to achieve a significant effect of financial cost reduction. In terms of financing, we kept a close eye on domestic and foreign capital markets, further expanded financing channels, successfully obtained the registration and approval of debt financing instruments and green asset support note of China inter-bank market dealers association, enriched financing varieties, and committed to ensuring funds security. In 2018, the company successfully issued ten short-term financing bonds, one green corporate bonds, one green company bonds and one green asset-backed notes. The annual capital cost maintained the industry advantage. We gave full play to the financing advantages of the bond market and won the "Green Bond Outstanding Issuer" and "Outstanding Corporate Bond Issuer" awards, establishing a good corporate image.
Sixth, we intensified the development in science and technology, and continuously enhanced the supporting ability of science and technology. The company continued to increase its support for science and technology projects that have significant influence on wind power development, including 14 newly established science and technology projects, 38 authorized patents, and 13 software copyrights. Our company continued to strengthen the construction of standards and regulations and undertake 11 national and industry standards. The energy industry standards Wind Turbine Generator Vibration Evaluation Guidelines and Photovoltaic Power Station Equipment Post-evaluation Procedures edited by our company were approved by the national energy bureau for implementation. We maintained the company's technology in the industry leading edge. A large number of scientific and technological achievements with core competitiveness had emerged, such as "new single-pile foundation design for intertidal zone wind power generation" and "large-diameter single pile rock-socketed technology", among which many technologies were invented first in the world.
Seventh, we adhered to the requirements of high-quality development and performed "going global" strategies actively and steadily. In accordance with the requirements of high quality development, the company actively participated in the construction of the Belt and Road Initiative, steadily implemented the "going global" strategy, focused on overseas wind power and photovoltaic market optimized the layout structure, and steadily promoted overseas business. During the year, the company increased the research and development of markets in North Africa, South America and other regions. Through on-the-spot investigation and negotiation of specific projects, the overseas market development idea was formed, including radiating North America with Canada's ongoing projects as the fulcrum, radiating Latin America with Argentina as the breakthrough point, influencing Central and Eastern Europe and countries of the Belt and Road Initiative by Poland and Ukraine and utilizing South Africa's ongoing projects as the basis to realize the coordinated development of North and South Africa. Our company focused on greenfield investment, paid equal attention to greenfield development and acquisition of ongoing projects, laying a good foundation for the development of overseas business in the future. In 2018, its Canadian company strengthened the safety management of wind power farms and improved the operation and maintenance quality of wind turbines. Devlin Wind Farm generated 272 GWh of electricity accumulatively, achieving 1,492 days of safe production accumulatively as of December 31, 2018. In the first full year after the De Aar wind power project in South Africa was put into operation, the utilization hours of the project reached 3,120 hours, generating 763 GWh of electricity, far exceeding the target of the beginning of the year.
In 2019, Longyuan Power will take the thought of Xi Jinping's new era of socialism with Chinese characteristics as the guide, fully implement the spirit of 19th National Congress of the Communist Party of China and the Second and Third Plenary Session of the 19th Central Committee of the Communist Party of China, and conscientiously study and implement the central economic work conference and the national party building work of state-owned enterprises. Under the overall leadership of Communist Party of China, we will firmly grasp the fundamental key of steady progress, adhere to the new development concept, deepen the supply-side structural reform, fully implement the National Energy Group's "1169" strategy and 2019 work deployment, vigorously implement the innovation-driven development strategy, deepen the concentration of efforts, optimize the political ecology, build a world-class new energy company with global competitiveness, and greet the 70th anniversary of the founding of the People's Republic of China with outstanding achievements. In order to ensure the completion of the business objectives in 2019, the company will focus on the following tasks: first, to adhere to and strengthen the leadership of the Party, and promote overall Party self-discipline to deep; second, to strengthen safe production and operation management and continuously improve the quality of operation; third, to optimize the strategic layout in an all-round way to promote high-quality development; fourth, to strengthen scientific and technological innovation and enhance the core competitiveness of enterprises; fifth, to deepen management innovation and enhance the endogenous motivation of enterprises; sixth, to stress political standards and strengthen the construction of leading bodies and cadres; seventh, to adhere to the cultural construction leading and construct harmonious well-being dragon source.