Peter S. Goodman: Power Drain
The coal spike has ravaged much of China’s power industry, with 85 percent of the country’s plants now losing money, according to the official China Daily. A new crop of foreign investors now scours China for power plants at distressed prices.
In much of the rest of the world, including the United States, what Peak and other power producers are experiencing would have been moderated by long-term contracts that lock in a fixed price for coal over years. But in China, long-term deals are almost unknown. Entrepreneurs disdain them as a limit on their upside.