Mainland firms play Singapore power game

PUBLISHED : Monday, 27 August, 2007, 12:00am
UPDATED : Friday, 08 May, 2015, 9:33am

Several mainland power producers, including China Resources Power, Datang International Power Generation and China Power International Development, are considering bids for power generating assets owned by the Singapore government valued at about US$2 billion each, market sources said.

Unlike mainly coal-fired power plants on the mainland, the three Singapore power plants up for sale with a total production capacity of 9,000 megawatts are plants powered by natural gas and oil.

Because of the difference in fuel source, the mainland companies 'are working on what value they can add', said a source.

Still, with Beijing pushing for cleaner sources of fuel, the acquisition of such assets may help mainland power companies develop expertise, power industry analysts said.

'Exposure for them in other countries running gas plants will benefit them in terms of management experience, given the mainland's energy efficiency goal of diversification into natural gas and all sorts of alternative power sources,' said Nomura Securities analyst Donovan Huang.

China Resources and Datang declined to comment. China Power could not be reached for comment. Temasek also declined to comment.

Coal-fired power accounted for 86 per cent of national electricity output in the first half of this year, up from 83 per cent last year, China Electricity Council figures show.

Temasek Holdings, the investment arm of the Singapore government, in June said that it planned to sell Senoko Power, PowerSeraya and Tuas Power. Senoko Power is the largest of the three companies with 3,300 megawatts of capacity followed by PowerSeraya with 3,100MW. Tuas can produce 2,670MW.

The mainland's total electricity generation capacity surpassed 650 gigawatts at the end of June, thanks to the addition in just six months of 38.75 GWs in new plants - roughly the capacity of the entire power industry in Taiwan.

This came after the industry commissioned 105 GW last year, a third more than Britain's total capacity and a record addition anywhere in the world.

The development of natural gas-fired plants, which emit fewer pollutants than those powered by coal and oil, has been hampered in the mainland because of a shortage of gas supply and tariffs kept low by a government fearful of inflation.

Packing power

Mainland electricity generation capacity surpassed, in gigawatts, 650