The mainland's power generation industry is losing money so far this year due to higher coal costs and the lack of power price rises, said China Resources Power Holdings chief executive Wang Shuaiting. Beijing's failure to properly implement a mechanism that allows power producers to pass on higher coal costs to consumers means generators are still 'owed' almost 5 fen per kilowatt-hour of power sales, he said. If CRP's average power selling price last year of 0.414 yuan per kWh is used as a rough estimate for the industry average, the price gap amounts to 12 per cent. Wang said a power price increase is unlikely in the first half this year. 'Our judgment is that any price rise will likely only take place in the second half and the amount will depend on coal prices, especially spot market prices,' he said. 'We think an increase of 2 to 3 fen per kWh would be fair from the point of view of the government, consumers and generators.' Wang's comments came as CRP, the fourth largest Hong Kong-listed mainland power producer, but the most profitable, posted a 209.6 per cent jump in net profit to HK$5.32 billion for last year from HK$1.72 billion in 2008. Despite the problems, he said CRP's financial performance is 'much better' than the industry in general in the first quarter this year. In 2005, the National Development and Reform Commission which sets the power prices came up with a 'coal cost pass-through' mechanism, under which it would raise power prices if coal costs rose by more than 5 per cent in a six-month period, so that 70 per cent of the increased costs could be passed on to power distributors and consumers. Since then, however, power prices have only been raised three times, lagging way behind the amount implied by the mechanism, as policymakers held back for fear of stoking inflation and social unrest. CRP's profit growth last year was underpinned by a 16.2 per cent growth in output - mainly from new plants, a 5.4 per cent rise in the average power selling price and a 12.9 per cent fall in coal costs per unit of power produced. Coal costs accounted for 73 per cent of operating expenses. CRP has secured 90 per cent of this year's expected coal consumption of 60 million tonnes by annual contracts. Wang estimates this year's fuel cost per unit of power output to rise 10 per cent from last year. To hedge coal price risks, CRP has been investing heavily in coal mines. Wang said it plans to produce 30 million tonnes of coal in 2012 from mines it wholly or partly owns, up from 16million tonnes this year and 4.1million tonnes last year. This would lift its coal self-sufficiency ratio to 35 per cent in 2012, from 8.2 per cent last year. To cut its reliance on coal, CRP plans to raise the proportion of its renewable energy plants to 10 per cent of its total generation capacity by 2013, from 3 per cent currently. It plans to spend 6 billion yuan building wind farms, 1.5 billion yuan on hydro plants and 6.7 billion yuan on coal-fired plants. It also budgeted 7 billion yuan to acquire additional coal mining rights.