Power plants to be built in Mongolia

It is one of many projects planned by China to import electricity from neighbouring countries.

"The Mongolia plan is a phase-by-phase project. We aim to put the first plant into operation at the end of the 11th Five-Year Plan period (2006-10)," an official from the State Grid Corp of China (SGCC) told reporters yesterday on the sidelines of an energy forum in Beijing.

"It is a growing trend in China to seek cheaper and reliable energy resources from foreign countries to fuel the fast-growing economy," he said.

China last year produced 2.06 billion tons of coal equivalents of energy resources, supplying 93 per cent of domestic needs, Liu Zhaoshao, chief economist at the SGCC, told the forum recently.

But as the nation's economy expands at an annual rate of at least 8 per cent, China's domestic energy supply will be able to meet just 75 to 80 per cent of demand by 2020, he said.

China and Mongolia are now studying the feasibility of the power projects, pending final approval from the country's top economic planning body, the National Development and Reform Commission (NDRC), the first source said.

"We have selected three sites in Mongolia to build the plants," he added.

One or more of the country's power generation firms, including Huaneng or Datang, will be responsible for building the plants, while transmission lines will be constructed by the nation's biggest electricity distributor SGCC, the first source said. "It will not be a foreign company," he added.

Most of the electricity produced from the three plants will be transmitted to northern area comprising Beijing, Tianjin and Tangshan in Hebei Province.

The latter is a growing industrial base that the government has promised to support.

"Only a small proportion is going to be consumed domestically in Mongolia," the first source said.

Chinese firms are eyeing the easy availability of coal in Mongolia, which is cheaper than in China, the first source said. "As a result, electricity will be cheaper," he said.

Mongolia currently has a power generating capacity of 770 MW and coal reserves of 150 billion tons, official statistics show.

Besides Mongolia, both SGCC officials said they are also studying the possibility of importing electricity from Russia and Kazakhstan.

SGCC is currently carrying out preparatory work relating to transmitting electricity from Russia's own power plants to Northeast China, Liu Zhaoshao said.

"We are also talking with the Russians about participating in building transmission lines," he told reporters.

SGCC wants to quadruple electricity imports from Russia to 18 billion kilowatt hours by 2010, Zheng Baosen, the firm's executive vice-president, said in March.

Power projects in Kazakhstan may move slower than those in Russia and Mongolia, said the first source, without elaborating. The company is also studying similar project in other neighbouring countries, such as Kirghizstan, he added.