China to slash coal-fired capacity across five regions

The industry is still grappling with debt.

Bloomberg reports that China is pursuing a three-year pilot program, led by five of its biggest utilities, to integrate and cut some coal-fired power capacity to help the debt-saddled industry, citing state media sources.

The pilot, which runs through 2021, will seek to consolidate coal-power assets within five northwestern regions and reduce their capacity by up to one-third, according to a Shanghai Securities News, citing sources it didn’t identify.

State-owned Assets Supervision & Administration Commission, which oversees the utilities, didn’t immediately respond to a faxed request for comment. Nobody answered calls to the media offices of the five companies -- China Huaneng Group Co., China Datang Corp., China Huadian Corp., State Power Investment Corp. and China Energy Investment Corp.

The five firms had a combined 520GW of coal-fired capacity at the end of last year, according to the Shanghai Securities News report, adding that those coal-power units had total combined liabilities of 1.1 trillion yuan ($156b) and assets worth 1.5 trillion. China’s coal plants are distributed across 30 provinces and territories, of which 15 saw losses in the coal and power business last year, according to the report.

Read the full report here.