for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

UPDATE 1-China Resources shuts two power plants -sources

(Adds details, comments from other power firms)

HONG KONG, Jan 31 (Reuters) - China Resources Power Holdings Co Ltd 0836.HK has shut two generating plants after vicious winter weather disrupted southern China's electricity grid, as the country grapples with its worse power crunch ever.

The firm shut its Liyujiang power plant and Liyujiang B power plant in southern Hunan province, carrying a combined installed capacity of 1,900 megawatts -- about 15 percent of the company’s total, two sources with knowledge of the matter told Reuters.

Snow has blanketed parts of central and southern China, blocking roads and railways and tangling up thermal coal shipments, magnifying energy shortages that have caused power brownouts across 17 provinces in the country and left millions stranded at rail stations ahead of the Lunar New Year.

“It’s because the power grid in Hunan was disrupted by the snowstorm,” one of the sources said on condition of anonymity.

“When they resume generation depends on when the grid resumes operation.”

Power generated from the plants had mainly been sold to neighbouring, affluent Guangdong province. China Resources maintained a total, operational, attributable installed capacity of 12,313 megawatts at the end of 2007.

China is facing its most severe power shortage as plants struggle to secure increasingly costly coal and others decide to idle capacity rather than rack up losses by selling electricity at low rates.

An official at Huaneng Power International 0902.HK600011.SSHNP.N, China's largest independent electricity provider, told Reuters the company's thermal coal stockpile had fallen to just 7 days' supply, half the normal level.

Yet there had been no disruption in power generation so far, the official said without elaborating.

For a story on weather-related disruptions, please click on [ID:nPEK43514].

WEATHER CHAOS

Chaotic weather also had little impact on China Power International 2380.HK as most of its power plants lay close to coal mines, a official with the company said.

Power prices in China edged up 2 percent in December from the year before, while coal prices -- which the government allows to fluctuate more freely -- rose 14 percent.

Analysts say net profits at major power generating companies could fall 20 percent or more in the first quarter of this year, though their output is expected to increase some 10 percent.

Chinese authorities, power sector officials and the media have focused on harsh weather and heavy snowfall as the cause of power shortages, as key power lines snap and coal trains come to a standstill, causing stockpiles of the country’s main power fuel to dwindle.

They have denied any link to low tariffs.

But traders and analysts say Beijing’s remedies -- including a two-month ban on coal exports and urging railways to give priority to cargoes of the fuel -- tackle only symptoms of a flawed pricing system rather than the root of the problem. (Editing by Edwin Chan)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up