The Change Mariner

China Power plants hunger for coal - but need more efficient markets

xinhuanet:
Seven major electricity producers in China have recently appealed for state intervention to solve their acute coal shortages, which has gravely hampered normal electricity production.

In the petition, filed to relevant departments of the central government, the seven enterprises asked these departments to issue explicit directions on coal and electricity prices to avoid a power supply crisis.

The petition noted that most power plants in central and north China now face shortages of coal. Coal reserves in these power plants have dropped below the warning level. Some plants even have been compelled to shut down their generators.

According to the petition, filed by China Huadian Group, China Huaneng (Chng) Enterprise Group and five other major power producers, the shortage is spreading to more areas.

An official with China Huaneng Enterprise Group, who asked not to be named, said electricity pricing is still subject to government approval at present, while coal prices have already been permitted to float in line with market demands.

"Coal prices have kept rising since last year. The level of coal prices has reached such a stage that it's difficult for powerplants to continue normal production without adjustments in eithercoal or electricity prices," said the official.

According to the official, around 75 percent of China's power supply comes from coal-fired power plants at present. Coal accounts for 50 to 60 percent of power generation cost.