China to Launch a 2 Trillion Yuan New Energy Investment Plan

China is developing a new energy investment plan, perhaps involving over 2 trillion yuan, to stimulate economic growth and prepare for a round of energy shortage after economic rebound.  

A stimulus scheme has been completed by the National Energy Administration (NEA), and will be submitted to the State Council after leaders of the National Development and Reform Commission (NDRC) sign off on it.

The wind power industry looks to be the largest beneficiary of the plan. Assuming the costs for each kw to be 8000 to 10,000 yuan, the investment in wind power may be one trillion yuan. The planned 30 million kw of production capacity may not be enough to meet demand, so the NDRC is going to expand the scale of its wind power plan. 

The NDRC and NEA have decided to establish wind power bases, with production capacity of at least 10 million kw, in Hebei, Inner Mongolia, Gansu, Jiangsu and Jilin. The total installed capacity in Inner Mongolia will exceed 50 million kw, while in Hebei and Gansu it will reach 10 million kw.

Solar energy will be another beneficiary of the plan, and the total installed capacity of photovoltaic plant may reach 10 million kw. According to current costs, which stand at about 30,000 to 50,000 yuan per kw, the total investment in the solar energy area will exceed 300 billion yuan. 

Nuclear power is also included. According to NEA's mid- and long-term plans for nuclear power, by 2020 China's installed nuclear generating capacity should reach at least 70 million kw, and the percentage of nuclear power to total power generated should reach 5%. Now the construction costs for each kw of nuclear power stand at 14,000 to 15,000 yuan. The total investment in the nuclear power area will reach 750 billion yuan.

According to China's goal, the percentage of electric power generated by recyclable energy will reach at least 15% in 2020, and 30% or higher in 2040. 

China is also making use of bio fuel, and has established pilots for alcohol petroleum in nine provinces. The production of alcohol petroleum reached 1.65 million tons in 2006.

However, the government has set limits on the production of fuel alcohol using grain as the raw material, and the growth of fuel alcohol has slowed. 

The Chinese Renewable Energy Industries Association suggests China can develop technology to derive alcohol from non-grain materials such sweet sorghum and cassava, make bio diesel from oil crops, and establish raw material bases and bio liquid fuel processing companies.

According to the previous plan, annual production of fuel alcohol and bio diesel is expected to reach about 2 million tons and 0.2 million tons, respectively, in 2010, to replace 2 million tons of oil products.

Views:0