Chinese power providers face increasing summer losses

• 12 years ago (2011-06-24)
• Junior Isles

Asia 848 North America 998

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China's five largest state-owned power generating groups have continued to rack up losses in their thermal power generation businesses, despite the Chinese government raising power prices in April, the China Electricity Council (CEC), an industry group that represents power generators and distributors, said.

Losses were attributed to rising coal prices, causing the parents of Huaneng Power International, Huadian Power, Datang International Power Generation Co, China Power International and GD Power Development Co to lose 1.69 billion yuan ($261 million) in May, the council said in a report.

These firms' thermal power businesses lost an accumulated 12.2 billion yuan in the first five months of this year, compared with losses of 4.3 billion yuan a year earlier the council reports.

"In general, persisting operational difficulties pose a large risk on summer power supply," said the council.

China has warned of the worst summer power crunch in years as many coal-fired power plants, the mainstay of power supply, are generating at a loss due to rising coal costs and rigid power price caps.

Meanwhile, the increase in electricity demand remained fairly strong despite only modest economic growth.

The National Development and Reform Commission (NDRC), raised feed-in tariffs that coal-fired power plants sell to grid operators in 12 provinces from April 10 and another three provinces from June 1 around 5 per cent.

The authorities also lifted retail power prices that grid operators charge non-residential users in 15 provinces by about 3 per cent from June 1, effectively passing on most of the increase in grid feed-in tariffs to consumers.