China Electric Power Marriage China Coal Energy Acceleration Coal and Electricity Joint Venture

In the increasingly serious coal and electricity contradictions, coal and electricity joint ventures will undoubtedly become the "recruitment plan" to resolve this contradiction.

China Electric announced that it will jointly invest 4.98 billion yuan with China Coal Energy to establish a joint venture called "CLP Shentou Electric Power Co., Ltd." with a joint venture period of 30 years and a registered capital of 1 billion yuan. And China Coal Energy holds 80% and 20% shares, respectively, according to the proportion of its capital contribution. According to the contract, China Coal Energy will ensure the supply of coal needed by the joint venture company and give preferential treatment to the market coal prices of the power plants of the five major state-owned power generation companies in the same region. China Power also said that the two parties will further cooperate in future coal-fired joint venture projects.

It is understood that coal-fired electricity pools are based on unified planning, simultaneous construction of coal mines and power plants in the coal mining area, and the two companies jointly operate to achieve maximum comprehensive benefits. The cooperation between China Power and China Coal Energy is a typical joint case of coal and electricity. This is also the main measure that has been advocated by the government for solving the contradiction between coal and electricity for many years.

In this regard, Ren Haoning, a research adviser to China Investment, believes that due to the adverse factors such as coal price rises, the losses of power generation companies have further increased, which has also led to further intensification of the long-standing contradiction between coal and electricity. In order to ease the losses of thermal power companies, the government has vigorously promoted "coal and electricity joint ventures" and hoped to reduce the overall losses of thermal power companies through the internalization of external costs. In addition, some people in the industry also stated that coal-fired electricity pooling is more feasible between large power generation group companies and large coal companies, thus establishing a complementary, long-term mechanism for benefit-sharing and risk sharing, which can reduce coal consumption. Unnecessary friction between electricity companies, reducing the operational risks caused by price fluctuations in the coal market.