Huadian commits 100b yuan in Xinjiang

The China Huadian Group has become the third major state-owned power generator to pledge more than 100 billion yuan (HK$114.39 billion) of investment in the Xinjiang autonomous region over the next decade.

The parent of listed Huadian Power International signed a pact with the region's government a week ago. It aims to have an annual power generation capacity of 15,000 megawatts, coal output capacity of 50 million tonnes and coal-to-natural gas production capacity of 6 billion cubic metres in Xinjiang by 2020.

Earlier this month, the China Huaneng Group, the mainland's largest power producer, also signed a deal to plough more than 100 billion yuan into the region. It aims to have a power generation capacity of 10,000 MW, coal output capacity of 60 million tonnes and coal-to-natural gas production capacity of 6 bcm.

Another power producer, the China Guodian Group, also agreed to invest more than 100 billion yuan in 10,000 MW power plants, a coal mining capacity of 30 million tonnes and coal-to-gas capacity of 4 bcm.

Analysts say that due to the remoteness of the region and high transport costs, the investment plans will take many years to be realised. The viability of turning coal to natural gas also has to be tested, they say.

Xinjiang is rich in oil, gas, coal and solar and wind energy. Its estimated coal reserves of 2.2 trillion tonnes account for 40 per cent of the mainland's total and its output is projected to account for a fifth of the mainland's total by 2020, up from 3.3 per cent this year, Xinhua reported.