Chairman of the Board of China Guodian Corporation: It Needs to Control the Size as China’s Power Generation Overcapacity Will be Over 20%

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With the economic development entering a new normal, the power industry faces new difficulties and challenges in operating environment. Qiao Baoping, Chairman of the Board of China Guodian Corporation, expects the production overcapacity of power generation enterprises will be more than 20%. So in addition to the enterprises’ own constraints, the administrative departments should have overall requirements on control scale.

The above was stated by Qiao Baoping at 2016 China Development Forum held on March19 inBeijing. He thinks that pressure on the power industry will be quite huge this year. In 2015, the number ofChina’s thermal power utilization hours dropped to 4329, the lowest level for 69 years, while the consumption of electricity increased by only 0.5%. It is estimated that the number of the thermal power utilization hours will continue to decline by300 in2016.

According to Qiao Baoping, even so, "the annual newly installed capacity will be more than 100 million kilowatts. Therefore, the gap between the scale expansion and actual needs is still growing".

In addition, in January 2016 the price of coal-fired electricity was down 3 cents per kilowatt-hour, imposing significant effect on electricity generation enterprises. For China Guodian Corporation alone, this year the profit will reduce more than RMB10 billion, said Qiao Baoping.

He suggested firstly controlling the scale of development strictly, allowing no disorderly growth and blind competition.

Secondly optimizing the power structure. "Whenever seeing so serious fog and haze, we are aware of our huge social responsibilities because electricity generation enterprises are main emitters. We think it needs to expand the proportion of our country’s new energies, and accelerate developing wind power, hydropower and other renewable energy sources".

Thirdly strengthening our competitiveness in the world market. "We have some very advanced technologies such as the 300,000 installed wind power inSouth Africa. Using our own production facilities has brought about better efficiency. We have also installed the wind power of our own in Canada, so we shall speed up greatly the pace competing in the world market".

Fourthly accelerating the innovation of new energy technologies, and fifthly taking an overall consideration. In addition to the own constraints of the power industry, all administrative departments like State-owned Assets Supervision and Administration Commission of the State Council should have overall requirements on control scale.