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Source: www.asiaecon.org |

CHINA UNVEILS A $85 BILLION PLAN TO BE SPENT ON POWER


China unveiled a plan to invest 580 billion yuan ($85 billion) on the country's power sector this year,  particularly in nuclear reactors, grid construction and wind farms. The investment aims to take advantage of the current plunging demand for energy  in order to improve its power plants and boost energy production, while ensuring the country's goal to pursue cheaper and environmentally friendlier energy resources.




China unveiled a plan to invest 580 billion yuan ($85 billion) on the country’s power sector this year,  particularly in nuclear reactors, grid construction and wind farms. The investment aims to take advantage of the current plunging demand for energy  in order to improve its power plants and boost energy production, while ensuring the country’s goal to pursue cheaper and environmentally friendlier energy resources.

China’s power enterprises are set to face tough times during the first two quarters of the year, as the global financial crisis has forced many manufacturers to cut back on output and electricity consumption. Last year power consumption grew a meager 5.23%, the slowest in eight years and a 9.57% decrease from the 14.8% growth experienced in 2007.

Zhang Guobao, head of China’s National Energy Administration, pointed out that “China should take fully advantage of declining power demand to step up to shut down small thermal power plants, coal mines and refineries with high energy-consumption and backward technology, and accelerate construction of large energy infrastructure and major energy projects.”

China is therefore heavily investing on nuclear power as it provides a cleaner alternative to coal, which currently covers about 80% of the country’s total energy demand. China is in crucial need of cleaner energy, as it needs to substantially decrease its soaring rates of carbon emissions. Moreover, nuclear power has proven to be a cheaper alternative to oil, especially in light of last year’s spikes in crude oil prices.

Additionally, “China is in dire need of more nuclear power plants, especially in its southern provinces that are more economically developed but have a more acute need for local energy reserves,” as stated by Zhang Guobao.

Currently, the country has eleven nuclear reactors with a combined capacity of 9.07 GW, which only amounts to 1.3% of the total generating capacity. The government has announced its goal to increase nuclear capacity to 70 GW,  5% of the total power production by 2020.

This year, China plans to start the construction of  three nuclear plants in  the provinces of Shandong, Guangdong and Zheijiang.  The new plants are expected to have a combined capacity of 8.4GW.
The government plans to build eight additional nuclear power plants in the next three years, with 16 reactors and an expected combined capacity surpassing 10GW.

Moreover, the new energy investment plan will also include the construction of 10-million-kilowatt wind farms during the next 10 years, in locations such as Gansi, Inner Mongolia, Hebie and Jiangsu.

Meanwhile, China has also placed considerable effort on improving energy distribution. In the past few years, China has struggled to balance  energy production and distribution, with power distribution usually receiving less investments than power generation.

In 2008,  however, the government showed more focus on electricity distribution efforts than on  power generation. Of the total 576.3 billion spent on energy infrastructure on 2008, 287.9 billion yuan were directed towards power generation projects, a 10.8% from the amount spent for the same area in 2007. Electricity distribution enjoyed a 17.7% increase in spending from the previous year, with 288.5 billion yuan being invested in the area in 2008.

Energy distribution is expected to continue growing, as the country’s two distribution companies are expected to heavily invest on grid constructions and upgrades aimed at increasing power availability in both urban and rural areas, as  part of the government’s massive stimulus plan released last year.

 Energy consumption is expected to increase in the latter half of the year as the export dependent areas recover and consequently,  push up the demand for power. However, the Chinese government only expects an overall 5% increase in energy consumption this year. Nevertheless, the country is expected to enjoy a boost in energy distribution, consumption and production during the next following years as the new investment plans come into action.



Source: www.AsiaEcon.org
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Source: www.asiaecon.org |


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