Wind power and equipment maker shares slide 6pc by midday

Shares of the mainland's wind farm operators and equipment makers slid yesterday on news that the industry regulator is consulting participants on cutting power prices by an average 6 per cent on wind farms that start operation from the middle of next year or later.

State-backed China Longyuan Power Group Corp closed 0.86 per cent lower at HK$8.11 after falling as much as 3.2 per cent, while rival Huaneng Renewables Corp lost 0.72 per cent to HK$2.75 after shedding as much as 4 per cent. Privately owned China WindPower sank 5.5 per cent to 69 HK cents.

Equipment makers also fell. Xinjiang Goldwind Science & Technology eased 2.76 per cent and China High Speed Transmission Equipment Group dropped 1.26 per cent.

The long-expected proposed tariff cut, the first since Beijing set regional subsidised wind power prices in 2009, is aimed to reflect lower wind turbine costs and relieve the financial pressure on the government and consumers that have to bear the costs of rising consumption of clean energy.

The average price of a 1.5-megawatt turbine has fallen about 36 per cent to 3.44 million yuan (HK$4.3 million) per megawatt from five years ago, according to a Citi research note.

The National Development and Reform Commission has proposed to cut each of the current regional benchmark per kilowatt-hour tariffs of 51 fen, 54 fen and 58 fen by four fen, and the 61-fen benchmark by two fen, China Business News reported. The average cut is 6.4 per cent.