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Coal-fired power sector may suffer overall losses amid capacity cut in 2017

2016-12-30 11:16

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China's coal-fired power sector is likely to suffer overall losses in 2017, as the growth room for the industry is becoming increasingly limited amid the government-led move to phase out excess capacity.

Nur Bekri, head of the National Energy Administration and deputy head of the National Development and Reform Commission, made the remarks at the annual national energy work conference on Dec. 27.

According to Economic Information Daily, the installed capacity of coal-fired power is expected to reach 950 million kilowatts in 2016.

With projects under construction and those permitted to start construction included, the total installed capacity of the country's coal-fired power is estimated to hit 1.13 billion kilowatts, exceeding the ceiling of 1.1 billion kilowatts set in the development plan for 2016-2020.

In contrast to the fast expansion of installed capacity, the growth of China's power consumption has kept slowing down in the recent two years, which stood at merely 0.5 percent in 2015 before picking up to 5 percent for the January-November period of 2016.

Meanwhile, the average use time of thermal power generating facilities has also kept reducing, logging 3,756 hours for January-November of 2016, 204 hours less than the year-earlier period and the fewest since 2005.

"(It) is going to be around 4,300 hours this year. And next year will be even less, about 4,100 hours," Nur Bekri was quoted as saying.

Still worse, with the efforts to cut excess coal capacity intensified, the thermal coal prices have bottomed out in June this year and have rebounded ever since.

Sandwiched by hiking price of raw material and slowing consumption growth, the thermal power generating sector is doomed to face a tough year ahead.

Of the country's 30 A-share listed thermal power companies with coal-fired power as main business, 70 percent recorded negative growth in operating income in the first three quarters of this year.

Nur Bekri disclosed the Chinese government will further tighten control over the thermal power sector, and asked energy authorities at all levels to keep a tight grip on planned projects and those under construction.

According to information from the conference, China's total energy output is predicted to reach 3.67 billion tonnes of coal equivalent in 2017, coal output will hit 3.65 billion tonnes, crude oil, 200 million tonnes, and natural gas, 170 billion cube meters.

Next year, the country will start construction of hydropower projects with installed capacity of 20 million kilowatts and nuclear power projects with installed capacity of 10 million kilowatts.

In the meantime, newly added installed capacity of wind power and photovoltaic power is expected to hit 20 million kilowatts and 18 million kilowatts, respectively.

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