Huaneng Says China's Electricity Consumption Declined; Stock Falls 2%
The stock in Huaneng Power Intenational Inc. (NYSE: HNP) dropped nearly 2% to $18.69 per American depositary share on Wednesday afternoon, after the company said China's power consumption has declined this year.
The Beijing-based power generation company said in a statement today that in the first three quarters, its power plants in China generated 302.2 billion kWh, down 7.5% year-over-year.
In just the third quarter, power generation by plant fell to 106.8 billion kWh, down 8.3% from with the same period last year, while electricity sold by Huaneng was 103 billion kWh, down 6%.
Huaneng attributed the drop to a significant decline in electricity consumption, as well as to the rising usage of wind power and nuclear power. The company also said that some provinces in China, including Guangdong, Henan, Shandong and Zhejiang, have increasingly been using power generated by external sources.
China has cut its usage of coal as a source of smog and climate-warning greenhouses gases. Still operating as the largest producer and consumer of coal in the world, China is expected to cut coal consumption by 18% between 2018 and 2035. The country is shifting to natural gases and renewables, aiming to reduce pollution, Reuters reported in August.
As to nuclear power, China has 45 plants in operation and 15 under construction, with more planned for development, the World Nuclear Association reported last month.
Considering the trend, China is expected to surpass France as the number two producer of atomic energy and overtake the United States as number one by 2030, CNN said in September.
Founded in 1994, Huaneng operates power plants in 26 Chinese provinces, according to the company's website. The company also said its controlled installed capacity of power plants was 106,169 MW, through September.
For the first half-year, Huaneng reported revenue of $12.1 billion, up 1% year-over-year. Net income nearly doubled to $501 million from a year ago.
In a July statement, Huaneng stated: "In the first half of the year, faced with the macroeconomic environment in which the national economy underwent structural transformation and the growth rate of total electricity consumption witnessed a substantial decline, the Company continued to strengthen the level of safe and clean production, actively participated in the power industry reform, intensified efforts on investment and development of low-carbon clean energy, steadily promoted the efficiency and performance of enterprises, made progress in technological innovations, continuously enhanced the ability of fuel supply and price control, and successfully fulfilled the established goals and targets under an unfavourable business environment."
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