Top Biz News

HK power major plans wind farms

By Wang Ying (China Daily)
Updated: 2006-04-11 06:28

Hong Kong's biggest electricity utility CLP Holdings Ltd is spending 413 million yuan (US$51 million) to build four wind farms in partnership with two of the country's top power producers.

The four projects, two in Shandong Province in the east and one each in southern Guangdong and northeastern Jilin, should start operating within a couple of years, a CLP official said.

"The earliest one is in Yantan in Shandong and will start operating in a month or two, with the latest one to start in 2007," the official told China Daily.

State-owned power companies have a controlling stake of at least 50 per cent in each of the four projects. Three of the wind power farms are majority-owned by China Huaneng Group and one is controlled by China Datang Group.

Huaneng Group and Datang Group are the Beijing-based parent companies of Hong Kong-listed Huaneng Power International Inc and Datang International Power Generation Co Ltd respectively.

CLP will take a share of 24.5 per cent to 45 per cent in each of the four farms, which involve a total investment of 1.3 billion yuan (US$164 million) and boast a combined generation capacity of 141 megawatts (MW).

The Chinese Government is pushing the use of renewable energy sources such as wind and solar to ease its heavy reliance on air-polluting coal and oil. It has ordered the country's major power companies to ensure that 5 per cent of its power generators will be fuelled by renewable sources by 2010.

The country's top energy industrial regulator, the National Development and Reform Commission (NDRC), aims to build wind power facilities of 30,000 MW by 2020. Industry experts have said the target was set too low as the government "underestimated" China's ability to harness wind.

"China has both the natural resources and land to develop wind farms. We are currently conducting feasibility studies for possible wind farm development in several locations," said Winifred Wong, a CLP manager.

The Yantai wind power project has been granted a tariff (which is paid by the electricity distributor) higher than the tariffs for coal-fired plants.

This is because, although the cost of wind power is coming down, it is still more expensive than coal.

Tariffs for the other three wind farms have not yet been determined, Wong said, without giving further details.

As a strategic move to tap wind resources globally, CLP Holdings last year forged a joint-venture called Roaring 40s with Australia-based Hydro Tasmania. China is the new venture's "primary focus," said Mark Kelleher, managing director of Roaring in an exclusive interview with China Daily in Beijing last month.

Last week, Roaring signed a co-operation agreement with the power generation unit of State-owned coal producer Shenhua Group to develop wind power in China. Their initial target is 150 MW, with the first project expected to be in Rongcheng of Shandong Province.

The tremendous market potential in China's wind power sector, boosted by surging energy demand and government incentives, has attracted an increasing number of companies.

China Yangtze Three Gorges Project Development Corp, owner of the world's biggest hydro project, last week signed an agreement with a firm in Cixi in East China's Zhejiang Province to develop an offshore wind power project with a capacity of 49.5 MW.

That is the second concrete project for China Yangtze, after the NDRC approved a 200-MW wind project in Yancheng in East China's Jiangsu Province.

(China Daily 04/11/2006 page9)