China to revamp coal-fired power to help ailing industry

Bloomberg

China is pursuing a three-year pilot programme, led by five of its biggest utilities, to integrate and cut some coal-fired power capacity to help the debt-saddled industry, state media
reported.
The pilot, which runs through 2021, will seek to consolidate coal-power assets within five northwestern regions and reduce their capacity by up to one-third, according to a Shanghai Securities News, citing sources it didn’t identify.
State-owned Assets Supervision & Administration Commission, which oversees the utilities, didn’t immediately respond to a faxed request for comment. Nobody answered calls to the media offices of the five companies — China Huaneng Group Co, China Datang Corp, China Huadian Corp, State Power Investment Corp and China Energy Investment Corp.
The five firms had a combined 520 gigawatts of coal-fired capacity at the end of last year, according to the Shanghai Securities News report, adding that those coal-power units had total combined liabilities of 1.1 trillion yuan ($156 billion) and assets worth 1.5 trillion.
China’s coal plants are distributed across 30 provinces and territories, of which 15 saw losses in the coal and power business last year, according to the report.
Several of the companies’ listed affiliates advanced. Huaneng Power International Inc rose 3.8% in Hong Kong, one of the biggest gainers on the MSCI Emerging Markets Asia Utilities Index, which was up 0.7% on the day. Inner Mongolia Mengdian Huaneng Thermal Power Corp gained 3.5% while Datang International Power Generation Co added 2.1%.
Coal plants nationwide ran at only 49% of their capacity during the third quarter, BloombergNEF analyst Hanyang Wei said in a report, citing slower overall demand growth as the trade war impacts the economy, as well as competition from nuclear and hydropower.