Rising coal prices slash profit of power producers

China’s power producers were feeling the pinch of soaring coal prices with more and more companies starting to report huge losses in the first half.

Of the 31 power producers who had released profit forecasts for the first half, 19 expected losses and six forecast profit decrease, the Wind Info, a provider of financial data, said on Sunday.
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China Shuts More Coal Power Plants; Warns on Shortage (Update1)

China, the world’s second-biggest energy consumer, shut 2.5 percent of its coal-fired power plants, prompting local governments to limit electricity consumption and issue warnings on possible blackouts.
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China Government Raises Price of Electricity

The National Development and Reform Commission (NDRC) released its plan on June 19th to raise the average sales price of electricity in China by RMB0.025/kWh starting on July 1st. This change will mainly affect industrial and commercial power consumers, while the NDRC will also adopt provisional price control measures on coal products.
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Coal Import Price via Guangxi’s Ports Soars in First Five Months

The coal imports via Guangxi Zhuang Autonomous Region’s ports totaled 6.878mt in the first five months of this year increasing by 20.9% year-on-year but with the growth rate dropping by 38.1 percentage points, announced the Ministry of Commerce on June 17th. In terms of the coal import value and price, they rose by 2.1 times and 77.4% respectively over the previous year to US$ 370M and US$ 54.5/t.

Guangxi’s ports imported coal mainly from Vietnam, which accounted for 2.5% more of the total volume than last year, namely 84% or 5.777mt. In the same period, the coal imports from Indonesia also surged from 55,000t in the first five months of 2007 to 1.049mt (Berau Shipped 58,210 mt to CLP Guangxi early June 08). Finally, Guangxi also started importing coal from Australia, which made up 52,000t of the total.
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Dongfang might be axed from Tanjung Kasam power project

Date

Jun 17, 2008

Country

Indonesia-China

Category

Energy/ResourcesCompany


Dongfang Electric Corporation of China might be ousted from the Tanjung Kasam coal-fired power project in Riau Islands province for its failure to begin the project according to the schedule, Bisnis Indonesia daily reported on Wednesday.

The Riau islands administration has recently sent a letter to Energy and Mineral Resources Minister Purnomo Yusgiantoro urging the government to review the project.

“If the investor is unable to carry out the project, it should be replaced,” Riau islands governor Ismeth Abdullah said in Batam on Tuesday. He said that the construction of the power plant should be begun as soon as possible in order to help cope with the growing power crisis in the province.

Dongfang signed the engineering, procurement and construction (EPC) contract for the Tanjung Kasam coal-fired power project in August 2006. The power plant will have two units each with a capacity of 55 megawatt. The first unit is scheduled for operation in March 31, 2009 and the second unit in June 30, 2009.

The plant is owned by local company PT. Tanjung Kasam Power (TKP). TKP is owned PT Petra Unggul Sejahtera, a subsidiary of Intraco Penta Group.

PLN, as an offtaker, will purchase power from the plant at Rp 424 per kilowatthour (KwH) on the assumptions that the dollar is valued at Rp 9,000 and coal is priced at US$25 per ton.

China to Raise Price of Electricity

Date

Jun 17, 2008

Country

China

Category

IndustrialsMarket


The National Development and Reform Commission, other government departments and the head of major electricity enterprises recently held a conference and discussed the price of electricity. The power enterprises have proposed that the Chinese Government should raise the price three times if it is to close the current power price gap of RMB0.05/kWh.

Although the Chinese Government released a notice in May requiring that small-scale coal mines resume operations as soon as possible, the price of coal has been surging since the beginning of June. For example, the price of Datong quality mix coal at Qinhuangdao Port with calorific value of 6,000kcag/kg GAR stood at RMB820/t on June 10th, marking a new record. At the same time, due to the significant increase in the price of coal on the market, some coal enterprises have broken their key electrical coal contracts signed with power enterprises at the beginning of the year and have raised the contractual coal price.

According to the statistics released by the China Electricity Council at the end of May, the high coal cost has resulted in the five large Chinese power enterprises to incur total losses of RMB2.7bn. Wang Yonggan, spokesman of the China Electricity Council, also pointed out that the power supply shortage during the peak summer period will hit 10 million kW.