China's national biomass power projects to profit in three years

Oct 29, 2007 01:00 AM

China's biomass power plants are expected to record profits in three year's time though currently, are only managing to strike balance in cost and economic return, said an official with the country's leading biomass-based power producer at an industrial forum.
With core technologies sourced from Denmark, the global leader in electricity powered from biomass materials, the National Bio Energy, a subsidiary under China's State Grid, was assigned by the State Council to carry out pioneer work in the field. Now, the company has 30 such projects under construction with six of them already producing electricity, according to Zhang Yanru, project manager of the company's science and technology department. The company aims to have around 2,050 MW or 2.05 GW of installed capacity of biomass power projects under construction and in operation by 2010, Zhang added.

As the raw materials of the projects are mostly corn straws, the cost of power production varies according to the quality of straws in different regions and seasons, but on average, it costs around RMB 0.5 ($ 0.067) to produce each kWh of electricity. Even with the RMB 0.25 ($ 0.033) subsidy from the government, the on-grid tariff such power plants get from the grid operators can still hardly cover the costs, she said.
As biomass power generation technologies progress and rising awareness of farmers to keep such straws in good quality, Zhang said she is positive that the biomass power plants will be able turn a profit in three years.

According to China's renewable energy development targets, biomass power will grow almost three-fold to reach 5.5 GW in 2010 from 2 GW in 2005, and 15 times as much by 2020, to 30 GW.
China produces 600 mm tons of rural straw annually, around 300 mm tons of which can be used as energy, which is equivalent to about 150 mm tons of standard coal. However, the country is still lacking an efficient system to collect the material from dispersed farmers. In the meanwhile, farmers are still lacking awareness that straws should be kept in good quality and turned in to the power plants.

The National Bio Energy Corp. started three pilot biomass power projects in Shan county of Shandong Province, Suqian in Jiangsu Province and the Wei county in Hebei Province from 2003 and signed an agreement with the Danish Ministry of Foreign Affairs to sell the emission reduction credits from the projects from 2007 to 2012.
In addition to the company, the country's power producers such as Guodian Group, are all actively constructing biomass-based power plants, mostly in the provinces of Shandong, Jilin, Jiangsu, Henan, Heilongjiang and Liaoning.

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