A unit of Shenhua Group, the country's biggest coal producer, will build the 200 megawatt plant at a cost of 1.7 billion yuan (210 million dollars) in the eastern coastal province of Jiangsu, the Shanghai Daily reported.

The plant in Dongtai city, north of Shanghai, will produce enough electricity for 400,000 homes, it said.

Shenhua subsidiary Guohua Energy Investment Corp said it planned to expand the capacity at its Dongtai plant to 1,000 megawatts over the next 10 to 15 years, the paper reported.

China, which currently relies on coal for around 70 percent of its power needs, is trying to diversify its energy mix.

China is intending to increase its wind power capacity from the current level of 1,260 megawatts to 5,000 megawatts by 2010, according to the China Electricity Council.

But the 760 megawatts of installed wind power from 43 wind farms at the end of 2004 was less than one percent of the total national electricity production, previous government figures showed.

According to previously announced Chinese studies, the nation has the potential to tap over one million megawatts of wind power resources, of which 250,000 megawatts are land based and the rest offshore.