Economy

Coal costs drive power producers into the red

(Xinhua)
Updated: 2011-06-20 21:35

BEIJING - China's five biggest power companies have reported increasing losses in their thermal power business ventures as they continue to struggle with rising coal costs and capped electricity prices.

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Combined losses for the five companies' thermal power ventures reached 12.16 billion yuan ($1.87 billion) in the first five months of this year, almost triple that of last year, the China Electricity Council (CEC) said Monday.

These losses translated to an overall decrease in profits for the companies, with a total of 5.57 billion yuan in combined losses for the companies during the first five months of this year, the CEC said.

The five power magnates include the China Huaneng Group, China Datang Corp., China Huadian Group, China Guodian Corp. and China Power Investment Corp. These companies provide about half of the country's power.

The council warned that these companies' financial woes will make it more difficult to ensure adequate supplies of power for the summer, when electricity usage peaks.

According to the Bohai-Rim Steam-Coal Price Index, China's benchmark power coal prices averaged 841 yuan per metric ton from June 8 to 14, up 0.2 percent from a week earlier. The benchmark price has been on the rise since March 16.

Last month, the government raised prices for electricity used for industrial, commercial and agricultural purposes across the country's 15 provinces and municipalities by 16.7 yuan per 1,000 kilowatt-hours (kwh) in order to ease financial pressures on the country's power companies.

However, prices for residential electricity remained unchanged.