China's thermal power plants to see more losses

Updated: 2011-02-26 14:24
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BEIJING - China's thermal power plants may suffer more loss this year as rising coal prices on global markets will drive up domestic coal prices, said a report released Friday by the China Energy Research Society (CERS).

"The economic recovery around the world, especially in emerging economies, will boost coal demand and push up coal prices, and cause China's coal prices to hike," said the report.

The CERS forecast that the domestic prices of coal for power generation would rise by around 30 yuan ($4.5) per ton in comparison with last year, slashing the profitability of thermal power producers. China's thermal power plants suffered a total loss of 32.9 billion yuan ($5 billion) in 2010, according to the China Electricity Council, a consolidated organization of China's power businesses at the approval of the central government.

The five largest power producers, China Huaneng Group, China Datang Group, China Huadian Group, China Guodian Corp and China Power Investment Corp lost 12.4 billion yuan in their thermal power plants.

Yun Gongmin, general manager of China Huadian Group, said they were facing great pressure from rising coal prices and environmental protection.

China Guodian's general manager Zhu Yongpeng said the corporation's profitability was low, and a large proportion of its thermal power plants were suffering loss.

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"The surge in coal prices last year reduced the profits of Guodian by 11.75 billion yuan. This year, the price of coal is very likely to rise," said Zhu.

Developing clean energy has become a consensus among the country's five power giants, and is seen as an important task for them.

Guodian's hydropower capacity topped 10 million kilowatts last year, and its investment in clean energy accounted for 54.5 percent of its total investment in power generation.

China Huadian's newly-installed capacity of clean energy was 72 percent of its total new capacity last year, and the company is planning to increase the proportion of its clean energy capacity to 30 percent by the end of 2015.

New energy and environmental protection technologies are among the seven new strategic industries supported by China's central authorities, according to the Proposal on Formulating the Twelfth Five-Year Program (2011-2015) on National Economic and Social Development, released in October 2010.