Huaneng gets nod for Dalian wind energy plant

Huaneng Power International, Inc. (the "Company") (NYSE: HNP; HKEx: 902; SSE: 600011) announced that the construction of phase I project at Dalian Wafangdian Wind Power Plant, which is 100% owned by the Company, has recently been approved by Dalian Municipal Commission of Development and Reform.

The installed capacity of phase I wind farm project at Dalian Wafangdian Wind Power Plant is 48 MW. The estimated total investment of this wind farm is approximately RMB 495 million, of which 20% is project capital and will be contributed by the Company from internal funds. The remaining investment will be funded by bank loans.

Huaneng Power, a unit of China Huaneng Group, posted a decline in third-quarter net profit as higher coal prices eroded profit margins. [ID:nTOE69I08J]

Coal prices account for about 70-80 percent of production costs and like other listed Chinese power producers, Huaneng is unable to pass on soaring coal prices to customers, because tariffs are set by the state.

Additionally, Huaneng is more exposed to rising coal prices than its smaller peers Datang Power (0991.HK: Quote) (601991.SS: Quote) and Huadian Power (1071.HK: Quote) (600027.SS: Quote), since the firm has no producing coal mines apart from some 2.8 billion tonnes of coal reserves.

The Company is one of China’s largest listed power producers with controlled generation capacity of 50,033 MW and equity-based generation capacity of 46,512MW. The power plants of the Company are located in 17 provinces, municipalities and autonomous regions in China. The Company also has a wholly-owned power company in Singapore.