China Plans To Merge Thermal Power Assets Of State Companies

- Dec 04, 2019-

China will merge thermal power assets of State power companies as part of its ongoing efforts to deepen supply-side reforms and slash overcapacity in the sector, according to a document put out by the State-owned Assets Supervision and Administration Commission.

The move aims to boost healthy development of the sector, against the backdrop of rapidly increasing coal prices, overcapacity, and intense competition, all of which have been major obstacles for coal-fired power companies since 2016, the document said.

The first round has already started, according to Shanghai Securities News, with plans to merge the coal-fired power assets of five top State-owned power companies in the five northwestern coal-rich provinces/autonomous regions, to cut 25 percent to one third of overcapacity, raise equipment utilization, lower losses by more than half, and significantly reduce liability-asset ratios by the end of 2021.