China Power Demand Rising But Plants Face Losses - Paper

SHANGHAI, Mar. 30 -- China's coal-fired power plants face losses due to rising coal prices, despite an expected 10 percent annual surge in power consumption as the economy picks up speed, the official China Securities Journal said on Monday.

China's electricity use will grow 10 percent a year until 2012 while demand for electricity is expected to double by 2020, the China Securities Journal quoted Wang Zhixuan, secretary general of the China Electricity Council, as saying.

But power-generating firms are likely to be pushed back into the red this year be higher coal prices, the newspaper said.

Power companies owned by China's central government have a debt-to-asset ratio of more than 80 percent, which has exposed them to severe risks in the event of a credit tightening, the paper added, citing Liu Nanchang, an official of China's state asset watchdog.