Datang International Power Generation Co. (0991.HK), is to invest in a planned nuclear power plant expected to cost CNY23.44 billion.
Datang International
- the second-largest Hong Kong-listed Chinese power producer by capacity
- Datang's net profit in the six months ended June 2005 was CNY1.12 billion, up just 1% from CNY1.11 billion in the same period last year, despite revenue that rose 42% to CNY8.59 billion from CNY6.04 billion.
Ningde Nuclear Power Co
- The joint venture will have an initial registered capital of CNY200 million.
- 51% equity to be invested by Guangdong Nuclear Power Investment Co.
- 49% equity to be invested by Datang International Power Generation Co.
- located in Ningde city in Fujian province, and will have two 1,000-megawatt generating units.
- The developement proposal for the nuclear power plant has been submitted to the Chinese government for approval
Background
- All China's power producers have invested heavily in new power plants to meet the surging demand for electricity caused by rapid growth in industrial and consumer use.
- The Chinese government is promoting the use of alternative fuels to lower reliance on coal in power generation.
- Rising coal costs have eaten into the profits of power producers in China.
- Coal prices are expected to stay high in 2005, due to increasing demand for coal from new power plants, Beijing's crackdown on unsafe coal mines and the government's changes to the pricing system for contract purchases of coal.
- China aims to increase the share of nuclear power in its energy mix to 4% in 2020 from 1.6% in 2004, to diversify its sources of energy and lower air pollution. Though nuclear power plants have negligible fuel costs, concerns still linger over the high cost of building the complex facilities.Due to the higher capital spending required for nuclear power plants, the payback period of such projects tends to be six to eight years, longer than the two to three years for most coal-fired power plants, according to ABN Amro analyst Pierre Lau.
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