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China's thermoelectric heat supply accounts for 30% of the system needs to be further improved
In recent days, as temperatures have dropped sharply, thermoelectric companies across the country have been ramping up their heating efforts to meet early winter demand. Combined heat and power (CHP) systems have gained strong support in northern heating due to their energy efficiency and environmental benefits. However, they remain a topic of concern due to factors like fluctuating coal prices and varying heating system models.
According to reports, currently, 30% of central urban heating in China comes from thermal power plants. During the "12th Five-Year Plan" period, it is expected that the heating coverage for large-scale buildings in northern regions will reach an average of 65%, with CHP accounting for 50% of district heating.
The coal-heat linkage mechanism needs to be carefully considered. A report from the China Electricity Council highlighted that heating prices in the northeast region have remained low for a long time, leading to frequent situations where heating costs exceed revenue. With the end of key contract coal agreements, thermal coal prices have risen, increasing losses for heating companies. In 2013, heating losses were estimated at 81.36 million yuan.
Fang Rui, General Manager of Guodian Bei'an Thermal Power Co., Ltd., explained that the company has faced continuous losses. For example, in 2010, the loss was 21.84 million yuan, while in 2012, it reached 45.97 million yuan. The company operates in Heilongjiang, where winter temperatures can drop to -42.4°C, and the heating season lasts about seven months. The heating price is 27.54 yuan per kJ, but the cost is 37.72 yuan per kJ, resulting in a loss of 10.18 yuan per kJ.
Wang Jun, General Manager of Inner Mongolia Huaizhuo Thermal Power Co., Ltd., also shared similar challenges. The heating price was 15.04 yuan per gigajoule, but the cost was 18.3 yuan per gigajoule, creating a negative margin. Experts suggest that heat price adjustments should consider local conditions, historical data, and cost structures to ensure fairness and sustainability.
Despite government policies, many companies still face difficulties due to regional economic constraints. It is recommended that heat prices be re-evaluated based on cost-plus principles, and financial subsidies be provided to struggling companies.
Recent developments include new regulations in Shandong Province, which require integrated heating systems involving heat sources, pipelines, and heat exchange stations. Thermoelectric companies are also exploring direct heating to households to expand their market.
Huadian Energy Harbin Power Plant, for instance, expanded its heating area by 1.2 million square meters during the 2013–2014 heating season. Urban heating networks are also evolving, with more thermoelectric companies investing in infrastructure projects. Nearly 40% of such companies now build and operate urban heating networks.
Experts recommend that qualified thermoelectric companies directly establish heating firms to reduce costs and improve efficiency. This approach is seen as a promising direction for small and medium-sized cities.
Central heating is increasingly popular among residents, with developers using it as a selling point. Some areas see an additional 500 yuan per square meter in property value due to this advantage.
Looking ahead, the Ministry of Housing, Urban and Rural Development plans to promote central heating in 15 provinces and autonomous regions, as well as in cities with significant heating areas. These efforts aim to modernize old pipe networks and enhance the efficiency of combined heat and power systems.
With the government’s focus on reducing air pollution, the elimination of small coal-fired boilers is accelerating, creating new opportunities for CHP development in northern regions. This trend highlights the growing importance of sustainable and efficient heating solutions.