China Huaneng Group, the nation's biggest 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 power stations, new hydro and wind plants will also be built.

 

The investment, budgeted between this year 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-fuelled 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 major 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 have plagued most of the country over the past four years, and a supply-demand balance is expected within a couple of years, industry analysts said.

 

Beijing-based Huaneng Group is aiming for a total installed capacity of more than 80 GW, with 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 revenue of 19.8 billion yuan (US$2.5 billion) in the first half of this year and its profit increased 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 within 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, told China Daily.

 

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

 

Its parent firm Huaneng Group, 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 sources to meet its surging energy needs and aims to cut the firm's heavy reliance on coal, company officials said.

 

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, some of which will come online by 2010, Hu told China Daily.

 

(China Daily August 31, 2006)