China Resources Power

CRP 'has no plans' to play Hong Kong's power game

PUBLISHED : Tuesday, 18 March, 2014, 1:11am
UPDATED : Tuesday, 18 March, 2014, 1:11am

China Resources Power played down a recent call by two of its senior executives for Hong Kong to "nationalise" local power supply assets after it posted a 47 per cent profit rise for last year.

President Wang Yujun said the opinion expressed by Li Jinying, deputy general manager of its new energy business, and Tan Xinjian, head of its nuclear power operation, to the Hong Kong government at a meeting in September was purely their own.

"These are their personal opinion, not that of the company," he said. "[CRP] has no participation in Hong Kong's power business and has no plans to."

Tan was quoted by a Hong Kong newspaper on Monday as having proposed that the city's utilities assets, controlled by CLP and Power Assets, be taken over by mainland entities after the current regulatory regime expired in 2018 to avoid social discontent due to power price rises.

The government is to start discussions with the incumbent monopolies on post-2018 regulations soon.

The spokesman for Hongkong Electric, a unit of Power Assets, said the existing regime "works well" and "could achieve the government's policy objectives".

CRP yesterday posted a net profit of HK$11 billion, up from HK$7.48 billion in 2012 and in line with analysts' estimate. Sales grew 11.4 per cent to HK$69.58 billion on the back of a 12 per cent rise in sales volume due to new plant startups and a 0.6 per cent fall in average selling price.

The profit growth was driven mainly by a 16.3 per cent decline in the average fuel cost per unit of output due to lower coal costs. Coal costs took up 60 per cent of the firm's operating expenses last year.

Coal price at the mainland's largest coal port in Qinhuangdao has fallen 13 per cent this year amid oversupply. Wang said there was limited room for further declines since loss-making miners would cut output at lower levels to stem losses.

He said there was no indication from Beijing whether it would lower power prices, but added conditions for a cut would be fulfilled if prices fell further based on a formula for adjustment. The government last cut prices in September.

Chief financial officer Wang Xiaobin said CRP had budgeted HK$24 billion for new projects this year, including HK$16 billion for coal-fired plants, HK$6 billion for wind and solar farms and HK$2 billion for coal mines.

It aims to raise generating capacity by 15.3 per cent to 31 gigawatts this year and by a further 15.5 per cent next year to 35.9 GW. It will build its first solar farm this year, a 20-megawatt project in Gansu province.