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China's big five power generation companies: Datang Corpeoration, Guodian Corperation, Huadian Group, Huaneng Group and China Power Investment Corperation have suffered total losses of 18.09 billion yuan ($2.8 billion) from their thermal power generation businesses in the first seven months of the year, widening their losses by 11.3 billion yuan year-on-year, according to the China Electricity Council (CEC).
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According to the Chinese National Bureau of Statistics, gross margins of thermal power generation enterprises dropped significantly due to higher coal prices, causing the losses.
Coal supplies in central China are tight at the moment, with total coal inventory in Hunan province at 1.4 million tons, sufficient for just 12 days’ of power generation, according to a senior manager from a Hunan subsidiary of one of the big five power generation companies.
The senior manager further predicted that a tight power supply situation during winter is inevitable if there are no improvements in Chinese hydro generation.
The secretary general of the CEC said the prices of both on-grid and distribution electricity will be raised annually in future in order to ease the pressure on thermal power generation companies.