Identifier
Created
Classification
Origin
09GUANGZHOU157
2009-03-06 10:02:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Guangzhou
Cable title:
Fujian: Alternative Energy Development Attractive Amid
how-toVZCZCXRO1832 RR RUEHCN RUEHGH DE RUEHGZ #0157/01 0651002 ZNR UUUUU ZZH R 061002Z MAR 09 FM AMCONSUL GUANGZHOU TO RUEHC/SECSTATE WASHDC 0326 INFO RUEHGZ/CHINA POSTS COLLECTIVE 0120 RUEHBJ/AMEMBASSY BEIJING 0229 RUEHGH/AMCONSUL SHANGHAI 0069 RUEHCN/AMCONSUL CHENGDU 0069 RUEHSH/AMCONSUL SHENYANG 0069 RUEHHK/AMCONSUL HONG KONG 0095 RUCPDOC/USDOC WASHDC 0007 RHMFISS/DEPT OF ENERGY WASHINGTON DC 0006 RUEATRS/DEPT OF TREASURY WASHINGTON DC 0059 RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0066 RUEAIIA/CIA WASHDC 0111 RUEKJCS/DIA WASHDC 0111 RHHMUNA/HQ USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 03 GUANGZHOU 000157
SENSITIVE
SIPDIS
EMB BEIJING FOR DOE
USDOE FOR OFFICE OF THE SECRETARY
USDOE FOR INTERNATIONAL AFFAIRS
USDOE FOR FOSSIL POLICY AND ENERGY
STATE FOR EAP/CM AND EB
STATE PASS TO NUCLEAR REGULATORY COMMISSION
E.O. 12958: N/A
TAGS: ENRG TRGY ETTC IAEA CH
SUBJECT: Fujian: Alternative Energy Development Attractive Amid
Global Economic Downturn
REF: A) Guangzhou 302
UNCLAS SECTION 01 OF 03 GUANGZHOU 000157
SENSITIVE
SIPDIS
EMB BEIJING FOR DOE
USDOE FOR OFFICE OF THE SECRETARY
USDOE FOR INTERNATIONAL AFFAIRS
USDOE FOR FOSSIL POLICY AND ENERGY
STATE FOR EAP/CM AND EB
STATE PASS TO NUCLEAR REGULATORY COMMISSION
E.O. 12958: N/A
TAGS: ENRG TRGY ETTC IAEA CH
SUBJECT: Fujian: Alternative Energy Development Attractive Amid
Global Economic Downturn
REF: A) Guangzhou 302
1. (U) Summary: Fujian's alternative energy development is picking
up steam in spite of a worsening global economic downturn. While
coal will continue to be the primary source of energy in the near
future, but major investments are being made in nuclear power (more
than USD 20 billion at two plants already under construction),wind
power and (to a lesser extent because of the commercial exploitation
costs) tidal power. The expansion of Fujian's LNG terminal is also
proceeding. End Summary.
--------------
Ramping Up Nuclear Power Development
--------------
2. (U) Nuclear energy is the answer to Fujian's increasing energy
demand, at least according to experts at the Fujian Electric Power
Test and Research Institute. Fujian is currently constructing two
nuclear power plants in Fuqing and Ningde. Construction of the
Fuqing Nuclear Power Station began in November 2008. Fuqing, which
was developed under the 11th Five-year plan, is the first project to
be implemented following the unveiling of China's economic stimulus
plan, and is expected to help boost domestic demand, and stimulate
economic growth. The new plant, managed by China National Nuclear
Corporation (CNNC),will house six nuclear reactors. Phase I of the
project will build 2 - 1,000 megawatt reactors, using China's
domestic CPR-1000 technology. It will go online in 2013 and 2014.
Total investment in the project is RMB 100 billion (USD 14.7
billion).
3. (U) Construction on Phase I of the Ningde Nuclear Power Station
(NNPS) began in February 2008. Operated by China Guangdong Nuclear
Power Company (CGNPC),the plant will consist of six reactors
constructed in three phases. With an investment of RMB 51.2 billion
(USD 7.5 billion),Phase I of the project (reactors 1-4) is expected
to generate 30 billion kilowatt-hours (kwh) per year upon
completion. NNPS's first 1000 megawatt CPR-1000 reactors will go
online in 2012; the last will go online in 2015. The first-two
Phase I generators will have a 75% localization rate (i.e., 75% of
design and equipment will be sourced locally),while the last two
generators are expected to have a rate of 85%. Zhang Guobao, the
National Development and Reform Commission (NDRC) Vice-Minister told
the press that the Ningde Power Station would significantly ease the
strain on energy supply in the southeastern coastal area, as well as
aid environmental protection efforts in the region.
