Top thermal power generators' loss reaches 18.1 billion yuan

BEIJING - China's five biggest power companies reported sharply wider losses in their thermal power ventures in the first seven months, hit by increasing costs of coal and financing, according to the latest figures.

The companies' losses in the thermal power sector totaled 18.1 billion yuan ($2.8 billion) in the period between January and July, an increase of 166 percent from a year earlier, according to a report by the China Electricity Council (CEC).

That brought the overall losses of the companies - China Huaneng Group, China Datang Corp, China Huadian Group, China Guodian Corp and China Power Investment Corp - to 7.5 billion yuan in the first seven months, compared with a combined profit of 810 million yuan in the same period of 2010.

The companies provide about half of the country's power.

Surging coal prices and higher financing costs weakened power companies' ability to turn a profit, the CEC said.

China's benchmark power coal prices increased for 14 straight weeks before starting to decline at the beginning of July, according to the Bohai-Rim Steam-Coal Price Index.

A heavy debt burden and rising borrowing costs also dented profits at the top five power companies, whose financing expenses grew 32.5 percent year-on-year to 52.8 billion yuan in the first seven months, said the CEC.

China's central bank has increased benchmark interest rates five times since the start of 2010 to curb inflation.

Thermal power accounted for about four-fifths of the country's electricity generation in 2010, according to data from the National Development and Reform Commission, the nation's top economic planner.

To ease the financial pressure on power companies, the government raised the price of electricity used for industrial, commercial and agricultural purposes across 15 of the country's provinces and municipalities by 16.7 yuan for every 1,000 kilowatt-hours in May.

The CEC's deputy secretary-general, Ouyang Changyu, has suggested another rise in the price of electricity to help power companies overcome the crisis, the Shanghai-based China Business News reported on Monday.

Xinhua News Agency