Datang aims to increase generating capacity 57pc

China Datang Group, one of the mainland's top five power producers, aims to invest more than 139 billion yuan to increase its electricity generating capacity by 57 per cent over the next four years.

Generating capacity of the Beijing-based group will increase to at least 85,000 megawatts by 2010 from 54,059 megawatts as at the end of last year, according to president Zhai Ruoyu.

Capacity of the group's Hong Kong-listed arm, Datang International Power Generation, would increase to at least 30,000 megawatts by 2010 from 19,430 megawatts at the end of last year, said Mr Zhai, who is also the chairman of the listed firm.

The investment will amount to between 139 billion and 155 billion yuan based on the building cost of between 4,500 and 5,000 yuan per kilowatt provided by Mr Zhai.

The group, despite its heavy investment plans, did not have an urgent need to raise funds through the equity market as its subsidiaries could fund their own projects by project finance or through other channels.

'The nation's fast-growing economy will continue to provide great potential for the development of the power industry as the nation's per-capita generation is still lower than the world's average,' he said.

Mr Zhai said the group did not have immediate plans to list all its assets or to inject its two Shanghai-listed units - Guangxi Guiguan Electric Power and Hunan Huayin Electric Power - into Datang International.

Both the group and its listed firms were striving to increase capacity by building new plants to enhance their market share rather than focus on asset injection by the parent company.

At the end of last year, Datang Group's capacity was about 8.7 per cent of the national total of 622,000 megawatts, up from 8 per cent a year earlier.

Datang International was expected to increase its power generation by 20 per cent this year while plant utilisation would stabilise as demand in its main service area - the Beijing-Tianjin-Tangshan region - was strong, Mr Zhai said.

The company's new capacity will grow at a slower rate than last year.

Datang International's plants average utilisation fell 9 per cent last year to 5,756 hours, from 6,320 hours a year earlier, as it increased capacity by 41 per cent, or 5,620 megawatts. That was the company's largest commenced capacity addition in a single year since 1994, vice-president Yang Hongming said.

This year, 3,494 megawatts new capacity would start production, including 2,300 megawatts of coal-fired units, 1,150 megawatts of hydropower units and 44 megawatts of wind power units, Mr Yang said.

Datang International said it would increase capacity from renewable sources - wind, nuclear and hydro - to about 35 per cent of its total by 2015, from 2 per cent last year.