Social and Environmental Governance

Operational Safety

The Group set the goal of “Zero death, Zero accident” and strived to enhance the production safety management capability of management personnel. Focusing on strengthening the foundation and controlling at source, the Group takes a multi-pronged approach to achieve steady improvement in the level of production safety. During the year under review, the Company continued to organize training courses for environmental management officers and quality control officers, and held production safety meetings on a regular basis. It established the collective accountability mechanism for accidents and specified the responsibilities of the inspection team, which ensured inspection effectiveness and facilitated the exchange between base-level departments. At the same time, it conducted inspections on production safety and environmental specific inspections at various power plants. By adopting innovative means such as remote video surveillance, it monitored production safety of power plants and safety management at the sites of inspection, repair and technical upgrade, which helped curb major risks and potential safety hazards at an early stage.

During the year under review, the advent of new industries and modes of energy usage prompted the Group to establish various systems for construction, production, operation and maintenance management of new energy plants. The Group also formulated measures for construction, production and operation management of energy storage, hydrogen energy and integrated intelligent energy projects, and developed safety control solutions for new energy plants. A number of guiding opinions and management checklists were prepared, which included the list of safe production, operation and maintenance management systems for new energy plants, electric shock accident prevention measures, remote video surveillance inspection, fire prevention for household distributed photovoltaic power, onsite operation risk identification and control measure cards. As a result, the Group laid the foundation for further standardization and enhancement of safety management for new energy plants.

During the year under review, the Group continued to improve the conditions for operation in strict compliance with the Production Safety Law of the People’s Republic of China, the Prevention and Control of Occupational Diseases Law of the People’s Republic of China and other laws and regulations relating to safety and hygiene. It equipped employees with work equipment and labor protective gear in line with safety standards and organized various training on safety knowledge and safety skills, as well as emergency training and drills.

The “three standards” Quality, Occupational Health and Safety, and Environment (QHSE) management system established by the Group maintained stable implementation. In order to further enhance its core competitiveness and promote sustainable development, the Group has carried out annual supervision and review, which ensured compliance with international standards and played an important role in enhancing management and implementing transformational development.

In 2022, there had been no material accidents in relation to employees, facilities and environmental protection of the Group.

During the year under review, all operating power plants over which the Group has operational control complied with relevant local production safety regulations. No fines or charges were imposed on the Group due to violation of regulations.

Human Resources

The Group has placed great emphasis on the establishment of the performance appraisal, rewarding and punishment mechanism for all employees. It determines the emoluments of its directors and employees based on their respective performance, working experience, duties of the position, the remuneration system of the Company’s parent company and prevailing market conditions. In addition, the Group has implemented an incentive policy that links emoluments with overall business performance.

During the year under review, the Company adopted the new Share Incentive Scheme. The purpose of the scheme is to (i) further improve the governance structure of the Company, and establish and improve the mechanism for balancing the interests between employees and shareholders, investors and the Company; (ii) establish a benefit sharing and risk sharing mechanism among shareholders, the Company and employees to enhance the Company’s performance and promote its stable development in the long run; and (iii) effectively attract, motivate and retain core backbone employees of the Company to support the Company’s strategic transformation and long-term development. For details, please refer to the announcement of the Company dated 10 May 2022 and the section headed “Share Incentive Scheme” in the Report of the Board of Directors of this annual report.

The Group has also attached great importance to the learning and training of employees and to the communication between employees in different positions. It has improved the professional and technical capabilities and overall competence of its employees on an ongoing basis, so as to satisfy the needs of its continuously expanding businesses.

As at 31 December 2022, the Group had a total of 10,829 (2021: 10,724) full-time employees.

During the year under review, all business units over which the Group has operational control complied with the local labor laws. No fines or charges were imposed on the Group due to violation of regulations.

Stakeholder Engagement

The Group has been actively responding to the local policy requirements of the places where it operates by supporting local communities in terms of green development and environmental protection, providing reliable electricity to cope with challenges arising from extreme weather such as flooding, typhoon and cold wave, establishing sound cooperation with governments, universities and enterprises in areas including energy, technology and talents development, and making concerted efforts with local governments for pandemic prevention and control, etc.

During the year under review, the Group accomplished the mission of securing energy supply for crucial periods such as the Winter Olympic Games, the summer peak season and the 20th National Congress of the Chinese Communist Party. Fuxi Power Plant and Dabieshan Power Plant received appreciation letters from relevant ministries, local governments and power grid companies in recognition of the outstanding contribution of China Power in ensuring a stable energy supply.

Climate Change

The Group recognizes the real and present danger of climate change and assumes the mission of accelerating the transformation of the power and energy industries and the development of clean energy. In recent years, the Group pressed ahead with clean energy development, optimized the operation of various power plants, actively carried out optimization for carbon reduction and efficiency enhancement, and continuously promoted the orderly elimination of traditional coal-fired power generating units with lagging production capacity or carried out energy-saving upgrades and transformation.

We adopted and followed the procedures recommended by the Task Force on Climate-related Financial Disclosures (TCFD), so as to determine the suitable governance structure, formulate climate scenarios, identify and prioritize climate-related risks, tackled business with material risks, devise the climate action list and assess potential financial impacts. Supplemented by the adoption of the “Climate-related Risks, Opportunities and Financial Impacts” framework, we also studied the risks and opportunities posed by climate change on the Group.

