30-07-08 China's four power giants may have lost up to Yuan 7 bn ($ 1.02 bn) in the first half of this year due to soaring coal prices.
China Guodian Corporation (CGD) and China Huadian Corporation (CHD) recorded losses of Yuan 1.4 bn and Yuan 2.65 bn, respectively, in the first six months, the report said, quoting unpublished figures.

China Datang Corporation lost Yuan 1.479 bn between January and May. Experts estimated Datang's loss for the January-June period would amount to Yuan 2 bn.
No figures were available for the China Power Investment Corporation (CPI), but the report quoted industrial sources as saying that the company may have lost Yuan 1 bn.

A China Galaxy Securities analyst said coal-fired power plants, which supply 78 % of the country's electricity, were pinched by soaring coal prices, government control of electricity prices, as well as the rising financial costs resulting from expanding investment and the country's tight monetary policy.
On July 1, the government raised electricity prices by Yuan 0.025 per kWh for industries. But electricity price for homes remain unchanged.

The price increase, however, could only cover 15 % of the losses in coal-fired power plants, said a Citic Securities analyst. To meet listing requirements, these power giants did not slow their expansion pace despite heavy losses.
Guodian put into production a capacity totalling 1.707 mm kW in the first half. Huadian generated 25.11 % more electricity than the same period last year (no statistics of its electricity output was available). Datang and CPI produced about 165.794 bn kWh and 99 bn kWh between January and June, 17.7 % and 15 % higher year on year, respectively.

An industry insider said Huaneng was the only one of the country's five power giants that didn't run at a loss in the first half. A Huaneng executive confirmed it did garner marginal profit over the six months.
Some industry observers attributed the gain partly to the unbalanced assets distribution of the 2002 reform of thecountry's power industry. At the time, Huaneng was given less financially burdensome obsolete power plants than the other four. The reform aimed to promote competition by breaking up the State Power Corporation, which has a virtual monopoly in the sector, into five power generation groups and two grid companies.