Special Supplement: Border province key to country's rising energy demands

China, the world's second biggest energy consumer after the United States, plans to scale up investments to build new transmission routes to import electricity from neighboring Russia to meet increasing demands in the northeastern province of Heilongjiang.

The nation wants to revitalize the industrial base in Heilongjiang with a focused spending on energy and petrochemical projects, boosting demand for electricity.

"The province needs to increase power purchases from Russia to alleviate shortfalls of the energy source," the Heilongjiang provincial government said in a statement.

China is increasing overseas purchases of energy sources such as oil, gas and power to help meet the rising demand in the world's fastest-growing major economy, which grew 11.9 percent in the second quarter. China's electricity demand may increase 13 percent this year and reach an "overall balance" between supply and demand, the China Electricity Council said in February.

Heilongjiang Province will increase spending to upgrade existing transmission lines linking with Russia and construct additional cross-border lines, the provincial government said.

The province's electricity needs are expected to reach 74 million megawatt-hours by the year 2010, according to Heilongjiang Province's 11th Five-Year Plan. The region's installed capacity will reach 16,860 megawatts by then. Russia, which enjoys abundant natural resources, produces about 1 billion megawatt-hours (MwH) of electricity a year. The neighboring country has its major power plants in the Far East and the western Siberian areas, bordering Heilongjiang.

The northeastern province should make good use of its ideal geographical position to tap into potential power supplies from Russia, industry analysts said.

China used 2.8 billion MwH of electricity in 2006, China's National Development and Reform Commission, the nation's top economic planner, said in February.

The nation will spend 250 billion yuan ($33 billion) to upgrade and construct power grids this year, the council said. Investment in 2006 was 211 billion yuan.

Heilongjiang province bought 470 million kilowatt-hours of electricity between January and November last year from Russia, representing a 2.2 percent annual increase. The corresponding power import bill rose 9.2 percent to $9.75 million.

The province imported a total of 1.28 million MwH between 2001 and 2005 from Russia, worth $24.4 million.

China and Russia, two of the world's major energy consumers and producers, plan to spend $10 billion over the next five years to build power plants along the Sino-Russian border to satisfy China's surging energy demands, the State Grid Corp of China, the nation's biggest electricity distributor, said in October last year.

The planned generators have a total capacity of 10 gigawatts, about 2 percent of China's installed capacity by the end of last year. These units will be connected with Heilongjiang province by an ultra high-voltage transmission line.

Most of the planned power plants will depend on coal, which will be supplied by the Siberian Coal Energy Co. The cross-border power project is being implemented according to a memorandum agreed in March between UES CEO Anatoly Chubais and Liu Zhenya, president of China's State Grid.

(China Daily 09/05/2007 page12)