30-08-04

China needs to invest $ 120 bn in the next five years to generate enough electricity to meet its huge demand for power and reduce crippling power shortages.

Wang Yonggan, general secretary of the China Electricity Council which groups the country's electricity companies, said China must increase power production by 215 mm kW to 245 mm kW. That would require an investment of one trillion yuan ($ 120 bn), Wang said.

He suggested the government would place more emphasis on using environmentally-friendly energy, moving away from its current reliance on polluting coal-fired power plants.

"In the next five years, China will make a big investment in hydroelectric power and will place importance in speeding up the construction of nuclear power and natural gas in its electricity development structure," Wang said. Further investments would be needed, including 750 bn yuan to improve power grids, Wang added. China would therefore need to look for new financing channels, Wang said, suggesting that there would be adjustments in the prices of electricity.

China still relies on coal for most of its power and will continue to do so in the near future. Its thermal power plants, most of which are coal-fired, are estimated to generate 477 mm to 503 mm kW of electricity by 2010, which would require 1.3 bn tons of coal, Wang said. To meet demand, China would build 13 new major coal bases in coming years, which were estimated to be able to produce 2.3 to 2.5 bn tons of coal by 2010, Wang said.

Transportation facilities, including railways, would be built in the coal bases, including Datong, Shenfu and Taiyuan cities in China's coal capital of Shanxi province. The amount of coal that can be transported from the bases would reach around 1.8 bn tpy, Wang said.

Currently, a massive transport bottleneck on the country's railway network is to blame for lengthy delivery delays of the commodity to the nation's power generators.

China is facing a serious electricity crisis as its booming economy has createdmassive demand for energy that could result in a 30,000 MW power shortage over the summer months -- the worse shortage since the 1980s.