HUANENG Power International Inc.’s first-half net profit declined 26 percent from a year earlier to 4.02 billion yuan (US$617.4 million), as higher coal prices reduced earnings from its power-generation business.

Operating revenue of 95.12 billion yuan was up 20 percent due to a surge in domestic demand, but was outpaced by a 29 percent increase in operating expenses that reflected the higher fuel costs, Huaneng Power said Tuesday.

For the rest of the year, the Hong Kong and Shanghai-listed firm expects power generation and consumption to maintain rapid growth even as the Chinese economy’s strong rebound from the pandemic moderates.

China’s launch of a national carbon market earlier this month covers 72 thermal-power plants run by Huaneng, which said it will ramp up efforts in energy saving and carbon reduction.

“The firm will accelerate the pace of green development, increase the development and construction of new energy projects, [and] promote the optimization and upgrade of the coal-fired power structure,” it said.

A heat wave across some of China’s biggest industrial provinces over the past months has pushed domestic electricity consumption to unprecedented levels, sending thermal coal futures toward record highs this month.

Thermal coal futures have rallied more than 30 percent this year amid a supply shortage. (SD-Agencies)