Update | Coal giant China Shenhua Energy to get bigger in power generation

China Shenhua Energy, the listed unit of the world’s largest coal supplier Shenhua Group, aims to complete by year-end the acquisition of 3.5 gigawatts of coal-fired power plants from its parent as part of the latter’s five-year asset injection plan.

The plants, including the mainland’s first commercialised “ultra-low emission” coal-fired power plant, together with 7.65 GWs of new plants slated to come on stream this year, would help raise China Shenhua’s profit from its power business further to levels closer or exceeding that of its coal operations in the next few years. It had 40.9 GWs of installed capacity at the end of last year.

“Work on the asset injection is in progress ... we expect by year-end to be able to complete the first batch of assets that include the nation’s first commercialised ultra-low emission coal-fired plant in Zhoushan, Zhejiang,” vice chairman Ling Wen told reporters on Monday.

He said such plants’ emission in soot, nitrogen oxides and sulphur oxides are lower than the emission standards required for the mainland’s natural gas-fired power plants.

Shenhua Group last June said it planned to inject 14 subsidiaries by the end of June 2019 into China Shenhua, encompassing mines with 140 million tonnes of annual coal output capacity, 24.96 GWs of power plants and plants capable of turning coal into 11.3 million tonnes of liquid fuel annually.

Ling would not be drawn on whether power generation will overtake coal mining as a profit contributor this year or next year, saying he is bound by listing rules not to give profit forecasts and a potential power tariff cut could reduce the profitability of power generation.