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Largest Electricity Producer to Double Capacity

China Huaneng Group, the country's largest electricity producer, plans to spend as much as 250 billion yuan (US$31.25 billion) by 2010 to more than double its generation capacity.


While the bulk of the investment will go to coal-run power stations, new hydro and wind plants will also be built.


The investment, budgeted to be spent between now and 2010, aims to add new facilities with a combined capacity of 50 GW (gigawatts), according to Li Xiaopeng, president of the Beijing-based power conglomerate whose total capacity stood at 43.2 GW at the end of last year.


"The new facilities to be installed will be large-scale coal-fired units and renewable energy-fueled plants, which highlight cost efficiency and environmental protection," Li told China Daily in Beijing on the sidelines of a company conference on Tuesday.


China, the world's fastest growing economy and the second biggest energy consumer, has prompted domestic power majors to shell out large investments to scale up their capacity portfolios.


Newly commissioned generators have greatly eased electricity shortfalls that plagued much of the country over the past four years, and a viable supply-demand balance is expected within a couple of years, industry analysts said.


Beijing-based Huaneng is aiming for a total installed capacity of more than 80 GW, and a sales revenue of 140 billion yuan (US$17.5 billion) by 2010.


The group's flagship Hong Kong-listed arm Huaneng Power International Inc posted revenues of 19.8 billion yuan (US$2.5 billion) in the first half of this year, and profits increased by 29 percent year-on-year to 2.17 billion yuan (US$271 million).


Although most of the newly constructed facilities will rely on coal as the primary fuel over the next four years, Huaneng has set an ambitious target to increase the proportion of renewable energy sources such as wind and hydro in its overall portfolio.


The company aims to use hydro and wind sources to produce 10-15 percent of its energy by 2010, Hu Shihai, a senior Huaneng official, said.


"Most of the renewable sources will come from water, with a smaller percentage generated by wind farms," Hu added.


The parent firm Huaneng, rather than its listed company, will be responsible for building the non-coal power plants, a company official said.


The renewable energy scheme is in line with government efforts to push the use of clean energy to meet its surging energy needs and its aims to cut the country's heavy reliance on coal.


According to data from the State-owned company, Huaneng plans to build as many as eight hydro-power stations along the Lancang River in southwest China's Yunnan Province.


Their total planned capacity will be 15.85 GW, a portion of which will be in operation by 2010.


(China Daily August 31, 2006)

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