Nov 25 2010
Huaneng Power International, China’s major electricity supplier, declared that it had obtained approval for the construction of the first phase of a wind power plant in Northern China.
The company plans to invest 495 million yuan or $74.53 million for this plant. Huaneng, which is a Beijing-based company, stated that initial construction of the Wafangdian Plant in Dalian has been approved by the Dalian Municipal Development and Reform Commission, but the specific date as to when the construction work would commence has not been revealed.
The company would provide 20% of the finance from its capital, and the rest would be procured from bank loans. Installed capacity of the plant’s first phase would be 48 MW. Huaneng Power which is an affiliate of China Huaneng Group revealed that there was a decline in net profit during its third quarter of the year, mainly due to higher coal prices which reduced the profit margins. Coal prices cover more than 70-80% of the total production expenses and very similar to other Chinese power producers, Huaneng cannot transfer the increase in prices to their customers mainly because of the state tariff rates.
One another disadvantage faced by Huaneng is that the company does not own any coal producing mines, and has only 2.8 billion tons of coal reserves, unlike other firms such as Huadian Power and Datang Power.
The company’s shares listed in Shanghai were fixed at 0605 GMT. It has been reduced by 25%, underperforming in the Shanghai market with a 12% drop.