The Company published its latest Sustainability Report in May 2022. The report identified and analyzed corporate climate risks in line with the “Climate-related Risks, Opportunities and Financial Impacts” framework put forward by the TCFD and highlighted the Group’s efforts in maintaining sustainable growth.

Energy Saving and Emission Reduction

The Group has always placed great emphasis on environmental protection from the perspective of sustainable corporate development, vigorously promoting energy saving and emissions reduction, conscientiously fulfilling its social responsibilities and actively responding to global climate change.

In 2022, the net coal consumption rate of the Group was 302.37g/kWh, representing a slight increase of 1.21g/kWh as compared with the previous year. As the generating units maintained high-load operation throughout the summer when energy consumption was higher, coupled with the increased use of coal for mixed combustion in an effort to control and reduce fuel costs, the net coal consumption indicators were affected to a certain extent. However, the energy-saving and heat supply transformation projects of various power generating units have been completed, which helped maintain the net coal consumption at a lower level.

In 2022, the operational ratio of desulphurization facilities for the coal-fired power generating units of the Group was 100% (2021: 100%), and the efficiency ratio of desulphurization reached 99.39% (2021: 99.35%); while the operational ratio of denitration facilities was 100% (2021: 100%) and the efficiency ratio of denitration reached 89.52% (2021: 89.13%).

During the year under review, the environmental protection indicators for coal-fired power generating units were as follows:

The environmental indicators further improved as compared with the previous year. This was mainly due to the completion of the ultra-low emission upgrade of two 660MW generating units in Pu’an Power Plant during the second half of 2021, of which the emission reduction benefits were fully reflected in 2022.

During the year under review, the Group carried out transformation at a number of power plants to enhance efficiency and save energy. For instance, Pingwei Power Plant and Fuxi Power Plant completed the air preheater transformation for three generating units, which improved their heat exchange efficiency and reduced energy consumption rate. Wuhu Power Plant completed the upgrade of sonic soot blowers at the tail flues of boilers nos. 1 and 2 and expanded the capacity of the compressed air conveying system, which reduced the use of steam, lowered the consumption rate of plant air, and cut energy consumption significantly. At the same time, Yaomeng Power Plant completed the transformation to boost the capacity and efficiency of the ash removal and air compressing system at generating units nos. 5 and 6, which trimmed down the consumption rate of plant air.

During the year under review, all the power plants over which the Group has operational control complied with the relevant local environmental protection regulations. No fines or charges were imposed on the Group due to violation of regulations.

Relationships with Customers and Suppliers

We regard customers and suppliers as very important stakeholders. We are committed to offering high-quality services to customers and recognize the importance of our business relationship which is built on trust. The Group has been maintaining good communication with them and hence established a trusting, effective and enduring cooperation relationship to understand their expectation of us more fully, so that we can join hands to achieve our sustainability goals and lay the foundation for our long-term success. During the year ended 31 December 2022, there were no significant disputes with customers and suppliers.

Relationship with customers

The Group is an independent power producer. Because of the special nature of electricity production and sales, its major customers are regional and provincial power grid companies, power users and electricity sales companies. The Group has been maintaining long-term and good customer relationships with the power grid companies in various places where its power plants are located. During the year under review, the aggregate turnover attributable to the Group’s five largest customers (local power grid companies) accounted for 61.83% of the Group’s total turnover.

The pace of market-oriented reform in the power industry continued to accelerate in 2022. Adhering to the customer-centric principle, the Group strived to provide reliable and eco-friendly energy products and services. Leveraging opportunities brought by the reform, the Group has established direct connections with power users, built market awareness with a focus on users, understood their needs, and developed and provided them with value-added services. It has also continuously enhanced service standards for users to respond to their needs effectively. The Group strengthened cooperation with major customers and offered low-carbon products and services with higher value. On the basis of securing existing key customers, it continued to expand its business clientele. At the same time, the Group has actively participated in market-oriented direct electricity transactions, established and invested in electricity sales and distribution companies and electricity trading centers, expanded the user base through electricity sales companies as the platform to reach market users, and developed integrated intelligent energy and other projects.

Relationship with suppliers

The Group’s major suppliers are coal production and sales enterprises, while its coal-fired power plants purchase the majority of coal from neighboring coal production enterprises primarily under long-term contracts. The Group has been maintaining long-term and good relationships with major suppliers in order to ensure efficient coal procurement. During the year under review, the aggregate purchases from the Group’s five largest suppliers (for production materials like coal and consumables) accounted for approximately 72.37% of the Group’s total purchases. The Group will continue to explore different procurement channels to ensure the stability of coal supply and prices.

The Group strives to establish fair, just and stable mid-to-long-term strategic relationships with suppliers to enhance competitive advantages. It strictly fulfills the contractual agreements, respects and treats each supplier equally to achieve a win-win situation. The Group has formulated a stringent and standardized supplier selection and management system, established a supplier review team and conducted strict reviews according to the integrity, business ethics, quality assurance, punctuality of supply, price reasonableness, etc. As a result, it can select more competent and reputable suppliers that are committed to sustainable development, and join hands with them to maintain a healthy and orderly market environment.

In recent years, the Group has given full play to its scale advantages of centralized procurement with the production equipment and other relevant materials procured centrally by a subsidiary, which will help to establish a stable supply chain.

The Group also incorporates concepts and requirements of social responsibilities in supplier management, and clearly stipulates that the materials must meet the relevant national environmental protection laws and standards while signing purchase contracts. The Group encourages suppliers to adopt its values and principles, thereby preventing excessive pollutant emission at source.