The merger of the coal-to-power energy Shenhua Group and one of China’s big five state-owned power generators, China Guodian Group has received Beijing’s green light, which will create the world’s largest power utility firm. “China Guodian Group and Shenhua Group will be merged and restructured into the State Energy Investment Group,” the State-owned Assets Supervision and Administration Commission (SASAC), the manager of state firms under the direct supervision of the central government, said in a statement. Shenhua,

Shenhua, China’s largest coal miner with 420 million tons of annual capacity, will absorb Guodian’s 65 million ton capacity. It will also amalgamate Guodian’s 143 gigawatt (GW) of power generation capacity with Shenhua’s 83 GW, creating a 226 GW behemoth surpassing current leader China Huaneng Group’s 165.5 GW. Guodian, already the world’s largest wind farm operator with 26 GW of capacity, will widen the gap with its domestic rivals further, after combining with Shenhua’s 7.4 GW wind capacity.

“State Energy Investment will continue to consolidate other players both up and downstream of the supply chain,” said ICBC International Analyst Zhao Dongchen. The merger is part of Beijing’s ongoing effort to enhance competitiveness of the central government’s enterprises through mergers and acquisitions (M&As), with a long term target to cut their number to 40 from the current 98. Guodian’s net assets amount to CNY146 billion compared with Shenhua’s CNY516 billion, the South China Morning Post reports. The merged group’s assets exceed CNY1.8 trillion and it boasts power generation of nearly 226 GW — making it the world’s largest power group.