First US power producer to enter China now eyes exit

AES Corp (NYSE: AES), the first U.S. power producer to enter China about two decades ago, is looking to sell all or some of its assets there, said three sources familiar with the process, hobbled by not being able to pass on higher coal costs in a state-regulated industry.

The sources said Arlington, Virginia-based AES, which has a market value of around $10.5bn, has recently hired an investment bank to kick off the process. A sale or sales could potentially be worth $300-$400m, reports Reuters.

China's sovereign wealth fund China Investment Corp CIC.UL acquired a 15 per cent stake in AES for $1.6bn in 2009.

The likely exit, or scaling down, underscores the challenging operating environment in China's power industry, where coal-fired power producers have little control over electricity prices, which are set by the state.

Chinese independent power producers such as Huaneng Power International Inc (0902.HK) (600011.SS) (HNP.N) and Datang International Power Generation Co Ltd (0991.HK) (601991.SS), which generate power but don't own grid assets, have seen a sharp dip in their business in recent years as coal prices have surged.

They are likely to turn a profit this year, helped by long-delayed power tariff increases, but the profit outlook remains murky in the absence of a tariff regime that allows power producers to pass on fuel costs to consumers.

For more coal fired power news

Follow Power Engineering International on Twitter




Editor's Picks

EU flag

Luxembourg government working on Hinkley Point C legal objection

As promised earlier this year, the Luxembourg government intends to file a lawsuit against the European Commission decisio...
David Cameron and Werner Faymann

Nuclear chief says Austrian legal action ‘damaging to efforts to address climate change’

The Austrian government has finally filed its legal challenge against the deal that facilitates subsidies for a nuclear po...
 Schleswig-Holstein Climate Minister Robert Habeck

Federal states applying pressure on Merkel government over subsidies to nuclear

States with green party representation in Germany are calling on the German government to take action against the prospect...
Mike Baston of Euracoal

Future global power generation mix – the coal-fired power perspective

In our inaugural PEi Google Hangout, Mike Bostan, Policy Officer at Euracoal tells Power Engineering International's Diarm...
Faymann

Austrian PM confirms lawsuit against Hinkley decision ready in weeks

Austrian Chancellor Werner Faymann has confirmed that his country will be registering its lawsuit against the European Com...
Latest Articles
Ansaldo Energia

Ansaldo Energia set to capitalise thanks to GE-Alstom concession

Italian power engineering firm Ansaldo Energia is emerging as a potential beneficiary of EU competition law after GE, according to insiders, offered to sell gas-turbine assets to it in an attempt to win approval for its pl...
Samsung

Samsung wins $1.8bn contract at Qatari gas-fired power plant

Samsung C&T has announced its participation in the Facility D Independent Water and Power Project (IWPP) in Qatar.

Kiev

Ukrainian coal-fired power plant struck by shelling

Donbasenergo's Slovyanska power station was hit by shelling on Monday knocking it out of action.


Editorial Guides

Lubrication Challenges for the Biogas Industry in 2015

The biogas industry is growing in importance as the world continues to look for alternative, clean energy sources. However...

Maximising Power Plant Efficiency

The need for power plants to operate at maximum efficiency and flexibility while cutting emissions is greater than ever be...

How to cut your OPEX

How to cut your OPEX In a constantly evolving electricity market, factors such as over capacity and low coal costs can pu...

Buyers Guide Companies

ComRent International LLC

Offers rentals, sales, and services of load banks for testing generators...

Advanced Energy

Advanced Energy is a global leader in innovative power and control techn...

Fluid Energy Controls Inc

ACOEM AB

ACOEM is a supplier of Fixturlaser's innovative and user-friendly equipm...

CCI Thermal Technologies Inc

A leader in the development and manufacturing of industrial heating and ...

Buyers Guide Products

Bore Measurement

Typical applications are full bore measure...

Fixturlaser NXA Pro

This laser alignment system features many ...

Exhaust Systems

Leader in Exhaust Bypass, Simple Cycle, Ex...

RETROFIT

Braden's retrofit strengths are divided in...

Air Filtration

Braden filtration offers a wide range of f...

Power Engineering International

Whitepapers

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New challenges and opportunities are continually appearing thanks to dramatic developments in technology...

The bottom line: engine oil impact on engine reliability

A reliable and well-maintained gas-powered engine performs consistently and continuously, which can lead to a healthier bottom line for plant operators. There is a raised awareness around the need ...

Understanding Moisture Dynamics in Power Transformers

In this webinar recording "Moisture Dynamics in Power Transformers" (held originally in September 23, 2014) you will have a chance to learn about the phenomena and its importance to your ...

How to lower your total cost of ownership on DC Control Power

In this whitepaper, we look at implementing battery management solutions and how smart battery management effectively lowers the total cost of DC Control power systems and the risk of their failure...

Latest Digital Edition

  Power
  Engineering
  International
Look Inside >
Cover
Current Issue

Article Archives for Power Engineering International Magazine