China Investing in Hydro Stocks
Chinese solar power companies have been all the rage in the investment world, but the country's state-of-the-art hydroelectric power companies may be a better bet for those looking at China investing for sustainable returns. Hydroelectric power is a big part of China's energy plans, with leaders there planning to offer special incentive tariffs to the industry. It is already the hydroelectric capital of the world in terms of project numbers and megawatts of capacity.
Hydro in China is cheaper then in most other places, and returns on hydro projects are expected to outpace other forms of energy generation in the country. Specifically, returns on equity(ROE) for China Hydroelectric Corp.(CHC) is around 13%. This compares favourably to a world average for hydro of 7-8% ROE. These enhanced returns are a function of lower construction and operating costs, and better capacity utilisation rates and tariff structure.