China Power to bulk up in bid for 10pc of market
China Power Investment Corp, one of five state-owned national power generation groups, aims to raise its market share to 10 per cent from 6 per cent over the next 13 years by more than tripling its generation capacity.
However, some analysts said the goal was too aggressive, given stiff competition from rivals and an expected slowdown in power demand growth as the mainland shifts its development focus away from power-intensive heavy-industry sectors towards service industries.
Industry leader China Huaneng Group has a 10 per cent market share by capacity. The parent of Hong Kong-listed China Power International Development - led by Li Xiaolin, the daughter of former premier Li Peng - aimed to raise its installed capacity to 70 gigawatts (GW) by 2010 and 140 GW by 2020, from 43 GW at the end of last year, it said in a statement after its annual planning meeting.
The mainland's total generation capacity stood at 713 GW, according to the China Electricity Council. State monopoly power distributor State Grid Corp last year projected it would rise to 852 GW by 2010 and 1,330 GW by 2020.
'[China Power]'s expansion and market share goals look aggressive, because other state power groups are also expanding their capacity,' said Lin Boqiang, the director of the Centre for China Energy Economics Research at Xiamen University.
'The only way for it to achieve the targets will be for it to engage in large-scale acquisitions of regional and local government-controlled power companies, but even this is not exclusively pursued by China Power Investment Corp. Other companies are also vying for the same targets.'
Mr Lin also expected the mainland's power demand growth to slow to an average of 7 per cent in the next decade, compared to the 13.5 per cent to 16 per cent seen in the past five years, which would require slower capacity expansion.
The mainland's total capacity doubled in the past five years, implying an average annual growth rate of 15 per cent, exceeding government planners' expectations.
China Huaneng and China Datang Group are also expected to overshoot their 2010 capacity targets set only as recently as 2006.
To reduce its reliance on external coal suppliers, China Power said it aimed to more than double its coal production capacity to 70 million tonnes by 2010 from 34 million tonnes last year.