China has urged the country’s five biggest utilities to speed up the transfer of 40 coal-fired power plants in the northwest of the country, according to a document seen by Reuters and confirmed by a person with direct knowledge of the matter.
The move follows Beijing’s pledge, reported by Reuters last year, to reduce debt and to shed coal-fired power capacity by as much as a third in two years at the five state-owned power generators.
The document, dated May 20 and issued by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), urged China Huaneng Group, China Datang Corp, China Huadian Corp, State Power Investment Corp (SPIC) and China Energy Group to complete the transfers before the end of June.
The plants account for 32.7 gigawatts (GW) of capacity. The plan envisages that in each province there will be only one state-owned power company to avoid competition, and those companies will have the right to close or dispose of the plants that are transferred to them.
Fourteen power plants totalling 12.62 GW currently owned by Datang, Huadian, SPIC and China Energy in Gansu province will be transferred to Huaneng, according to the SASAC plan.
Eight coal-fired power plants with combined capacity of 9.08 GW in Shaanxi owned by Huaneng, Huadian and SPIC will be transferred to Datang.
Thirteen utilities totalling 6.29 GW in Xinjiang will be transferred to Huadian, while two plants in Qinghai and three plants in Ningxia, with combined capacity of 1.36 GW and 3.34 GW, respectively, will be transferred to SPIC and China Energy.
The document did not mention any cash payments in relation to the transfers, which, according to SASAC’s initial plan, should be mainly gratuitous.
More transfers are expected, with the 40 plants only the first phase of an ambitious restructuring plan, according to the document.
SASAC did not immediately respond to Reuters’ request seeking for comment.