From Chinese media
Rising fuel prices cut into power producers' profits
Updated: 2011-04-01 15:31
By Yu Hongyan (chinadaily.com.cn)
With electricity generation increasing in 2010, China's major power producers saw their profits dwindling due to rising fuel prices, the International Finance News reported Friday.
As revealed in their 2010 annual reports, three of China's five major power producers experienced a drop in their net incomes.
Huadian Power International Co Ltd (HDPI) saw its net profits fall 81.94 percent year-on-year to 207 million yuan ($30.78 million), and Huaneng Power International Inc's declined by 30.24 percent to 3.54 billion yuan. GD Power Development Co Ltd said its net income dropped 3.83 percent year-on-year to 2.4 billion yuan.
In comparison, power generation of the three all grew more than 20 percent year-on-year, with HDPI’s going up 21.23 percent year-on-year to 130.29 billion kilowatt-hour (kWh), Huaneng Power's growing 26.25 percent to 256.95 billion kWh, and that of GD Power increasing by 20.47 percent to 128.42 billion kWh.
Analysts say the power producers' shrinking profits come as a result of rising fuel prices.
HDPI's fuel cost came to 264.92 yuan per kWh, up nearly 20 percent year-on-year, according to the paper.
Huaneng Power paid 67.9 billion yuan to buy coal last year, an increase of 51 percent from 2009, the company said in its annual report.
China Energy Research Society said that domestic prices of coal for power generation would rise by about 30 yuan per ton from last year, slashing the profitability of thermal power producers.
In the face of rising fuel costs, some power producers strove for coal resources for relief and others turned to renewable energy for growth, the paper said.
GD Power has invested heavily in hydropower and wind power, and Huadian's newly installed capacity for 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, according to a previous Xinhua report.
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