Two generation units each with 100MW generating capacity of Shanxi Huaneng Yushe Power Plant, in which the Company owns a 60% equity interest, have been closed down.
By July 31, 2012, the Company had controlled generating capacity of 60,264 MW and equity-based generation capacity of 55,304 MW.
Although the overall economy in China is developing steadily, the national economic growth has slowed down and faces downward pressure from a number of factors such as the gloomy global economic outlook. The government is expected to maintain continuity and consistency of macroeconomic policies, further increase the intensity of anticipatory adjustments and fine-tuning measures, continue to adopt active fiscal policies and prudent monetary policies.
Electricity Market. Power consumption experienced slower growth for the first half of this year due to insufficient effective power demand nationwide affected by the slowdown of national economic growth. In the second half of 2012, the national economy is expected to improve as the various policies adopted by the Government to maintain steady growth will take effect gradually, and the growth of power consumption is expected to speed up with the coming of summer and winter peaks. In spite of various uncertainties such as operation of new generating units and increased power generation from hydropower facilities, the Company will strive to make the generating hours of its coal-fired generating units exceed local average.Coal Market. Coal price experienced continuous drop within and outside China during the first half of 2012 due to sluggish global economy, slower growth of China's economy, and the reduced energy consumption per GDP unit according to the "Twelfth Five-year Plan". Coal inventories remain at a high level throughout China and coal price is expected to drop further in the second half of this year. The Company will closely monitor market changes, make efforts to expand supply channels, adjust the purchase strategy, optimize the purchase structure and import more coal. The Company will also take advantage of the existing eased-up railway capacity to establish direct railway transportation channels in an effort to control fuel costs. Capital Market. The Chinese government will consistently implement positive fiscal policies and prudent monetary policies, make continued efforts to make these policies more target oriented and flexible, and further increase the intensity of anticipatory adjustments and fine-tuning measures. The People's Bank of China had reduced deposit reserve requirement ratio and lending interest rates both for two times, respectively, in 2012, which has significantly eased the capital pressure and financing costs of the Company. Major Tasks for the Second Half of 2012. The Company will enhance safe production management to ensure safe, consistent and economic operation of its generating units; strengthen power marketing efforts, refine working measures with a view to achieving "increased volume, consistent pricing, and improved efficiency", so as to ensure its overall leading position in terms of generating hours; enhance cost controls, strive to lower fuel costs, optimize debt structure and strive to reduce financial costs; with the focus on economic efficiency, improve construction project management and ensure sustainable, stable and sound development of the Company; promote and facilitate preparatory work of large coal-fired units in developed areas, coastal areas and areas along rivers, coal-electricity integrated projects, cost-efficient wind power projects and gas-fired power plants in the developed areas, so as to lay a sound ground for the sustainable development of the Company. For Huaneng Power International, Inc. and its subsidiaries' condensed consolidated interim balance sheet (unaudited), please visit: http://www.prnasia.com/sa/attachment/2012/07/20120731204705505098.30.2012-BS.pdf