Beijing to give nuclear go-ahead

PUBLISHED : Tuesday, 23 August, 2011, 12:00am
UPDATED : Tuesday, 23 August, 2011, 12:00am


Beijing is likely to resume approving new nuclear power projects after recently completing a round of safety checks, according to the head of China Resources Power Holdings' (CRP) new energy unit.

Zhang Shenwen, executive director of CRP and general manager of China Resources New Energy Holdings, said the central government had 'pretty much finished' reviewing safety standards of all operating nuclear plants and those being built.

'The results have been compiled but not announced,' he said. 'Overall, the results are quite positive. I think the next round of investment in coastal regions will probably be even greater than at present.'

Asked if the Taohuajiang nuclear project in Hunan province, which CRP has a 25 per cent stake in, faces approval delays, Zhang said that since the project is among the first inland nuclear plants on the mainland, construction will start 'soon'.

Harbin Electric, one of the mainland's three largest power generation equipment makers, has a more cautious outlook on the nuclear sector, whose expansion has been stalled after Japan's Fukushima nuclear disaster in March.

Company secretary Ma Sui said approval of new projects was unlikely in the second half of this year, and changes to Beijing's 2020 nuclear power capacity targets may not be known until next year.

Harbin received only 200 million yuan (HK$243.57 million) worth of new orders from nuclear plant developers in the first half of 2011, down sharply from 6.19 billion yuan in the same period last year.

On Friday the firm reported a 29.3 per cent growth in first-half net profits to 577.36 million yuan.

Harbin's share price jumped as much as 7.7 per cent yesterday, as its profits were 10.8 per cent higher than analysts expected, according to BOC International's head of utilities research Peter Yao Sheng.

Excluding a 291 million yuan loss on stock investments, pre-tax profits jumped 63 per cent, mainly due to a 3.5 percentage point rise in gross profit margin to 17 per cent, as the firm produced more hydro units and coal-fired power generators that command higher margins. Revenue was flat at 14.6 billion yuan.

Citi utilities analyst Pierre Lau said that Harbin's overall second-half profit margin was expected to be lower than in the first half but higher than last year's 14.4 per cent. New orders in the first half of 2011 jumped 66 per cent year-on-year to 25.5 billion yuan.

CRP yesterday posted a 1 per cent rise in net profit to HK$2.48 billion, as power price rises and government subsidies partially offset an 11.7 per cent rise in fuel cost per unit of output.

Operating profit from coal mining jumped 51 per cent to HK$1.28 billion. Revenues rose 37 per cent to 29 billion yuan.

With coal prices having fallen about 3 per cent in the past six weeks, president Wang Yujun said CRP was confident it could keep full-year fuel cost increases below 10 per cent.

Yesterday Xinhua, quoting the mainland's power industry body, China Electricity Council, said the central government had not raised energy prices by enough to offset coal cost increases. As a result, the mainland's big five state-owned power generation companies posted 18 billion yuan worth of losses in the first seven months of this year, up from a combined 11 billion yuan loss in the same period in 2010.