The China Electricity Council (CEC) has said coal fired power plants operated by the country’s five major power generation groups - China Huaneng, China Datang, China Guodian, China Huadian and China Power Investment - lost close to $2bn in the first five months of 2011.
A senior official from one of the groups said higher electricity prices had not helped power plants because coal prices increased substantially after the government raised power prices.
He said the coal plants were kept operating to ensure continuing electricity supply during the summer, and that operators were working to increase production efficiency to minimize coal costs.
The official added that hydropower generation would pick up and help ease the power shortage following recent heavy rainfall in South China.
He said that to resolve the power shortage problem, which happens nearly every year, the government should stop setting the price of electricity and let it be determined by the market.