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May 11, 2017

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Home » Business » Energy

Reform set to benefit electricity producers

China’s energy reform is expected to benefit its thermal and solar power producers over the next two years, UBS predicted yesterday.

Thermal power plants may reap a profit rally from the second quarter of 2017 through next year, bolstered by “better-than-expected” demand growth amid limited supply, said Liu Shuai, analyst for energy and public utilities at UBS.

China’s domestic power consumption rose 6 percent monthly since last July, reversing from under 2 percent since April 2015, according to the National Bureau of Statistics.

China will cut 50 gigawatts from the installed thermal power capacity this year to ensure a more eco-friendly energy structure, Premier Li Keqiang said earlier.

UBS also predicted China would raise electricity prices next year and that’s “another factor to benefit thermal power plants.”

The solar power sector is likely to be another beneficiary, as its generation cost had been below 0.60 yuan per kilowatt-hour by the end of last year, down from 5 yuan per kWh five years ago and close to the thermal power cost of 0.30 yuan per kWh, Liu said.


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