SDIC Power Holdings' Strategic Energy Transition and Profitability in H1 2025: A Resilient Shift to Renewables

In the first half of 2025, SDIC Power Holdings Co., Ltd. demonstrated a compelling case study in energy transition, balancing declining thermal power output with robust growth in renewable energy. Despite a 0.54% year-on-year drop in total gross electricity generation to 77.06 terawatt-hours (TWh), the company’s net income rose by 1.4% to CNY 3.79 billion, underscoring the earnings resilience of its renewable energy strategy [1]. This performance highlights how strategic diversification into renewables can mitigate risks associated with traditional energy sources while aligning with China’s decarbonization goals.

Thermal Power Struggles and Renewable Gains
The decline in thermal power output—down 21% year-on-year—was driven by falling coal demand and policy pressures to reduce carbon emissions [3]. In Q1 2025 alone, thermal generation plummeted 32.25%, producing 10.287 TWh compared to 15.184 TWh in the same period the prior year [5]. This segment’s struggles were compounded by an 8.25% drop in the average on-grid tariff for domestic holdings, attributed to the increasing share of subsidy-free renewable projects and lower thermal prices [4].

Conversely, SDIC’s renewable energy division, led by SDIC Huajing Power, delivered a 15% increase in output during H1 2025 [3]. Solar power generation surged by 41.5%, while hydropower rose 10.3% and wind power grew 2.9% [3]. In Q1, solar output alone jumped 30.56% to 1.52 TWh, and wind power increased 5.13% to 1.914 TWh [5]. These gains were fueled by new project commissioning and improved reservoir management at the Lianghekou Hydropower Station [3]. As of Q1 2025, the company’s renewable installed capacity totaled 31,000 MW (solar: 5,778.9 MW, wind: 3,888.5 MW, hydropower: 21,304.5 MW) [2], reflecting a deliberate shift toward clean energy.

Earnings Resilience and Strategic Alignment
The company’s ability to maintain profitability despite thermal power headwinds underscores the financial viability of its renewable pivot. While thermal generation declined, the growth in renewables offset these losses, particularly in subsidy-free solar projects, which accounted for 13% of total capacity [3]. This transition aligns with China’s broader environmental policies, reducing reliance on coal and enhancing long-term sustainability.

A visual representation of SDIC’s energy mix evolution would further clarify this shift.

Challenges and Opportunities
The average on-grid tariff for domestic holdings fell to 0.355 RMB/kWh in Q1 2025, a 8.25% decline, as the energy mix shifted toward renewables [4]. While this may pressure short-term margins, the company’s focus on subsidy-free projects and operational efficiency—evidenced by its 1.4% net income growth—suggests a path to sustainable profitability. The Lianghekou Hydropower Station’s full reservoir storage and improved management also highlight operational strengths that could drive future gains [3].

Conclusion
SDIC Power Holdings’ H1 2025 results illustrate a strategic energy transition that balances immediate challenges with long-term resilience. By prioritizing renewables, the company is not only adapting to regulatory and market pressures but also positioning itself as a leader in China’s clean energy revolution. Investors should monitor how this strategy continues to evolve, particularly as subsidy-free projects mature and thermal power’s role diminishes.

Source:
[1] SDIC Power Holdings Co., Ltd Reports Earnings Results for the Half Year Ended June 30, 2025 [https://www.marketscreener.com/news/sdic-power-holdings-co-ltd-reports-earnings-results-for-the-half-year-ended-june-30-2025-ce7c50dddc8fff2d]
[2] First Quarter 2025 Operating Results [https://markets.ft.com/data/announce/detail?dockey=1323-16999640-52MBFJIVVS3AB962NHPBEGRTK2]
[3] SDIC Power: Riding the Renewable Wave Amid Transition Pains [https://www.ainvest.com/news/sdic-power-riding-renewable-wave-transition-pains-2507/]
[4] SDIC Power Holdings - First Quarter 2025 Operating Results [https://www.research-tree.com/newsfeed/article/sdic-power-holdings-first-quarter-2025-operating-results-2814515]
[5] First Quarter 2025 Operating Results [https://www.investegate.co.uk/announcement/rns/sdic-power-holdings-co-ltd--sdic/first-quarter-2025-operating-results/8839891]