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On-grid energy price hike to take heat off power firms

By Wan Zhihong (China Daily)
Updated: 2008-08-20 07:40

A power plant in Huaibei, Anhui province in this photo taken on August 9, 2008. China raises on-grid electricity tariffs Wednesday, in a move to reduce domestic power producers' losses and help boost supplies.[Asianewsphoto]

China raises on-grid electricity tariffs Wednesday, in a move to reduce domestic power producers' losses and help boost supplies.

The on-grid price of power supplied by the country's coal-fired plants will rise by 0.02 yuan (0.28 US cent) per kWh - an average of 5 percent - beginning today, the National Development and Reform Commission (NDRC) said on its website yesterday. The retail power price will remain unchanged.

The government will continue its price controls on coal used for power generation, said the NDRC, the country's top economic planning body.

Analysts said the move would help ease the difficulties faced by the country's power firms, whose profits have been squeezed by soaring coal prices.

"Rising coal prices have put great pressure on the country's power plants as well as electricity supplies across the country," said Xue Jing, director of the department of statistics and information under the China Electricity Council (CEC).

According to the CEC, thermal coal prices at Qinhuangdao, one of the country's major ports for coal delivery, increased by over 300 yuan ($43) per ton between April and June.

Soaring coal prices have plunged most of China's power companies into the red. The country's five leading power firms, Huaneng, Datang, Guodian, Huadian and China Power Investment all said their power generation businesses are expected to suffer losses in the first half of this year.

Figures from the National Bureau of Statistics showed that in the first five months of this year, total profits in the country's power sector were 17.28 billion yuan, down from 59.23 billion yuan in the same period last year.

The country's coal-fired power plants incurred losses of 2.29 billion yuan from January to May, down 108.54 percent year-on-year.