Skyrocketing coal prices and limits on heating charges are creating further problems for thermoelectricity generating enterprises this winter.

China Electricity Council, the organization of Chinese power enterprises, has submitted a report to industry authorities, suggesting once more that heat fees need to be raised to ease mounting cost pressures.

The council also suggests that financial authorities should lift the loan limit on thermoelectricity enterprises with a generation capacity under 135,000 kW and provide favorable interest subsidies to loans used in technology innovation for thermoelectricity enterprises. It also recommends 30 to 50 percent subsidies for providing heating networks in extremely cold and poor areas.

Meanwhile, an official with the newly established National Energy Bureau also disclosed that it is creating new policy on adjusting heat fees, according to a 21st Century Business Herald report this week.

Statistics provided by the China Electricity Council revealed that Chinese thermoelectric generating enterprises account for 18 percent of the country's total electricity generation capacity and 81.2 percent of steam to provide heat.

However, the entire thermoelectric industry is suffering losses while coal prices continue to surge and the bar on heat charges still remains. Although the National Development and Reform Commission has already raised the electricity price twice since June this year, the losses still cannot be met as those thermoelectricity generating enterprises' small-scale operations.

In addition, they do not have fixed coal suppliers as other power giants do. As a result, the government's curb on coal prices doesn't apply to them and they still have to pay for coal at market prices.

Heating fee standards differ from heating for civil and industrial usages. "Enterprises that use heat will withstand the heating price rise because they have to pay for the extra coal costs if they produce heat themselves," said Wang Zhenming, former secretary-general of the thermoelectricity branch of the Chinese Society for Electrical Engineering.

(China Daily September 10, 2008)