POWER UTILITY | Staff Reporter, China

Chinese coal-fired plants' utilisation hours to drop to 4,000 hours in 2017

This is despite a slight recover in 1H17.

The average utilisation hours of coal-fired power plants declined by 5% to 4,165 hours in 2016, compared with the same period a year earlier, said Moody's analyst Ivy Poon. Accordingly, the share of coal-fired power generation in the national power generation has gradually reduced to 65% in 2016, from 71% in 2014.

"We expect the average utilisation hours will lower to 4,000 hours or less in 2017, despite capacity utilisation of coal-fired power plants slightly recovering in the first half of 2017 as hydro power generation was temporarily tempered by weather," Poon said.

Selected gencos with efficient generation fleet and diversified portfolio, such as CR Power, will likely show higher utilisation. Poon said that the expectation of a continuous decline is driven by overcapacity in the power sector and increasing competition from clean energy. In general, the designed capacity utilisation for coal-fired generation facilities is around 5,500 hours in China.

Here's more from Ivy Poon:

In view of the moderate power demand and rapid capacity expansion, the Chinese government is stepping up its measures to curb overcapacity, especially for coal-fired power plants.

According to the 13th five-year plan, the regulator aims to postpone and cancel at least 150GW of new coal-fired capacity, so that the national capacity of coal-fired power plants will be within 1,100GW by 2020. Among the 150GW, the government aims to achieve a 50GW reduction in 2017.

At the end of 2016, the national installed capacity of coal-fired power was 943GW. We expect the deceleration in capacity additions will be more apparent in 2017 and 2018, as the government directives to curb capacity were introduced in 2015 and the new capacity under construction in 2015 will be mostly completed in 2017-2018. Some of the new additions are for capacity replacement of inefficient and small-scale power plants.

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