China Coal-Fired Power Firms May Lose $10bn in 2008

China's coal-fired power plants are expected to lose over CNY70bn ($10.17bn) this year, a China Electricity Council official said on Friday, as state-set power tariff hikes fail to keep up with coal costs.

Power consumption growth is also expected to fall seven percentage points, Xue Jing, an official at the council's statistics department, told a conference in Beijing.

China in July raised retail power tariffs for non-residential users by 4.7% while hiking on-grid power rates for thermal power firms by an average of about 5%.

The first rise in two years has failed to curb power plants' operating losses as coal costs surged in the double-digits annually during the same period.

In August, it raised on-grid power rates again by a similar percentage.

But power firms including Huaneng Power Huadian Power and GD Power Development Co Ltd said they were still posting losses.

Mounting losses have curbed power firms' operating levels, which, along with coal shortages, have led to China's worst summer power brownouts in four years.

Power generation was further undermined in recent months by spreading global economic woes, with national power output in November set to show the biggest year-on-year decline on record.

By Jim Bai, Reuters