Huaneng Power to cut generation capacity amid flood of new supply

Huaneng Power International, the mainland's largest listed power producer, plans to cut generation capacity growth this year by as much as half, as a flood of new supply is expected to lead to a decline in plant utilisation.

Huaneng Power, a unit of state-owned China Huaneng Group, would add 2,800 to 3,800 megawatts of new plants this year, chairman Li Xiaopeng said yesterday.

That represents a 10.4 to 14.1 per cent increase from its gross installed capacity of 26,912MW at the end of last year, compared with 20.9 per cent growth last year.

Huaneng Power and other mainland electricity suppliers are adding fewer plants after years of rapid capacity growth to meet the country's soaring energy demand.

The mainland's total generation capacity is forecast to slow to 95,000MW, or 15.2 per cent this year, from 105,000MW, or 20.3 per cent last year, according to the China Electricity Council.

'The addition of 7,000MW of capacity last year, mostly in the second half, will drive [Huaneng Power's] output growth this year,' Mr Li said.

Output growth is unlikely to come from the purchase of its parent firm's 6,000MW of coal-fired plants, as Huaneng Power's vice-chairman Huang Long said operating performance of those plants did not meet its acquisition standards.