4. (U) Fujian plans to extend its nuclear capacity even further,
with additional projects in Zhangzhou and Sanming; but these are
still in preliminary stages. As the various nuclear projects go
online, Fujian hopes to export electricity to Guangdong and Zhejiang
provinces. Fujian's plans reflect China's desire to promote
independent development of nuclear power and are now benefiting from
economic stimulus efforts as well.
--------------
Wind Power Development
--------------
5. (SBU) Not surprisingly, wind power experts have a different take
on Fujian's energy future. Zhang Ronglin, Senior Engineer at the
Fujian Electric Power Test and Research Institute told us wind power
could be the answer to meet Fujian's current energy demand.
According to Wang Yan, Director of the Fujian Climate Studies
Center, most of the province's wind power potential is located along
the coast or on off-shore islands. Construction of a new wind power
project is underway in Zhang Pu, which will include 36 850-kilwatt
(kw) turbines in phase one, and another 36 1,250-kw turbines in
phase two. According to Jian Yongfeng, Xiamen Development and
Reform (DRC) researcher, Xiamen is planning to build three wind
power plants: Xiamen Neicuo Wind Power Plant (9,000 kw capacity),
Xiang'an Lianhe Wind Power Plant (40,000 kw capacity),and Dadeng
GUANGZHOU 00000157 002 OF 003
Island Wind Power Plant (100,000 kw capacity). Fujian is also
assessing Dong Shan Island, Long Hai and Ping Tan for windmill
project development.
6. (SBU) At present, Fujian's wind power accounts for less than 1%
of the province's power supply; Fujian has identified 41 million
kilowatts (kw) of total wind power potential, 6 million kw of which
can be exploited. The provincial government's goal is to increase
active wind power supply to 2.5 million kw by the year 2020.
--------------
Hydropower and Tidal Energy
--------------
7. (SBU) Fujian is one of China's leading provinces in the
development of small hydropower facilities, according to media
reports. The province has five major hydropower stations,
accounting for an estimated 32% of its total power supply (coal
accounts for 67.5%),and over 6,000 small hydropower stations,
located mostly in rural areas. By the end of the 11th Five-Year
Plan, the province plans to invest RMB 8 billion (USD 1.17 billion)
to develop an additional 1.2 million kw of small hydropower
capacity. However, after proposed expansions, Fujian's hydro
resources will soon tap out, leaving little room for expansion,
according to Zhang Ronglin, Senior Engineer at the Fujian Electric
Power Test and Research Institute.
8. (SBU) Fujian ranks number one in China in tidal energy potential,
with a total potential capacity of 10 million kw, almost half of
China's 21 million kw of exploitable capacity. Fujian's Electric
Power Test and Research Institute, however, is not optimistic about
tidal development in the near future due to the associated costs and
constraints of commercial production. Costs of tidal projects can
average three to four times more than a conventional coal-fired
plant, according to Huang Shulin, Deputy Director of Transportation
and Energy - Fujian Provincial Development and Reform Commission
(DRC).
--------------
LNG Expansion
--------------
9. (SBU) Launched in 2008, Fujian's LNG Terminal is poised to expand
its operations (ref A). The China National Offshore Oil Corp
(CNOOC)-controlled project is undergoing construction of two gas
storage tanks. With an expected completion date of 2011, the tanks
will increase the terminal's storage capacity to 640,000 cubic
meters.
10. (SBU) The terminal will eventually supply natural gas to three
gas-fired power plants in Putian, Jinjiang and Xiamen. The first
generating unit of the Putian Gas Power Plant went online in
December 2008. According to Fujian Electric Power Test and Research
Institute - Senior Engineer Zhang Ronglin, the two other gas power
plants will begin commercial operations this year. The Jinjiang
site will use generators from Singapore's Jin Ying Group. The
terminal will also supply gas to distribution centers in Putian,
Fuzhou, Quanzhou, Xiamen and Zhangzhou.
--------------
The Future of Fujian's Energy Sector
--------------
11. (U) Fujian is currently drafting its 12th Five-year Plan, and
Huang, from the provincial DRC, predicts that it will focus even
more on renewable and clean energy development, especially LNG.
While coal will remain Fujian's primary source of energy, the
provincial government will continue to prioritize the development of
nuclear and wind power, according to Zhao Daobiao, Vice Dean and
Senior Engineer at the Fujian Electric Power Test and Research
Institute. Professor Guo Xiangbing, Secretary General of the
GUANGZHOU 00000157 003 OF 003
Fujian Provincial Energy Research Council, predicted that in the
coming years, coal-fired power plants would experience a downturn as
renewable energies become more competitive.
