UPDATE 1-China's Huaneng safeguards coal supply, eyes CO2

(Adds details, emissions scheme)

BEIJING, April 15 (Reuters) - The parent of Huaneng Power International Inc (0902.HK: Quote, Profile, Research, Stock Buzz) plans to produce 45 million tonnes of coal a year by 2010 as China's largest electricity producer tries to mitigate the impact of sky-high prices for the hydrocarbon.

Huaneng Group, which consumed 137 million tonnes of coal last year, with much of that bought in the market, will need 200 million tonnes of coal by 2010, Assistant President Hu Shihai said on Tuesday.

But Hu said the company hoped to supply 45 million tonnes, or around 20 percent of that total, by itself.

To help safeguard cheaper supply for its electricity generators, the firm plans to invest "quite a large amount" to buy mining assets in Inner Mongolia, Shanxi and western regions, the executive said without elaborating.

Robust demand in China, the world's largest electricity consumer after the United States, has propped up the bottom line for Huaneng (600011.SS: Quote, Profile, Research, Stock Buzz) (HNP.N: Quote, Profile, Research, Stock Buzz) and rivals Datang International Power (0991.HK: Quote, Profile, Research, Stock Buzz) (601991.SS: Quote, Profile, Research, Stock Buzz), Huadian Power International (1071.HK: Quote, Profile, Research, Stock Buzz) (600027.SS: Quote, Profile, Research, Stock Buzz) and China Resources Power (0836.HK: Quote, Profile, Research, Stock Buzz).

But the outlook for the power producers is overshadowed by record high coal prices and little chance of an inflation-fearing government raising power tariffs in the near future, leading many to start looking to ensure some of its own supply.

Apart from its quest for coal, state-run Huaneng is heeding Beijing's call to better protect the environment, the executive said, noting the firm plans to complete China's first project to capture carbon dioxide emissions -- a main source of pollution -- at coal-fired power plants, to demonstrate the economic and technical viability of the technology.

Hu told an industry conference that the project will be finished ahead of the Beijing Olympics and would be able to capture 3,000 tonnes of carbon dioxide annually.