China Datang expects use of wind farms to rise in second half
Weak resources in the first half result innet loss for the mainland power company
China Datang Corp Renewable Power, the wind and solar power unit of one of the mainland's big five national power generation groups, expects wind farms utilisation to pick up in the year's second half after dropping in the first half because of weak wind resources and causing the firm to fall into a net loss.
The Hong Kong-listed unit of China Datang Group was aiming for full-year plant utilisation of at least 1,850 hours, down 7.6 per cent from 2,001.5 hours in last year's first half, vice-chairman Hu Yongsheng said.
This implies second-half utilisation is targeted to be 942.2 hours, down 0.5 per cent from 947.1 hours in last year's first half.
"The first-half low wind speed was unexpected and saw national average wind farms utilisation fall [10.3 per cent year on year]," Hu said. "Judging from July and August's figures, we expect a pickup in the second half."
China Datang on Friday posted a first-half net loss of 14.4 million yuan (HK$18.1 million), compared with a 231 million yuan profit in the same period last year.
Revenue fell 6.8 per cent to 2.57 billion yuan, with a 9.1 per cent drop in wind power output partially offset by a 2.8 per cent rise in average power price.
The output fall was because of a 10.4 per cent decline in average wind speed, even as the firm increased its wind installed generation capacity by 3.7 per cent.
Its average plant utilisation fell 13.9 per cent, because the wind speed drop was accompanied by continued power grid bottlenecks from lagging power grid expansion compared with new wind farms' installation.
This is despite first-half output curtailment from the bottlenecks falling to 14.3 per cent from 18.9 per cent in last year's first half, and 21.3 per cent in the whole of 2012, as more power grids were built.
Although Datang, like larger rival China Longyuan Power, installed no new wind farms in the first half, both maintained their full-year targets.
Datang is aiming to add 0.6 to 0.8GW this year, with the bulk to be added in the fourth quarter.
Although its net debt-equity burden rose to 423 per cent at the end of June from 411 per cent a year earlier, Chen Song, Datang's chief financial officer, said he saw no difficulty in raising funds to execute its project pipeline of 10.7GW because it expects institutional investors to continue to support its development.