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Gov't to raise on-grid price of coal-fired power plants
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China will raise the price of coal-fired electricity at which power grid operators buy from generators beginning from Wednesday, in a bid ease cost pressure for generators and power shortage in certain regions, according to the country's economic regulator on Tuesday.

The on-grid price of coal-fired electricity will be raised by 0.01 yuan (US$0.145) to 0.025 yuan per kwh as of Wednesday, the National Development and Reform Commission said in a circular.

Power prices in the northwest Xinjiang Uygur Autonomous Region and Tibet will remain unchanged.

China, which had struggled with electricity shortages over the last six years, increased its power price by 4.7 percent in July. This was to aid the country's coal-fired power plants, which have suffered wide losses due to surging coal prices.

More than 80 percent of all domestic power generation companies suffered losses in the first seven months, according to statistics.

Official figures showed power coal prices rose by more than 80 yuan per tonne over the past two years. The prices had gone up by 60 yuan since the start of the year.

Prices at the coal market in Qinghuangdao, Hebei Province, a major supply center, exceeded 1,065 yuan per tonne in July, up 115percent year-on-year.

Thermal coal use this year could surge 11.5 percent year on year to about 1.6 billion tonnes, indicating the possibility of tighter supply, China Electricity Council said earlier.

According to State Grid Corporation of China, the nation's electricity consumption is expected to reach 3,591 billion kwh in 2008, up 10.5 percent or 360 billion kwh year on year.

Stimulated by the news of a price hike, shares in the country's power sector rose in Shanghai and Shenzhen trading on Tuesday.

Huadian Power International Corp gained 5.8 percent to close at4.35 yuan, while Shenzhen Energy Group Co. rose by the daily 10 percent limit to close at 8.32 yuan.

(Xinhua News Agency August 20, 2008)

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