BEIJING, Jan. 16 (Xinhua) -- China will continue to invest less in power projects in 2012 due to weak demand amid a slowing economy, an industry report said Monday.
Power project investment totaled 739.3 billion yuan last year, compared with 705.1 billion yuan in 2011, the China Electricity Council (CEC) said in a report.
In breakdown, investment in power generation projects fell 6.5 percent year-on-year to 371.2 billion yuan. Spending on power grids construction increased 6.77 percent from a year ago to 368.2 billion yuan.
Xue Jing, an analyst with the CEC, said investment in the power sector will continue to drop this year, as electricity consumption growth is estimated to slow to below 10 percent in 2012, two percentage points lower than that of last year.
China Huaneng Group, the nation's largest power company, spent 65 billion yuan in 2011 to expand facilities, 15 billion yuan less than that of a year earlier.
Investment in 2012 will be scaled back further, dampened by the persistent losses that the coal-fired power producers suffer, said Cao Peixi, general manager of the company.
China's coal-fired power producers have long been complaining that surging coal costs and artificially low electricity prices have hurt their profit margins.
Investment in the coal-fired power sector stood at 105.4 billion yuan in 2011, compared with 94 billion yuan in hydropower, 74 billion yuan in nuclear power, and 82.9 billion yuan in wind power.
The figures show a clear trend that money has been gradually shifting to the non-fossil power generation sector, said Xue Jing.
During the period of the nation's 11th Five-Year Plan (2006-2010), investment in the coal-fired power sector shrank by half.
The speedy contraction could result in an inadequate coal-fired power generation capacity and worsen the power crunch that many parts of China have suffered during the peak seasons, Xue Jing said.
Coal-fired power is the biggest source of electricity in China, with generation capacity reaching 765 million kilowatts, or 72.5 percent of the total, by the end of 2011.
But newly-added capacity stood at 58.86 million kilowatts in 2011, much smaller than the 70 million to 80 million kilowatts in the past a few years.
The newly-installed power capacity last year totaled 90.41 million kilowatts, of which one third came from wind, solar, nuclear and hydropower sources.