70 percent of chinese power firms make losses

Thanks to reliance on coal. That doesn't even allow for the recent 100% increases in imported coal. Electricity price rises are a near certainty, so will be the governments determination to move to alternative energy sources.


More than 70 pct of China power firms making losses - SASAC
04.14.08, 10:46 PM ET


BEIJING (XFN-ASIA) - More than 70 pct of China's state-owned power generation firms are currently making losses, an official with the State-Owned Assets Supervision and Administration Commission (SASAC).

High coal prices coupled with fixed power tariffs are responsible for the losses, and could eat into investments in energy saving and pollution control, said SASAC official Liu Nanchang during an interview with the official government website, www.gov.cn.

'Of course, I hope that at an appropriate time, related state departments adopt effective measures to resolve the problems,' Liu said.

'This call is based on one condition, that price stability can basically be maintained and the difficulties of enterprises can be considered in an appropriate manner,' he added.

However, he also noted that the big state-owned firms were still making money from non-coal-fired power, and should not use high coal prices as an excuse to cut back on environment-related investments.

He said that in 2007, China's power plants consumed 357 grams of standard coal for each kilowatt-hour of electricity produced, higher than the international average of 317 grams, and that there was still great potential for savings.

Last week, the China Electricity Council said that 40 pct of China's 4,773 power firms made losses in the first two months of the year, and that profits were down across the board as a result of record high coal prices, fixed tariffs and the freak weather conditions that struck southern China over the period.