What’s new: China’s top state-owned asset watchdog has required 40 coal plants in five western provinces to be consolidated into the leading power generator in each province, according to a Wednesday notice.
38 of the plants will be merged by June 30, with the remaining two joining within one year after the other mergers are complete.
Upon completion of the plan, each of the five power generators – China Huaneng Group Co. Ltd., China Datang Co. Ltd., China Eenergy Investment Group Co. Ltd., State Power Investment Co. Ltd. and China Huadian Co. Ltd. – will operate the vast majority of the fossil fuel plants in one of the five provinces.
What’s the background: China’s top State-owned Assets Supervision and Administration Commission issued a draft of the plan late last year, aiming to reduce losses from the five major state-owned power companies under its remit by reallocating resources.
The integration will be done mostly by transferring property rights between the companies, with minimal cash transactions. It calls to reduce coal power generation capacity in the region by at least a quarter, and cut overall losses by half.
Contact reporter Lu Yutong (yutonglu@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)
