Generators plead for further tariff rises
The coal-fired power plants of the mainland's five state-owned electricity generators together posted a loss of 1.69 billion yuan (HK$2.03 billion) for May as the benefits of a rise in the tariffs charged to distributors in April were eaten up by higher coal costs, adding to pressure for Beijing to lift power prices again later this year.
The loss in May was comparable to that in April, Xinhua quoted generators representing China Electricity Council as saying.
In April, Beijing raised power prices by an average 0.7 per cent, applied retrospectively from the start of last year. It separately gave an average hike of 1.95 per cent effective from April 10, according to calculations by Citi. Last month, it further increased the average tariff by 0.5 per cent, effective from June 1.
'But [the April 10] round of power price rises has not fully reflected the accumulated impact of coal price increases,' the council was quoted as saying. 'In addition, [the] coal price has kept on rising since April.'
Benchmark power-station coal fetched 839 yuan per tonne in the first week of this month based on the Bohai Rim Steam-Coal Price Index, which covers spot prices in six coal ports in northern China, up 8.1 per cent from early April, according to Dow Jones.
In the first five months of the year, coal-fired plants of the big five national state-owned generators, which account for just under half the nation's generation capacity, together recorded a loss of 12.16 billion yuan, widening from a loss of 7.86 billion yuan in the same period last year.
When profitable non-coal plants are included, the big five had a loss of 5.57 billion yuan in the five months. The council said coal-plant operators' average debt-to-asset ratio stood at 73.8 per cent at the end of April.
'We think another round of on-grid tariff [charged by generators to distributors] rises is possible after [increases on] June 1,' wrote Citi head of regional utilities research Pierre Lau in a report.