Eight State-owned energy giants announced on Friday a 5.8-billion-yuan (US$715 million) joint venture to develop coal gasification technology.

It is hoped the initiative will help see the green technology eventually used to produce hydrogen to generate electricity.

The investors include the country's top five power generators, the two-biggest coal producers, and an investment company.

The power producers involved in the venture are China Huaneng Group (CHNG), China Datang Group, China Huadian Group, China Guodian Group and China Power Investment Group, while the two coal companies are Shenhua Group and China Coal Group. The final investor is State Development and Investment Corp.

CHNG is the biggest stakeholder, which initiated the project and controls 51 percent in the new green technology venture, with the remaining seven companies owning 7 percent each.

Over the next 15 years, the new joint venture will see technologies developed to gasify coal to produce hydrogen for power generation, and to collect and store environment-polluting carbon dioxide, CHNG sources said.

The eight shareholders aim to build a power plant driven by gasified coal and hydrogen with a capacity of 400 megawatts.

The new pilot project will be located in Shantou, south China's Guangdong Province, or Chonqing of southwest China, where CHNG already operate power plants.

"We have installed clean coal technology facilities at the two places, so it will be easy for us to base the project there," Ju Zhanghua, vice-president of CHNG, told China Daily at the launch ceremony on Friday.

Li Xiaopeng, president of CHNG, said more than 70 percent of China's electricity producers are fuelled by coal. "The new project will have strategic importance for China to use coal in a clean and more efficient way," he said.

Ju said they would welcome new companies, including foreign firms, investing in the venture.

"Hong Kong-based CLP Power Asia is in talks with the CHNG for a stake in the new venture," the CHNG vice-president said.

The new company will depend on domestic strength for the new technology development, but also bring in some from foreign companies including carbon dioxide storage and hydrogen production, Su Wenbin, a CHNG official in charge of the clean coal project, told China Daily.

(China Daily December 24, 2005)