Jan 12 - China Daily; North American ed.

China's power companies with an installed capacity of over 5 GW (gigawatts) will have to ensure 5 per cent of their electricity generators are fuelled by renewable energy sources by 2010.

"And the proportion will increase to 10 per cent by 2020," said Zhang Guobao, vice-minister of the country's top economic policy planner, the National Development and Reform Commission (NDRC).

He was speaking yesterday at a press briefing in Beijing.

Renewable energy sources include non-fossil fuels such as wind and solar power. However, hydro and nuclear sources will not be on the list of sources that the power companies must develop, Zhang said.

The vice-minister said it is international practice to set a certain quota for big power producers to develop renewable energy- driven electricity, a move to maintain the sustainability of the energy sector as well as improve efficiency.

"Although the proposed percentage (for renewable energy-fuelled electricity) might not sound like a big number, it will mean a substantial increase for China as it will boost the use of these new energies," Zhang said.

Industry analysts said China has around 15 power companies that boast an installed capacity of more than 5 GW, accounting for more than half of the country's total capacity.

By the end of last year, the total installed capacity of the nation's electricity generating plants reached 508 GW, an increase of 14.9 per cent from 2004, according to sources from the China Electricity Council, an industry association for power producers.

The figure is expected to exceed 1,000 GW within 15 years, in order to keep the fast-growing economy on track, industry analysts have said.

In a move to secure energy security by diversifying sources and clean up the environment, the Chinese Government has vowed to use renewable energy to supply 15 per cent of the nation's electricity needs by 2020, compared with the current level of 7 per cent.

At the start of this year the country put into effect its first renewable energy law, to try to reach the ambitious aim of using new energy sources.

To supplement the new law, Zhang said yesterday, as many as 12 supporting regulations have already been put in place. These include higher electricity tariffs for grid firms which buy from producers using renewable energy-fuelled power generators. Other regulations include tax reductions on equipment procurement and plant construction, as well as government subsidies for related business developers.

The country's top power companies, including Huaneng, Datang and China Power Investment, have already included renewable energy development in their long-term corporate business growth strategy.

"It will be a new business attraction, with huge market potential and lucrative returns," Zhang said.

Datang International Power Generation Co Ltd, which now relies on coal for more than 99 per cent of its electricity generation, plans to cut that percentage to 75 per cent by the year 2014, the company said.

"We are looking at a slew of wind farm projects across the nation," said Zhang Shaopeng, a Datang spokesman. By the end of June last year, Datang recorded an installed capacity of 11 GW.

The country's biggest power producer, China Huaneng Group, which had power generators with a capacity of 34 GW by the end of 2004, now only has 140 MW (megawatts) generated by wind.

The firm hopes to greatly increase that figure within the next decade, said official Li Zhaokui.