Shanghai plans to spend 800 million yuan (103 million U.S. dollars) to build a wind power plant in a coastal landfill area.

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The plant, in an exposed landfill area near the East China Sea, will be built by the Shanghai Environment Group and Shanghai Huadian Electric Power Development Co. Ltd.

The two sides signed an agreement on Tuesday to set up a joint venture, called Shanghai Huagang Wind Power Generation Co., to operate the project. The new company will invest 200 million yuan in the first phase of the project, which is expected to be completed by the end of 2007.

The company plans to install 15 1.5-megawatt wind power generators and have a generation capacity of 46.96 million kilowatt-hour a year. It will save 12,000 tons of coal compared with a thermal power station of the same-size.

Landfill operations for the plant, which will cover an area of 40,000 square meters, have now been completed.

The plant is part of Shanghai's efforts to catch up with other regions in exploiting wind power.

Currently, three small wind farms generate a mere 25 MW of power for Shanghai's vast energy needs.

"By 2010 the total wind power will be around 300 MW, two percent of the city's total installed power capacity," said Li Xin, an official with the Shanghai Development and Reform Commission.

China had 62 wind farms in operation with an energy capacity of 1,266 MW at the end of 2005. The government has set a target of 5,000 MW for 2010 and 30,000 MW for 2020, by which time wind power will account for three percent of the country's total power needs.

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