China top power companies lose $1.5 bn on thermal generation

BEIJING: China's five state-owned power generating groups lost more than 10 billion yuan ($1.5 billion) on their thermal power operations in the first four months of the year, an industry official said, as the country braces for the worst summer power crunch in years.

With profitable wind and hydropower businesses included, overall power generation losses narrowed to 6 billion yuan, Xue Jing, director of the statistics and information department under the China Electricity Council, said on the sidelines of a conference in Beijing on Tuesday.

The council, representing major power generating and distributing companies, is overseen by the State Electricity Regulatory Commission.

The losses came after the five groups, parents of China Power International Development Ltd. Datang International Power Generation Co Ltd, Huadian Power International Corp Ltd. and Huaneng Power International Inc. racked up more than 60 billion yuan in losses from thermal power over the past three years, putting pressure on the government to consider power tariff increases to encourage generation in coming months when demand rises.

The five groups own about half of total domestic power generating capacity.

The government was reported to have increased on-grid power tariffs in parts of the country last month, but industry officials and analysts said the rise was too small to restore profitability for many coal-fired power generators.

The National Development and Reform Commission, the price-setting agency, did not confirm the increase.

China has largely lifted price controls on coal, the energy source for more than 80 percent of its power generation, but tightly regulates on-grid and retail power prices, making it hard for generators to pass on rising coal costs to power users.