World Bank pushes renewables in China

World Bank pushes renewables in China

by Sabian Wilde, EnergyReview

23rd February 2006

CHINA has secured a loan from the World Bank worth more than $A117 million for the express purpose of fast-tracking its development of renewable energy projects, specifically targeting wind, solar and small hydro projects.

The push for renewables in China has been deemed necessary to help the country meet its quickly expanding energy requirements.

Around $A90 million of the loan will be directed towards the development of the 100 megawatt Huitengxile Wind Farm in the Inner Mongolia Autonomous Region, which is currently home to approximately 70MW of wind generation capacity.

The Huitengxile Wind Farm will be developed and operated by the Inner Mongolia North Long Yuan Wind Power Company, with a purchasing agreement in place with the World Bank's Prototype Carbon Fund.

The World Bank estimates the wind power field is capable of sustaining up to 1000MW of wind power gerenration.

Based on the internal wind driven power generation and operational performance of the existing Huitengxile wind power field, the 100MW project will use 67 wind driven 1.5MW capacity turbines, using a Dangemaikang generator and a low-temperature wind turbine manufactured by GE Wind Energy Company.

Under Chinese law, 70% of the value of a wind turbine must be produced domestically.

The PCF was established by the World Bank in 2000 as a public/private partnership between 17 companies and six governments, with the express purpose of developing the market for project-based greenhouse gas emission reductions under the Kyoto Protocol's flexible mechanisms, promoting sustainable development and offering a "learning-by-doing" opportunity to its stakeholders.

The World Bank's lead energy specialist for China, Noureddine Berrah, said the rapid growth of China's economy made it necessary for programs like the PCF to help minimise the impact on the environment.

"China's energy demands and its need to decrease air pollution make large-scale renewable energy development an important goal," she said.

"The idea behind the program is to increase the commercial, large-scale use of renewable energy sources like wind, small hydropower and solar energy so that they contribute to meeting the fast-growing electricity demand from homes, farms and businesses."

The rest of the World Bank loan to China has been earmarked for a range of small hydro projects no bigger than 10MW in the Zhejiang Province.

China's renewable energy scale-up program aims to develop the commercial market for energy suppliers to provide large-scale renewable energy to the electricity grid in an efficient and cost-effective way.

The majority of China's renewable energy sources - wind power, solar power and biomass - have historically been produced in small-scale pilot programs, outside the main electricity supply.

The World Bank loan has been facilitated through the International Bank for Reconstruction and Development (IBRD) loan as a variable spread loan, maturing in 20 years with a five-year grace period.