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  PlanetSave 13 Jan 06
China sets renewable energy quota for power companies
Written by Cassie Biggs

BEIJING (AP): China has told power companies that 5 percent of their electricity will have to come from renewable energy sources by 2010, as the country tries to diversify away from fossil fuels to power its fast-growing economy, a news report said Friday.

Zhang Guobao, vice-minister of China's top economic planning body, said the quota would increase to 10 percent by 2020, according to the China Daily newspaper. Wind and solar power are included but nuclear and hydropower are not, Zhang said.

"Although the proposed percentage might not sound like a big number, it will mean a substantial increase for China and it will boost the use of these new energies,'' Zhang said.

China, the world's second-biggest producer of greenhouse gases after the United States, has promoted cleaner and renewable energy in hopes of reducing air pollution from its surging fossil fuel use and the potential security risks of growing dependence on imported oil.

In recent years, China has become more reliant on imported fuel to feed the surging demand for energy in its modernizing cities. But many cities are facing chronic energy shortages with scheduled blackouts and industries forced to shift production to weekends when demand is less.

Total installed capacity of all of China's power plants last year reached 508 gigawatts, up nearly 15 percent from the previous year, but still falls short of the country's needs. Demand is expected to exceed 1,000 gigawatts within 15 years, according to the report.

The quota applies to large power companies with an installed capacity of more than 5 gigawatts. Analysts estimate that China has 15 such companies generating about half of the country's power supply.

China's larger power companies currently rely mainly on coal and other fossil fuels with renewable energy making up a negligible percentage of their output.

Power grids that use energy generated from wind or solar power would be able to charge higher electricity tariffs, Zhang said, adding it was just one of several financial incentives for companies to explore alternative energy sources.

Datang International Power Generation Co. Ltd., one of China's top power companies, said it plans to cut its coal-fired output from the current 99 percent to 75 percent by 2014, according to the report. Datang, and Huaneng Group--China's biggest power company--also have both invested in wind turbines.

In another development, China and Germany agreed to invest US$121 million (euro100 million) in renewable energy projects, including a wind power plant in the eastern city of Qingdao, a spokeswoman for the German Embassy said. Coastal Qingdao will host the water sports for the 2008 Beijing Olympics and the project aims to have the five wind turbines up and generating power by then, the China Daily reported.
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