12. (SBU) Even as Fujian works to develop alternative energy, the
province is also paying close attention to the promotion of energy
efficiency and energy conservation. According to media reports, the
provincial government has established a fund to promote
energy-efficiency in local industry; the fund will cover initiatives
such as technical assistance, transformation of coal-burning
industrial boilers, recycling of excess heat and pressure,
transformation of electric and mechanical systems, and
conservation/substitution of petroleum. Incentives will be awarded
to enterprises engaging in energy-saving projects. Projects that
save 1,000 tons of standard coal or more will receive RMB 150 for
each ton saved, up to RMB 2 million, according to the plan. In
addition, power suppliers that proactively invest in
energy-efficient projects will reportedly receive subsidies
amounting to 10-15% of the total capital investment if the total
project investment exceeds RMB 1 million, up to RMB 3 million.
GOLDBERG
SENSITIVE
SIPDIS
EMB BEIJING FOR DOE
USDOE FOR OFFICE OF THE SECRETARY
USDOE FOR INTERNATIONAL AFFAIRS
USDOE FOR FOSSIL POLICY AND ENERGY
STATE FOR EAP/CM AND EB
STATE PASS TO NUCLEAR REGULATORY COMMISSION
E.O. 12958: N/A
TAGS: ENRG TRGY ETTC IAEA CH
SUBJECT: Fujian: Alternative Energy Development Attractive Amid
Global Economic Downturn
REF: A) Guangzhou 302
1. (U) Summary: Fujian's alternative energy development is picking
up steam in spite of a worsening global economic downturn. While
coal will continue to be the primary source of energy in the near
future, but major investments are being made in nuclear power (more
than USD 20 billion at two plants already under construction),wind
power and (to a lesser extent because of the commercial exploitation
costs) tidal power. The expansion of Fujian's LNG terminal is also
proceeding. End Summary.
--------------
Ramping Up Nuclear Power Development
--------------
2. (U) Nuclear energy is the answer to Fujian's increasing energy
demand, at least according to experts at the Fujian Electric Power
Test and Research Institute. Fujian is currently constructing two
nuclear power plants in Fuqing and Ningde. Construction of the
Fuqing Nuclear Power Station began in November 2008. Fuqing, which
was developed under the 11th Five-year plan, is the first project to
be implemented following the unveiling of China's economic stimulus
plan, and is expected to help boost domestic demand, and stimulate
economic growth. The new plant, managed by China National Nuclear
Corporation (CNNC),will house six nuclear reactors. Phase I of the
project will build 2 - 1,000 megawatt reactors, using China's
domestic CPR-1000 technology. It will go online in 2013 and 2014.
Total investment in the project is RMB 100 billion (USD 14.7
billion).
3. (U) Construction on Phase I of the Ningde Nuclear Power Station
(NNPS) began in February 2008. Operated by China Guangdong Nuclear
Power Company (CGNPC),the plant will consist of six reactors
constructed in three phases. With an investment of RMB 51.2 billion
(USD 7.5 billion),Phase I of the project (reactors 1-4) is expected
to generate 30 billion kilowatt-hours (kwh) per year upon
completion. NNPS's first 1000 megawatt CPR-1000 reactors will go
online in 2012; the last will go online in 2015. The first-two
Phase I generators will have a 75% localization rate (i.e., 75% of
design and equipment will be sourced locally),while the last two
generators are expected to have a rate of 85%. Zhang Guobao, the
National Development and Reform Commission (NDRC) Vice-Minister told
the press that the Ningde Power Station would significantly ease the
strain on energy supply in the southeastern coastal area, as well as
aid environmental protection efforts in the region.
4. (U) Fujian plans to extend its nuclear capacity even further,
with additional projects in Zhangzhou and Sanming; but these are
still in preliminary stages. As the various nuclear projects go
online, Fujian hopes to export electricity to Guangdong and Zhejiang
provinces. Fujian's plans reflect China's desire to promote
independent development of nuclear power and are now benefiting from
economic stimulus efforts as well.
--------------
Wind Power Development
--------------
5. (SBU) Not surprisingly, wind power experts have a different take
on Fujian's energy future. Zhang Ronglin, Senior Engineer at the
Fujian Electric Power Test and Research Institute told us wind power
could be the answer to meet Fujian's current energy demand.
According to Wang Yan, Director of the Fujian Climate Studies
Center, most of the province's wind power potential is located along
the coast or on off-shore islands. Construction of a new wind power
project is underway in Zhang Pu, which will include 36 850-kilwatt
(kw) turbines in phase one, and another 36 1,250-kw turbines in
phase two. According to Jian Yongfeng, Xiamen Development and
Reform (DRC) researcher, Xiamen is planning to build three wind
power plants: Xiamen Neicuo Wind Power Plant (9,000 kw capacity),
Xiang'an Lianhe Wind Power Plant (40,000 kw capacity),and Dadeng
GUANGZHOU 00000157 002 OF 003
Island Wind Power Plant (100,000 kw capacity). Fujian is also
assessing Dong Shan Island, Long Hai and Ping Tan for windmill
project development.
6. (SBU) At present, Fujian's wind power accounts for less than 1%
of the province's power supply; Fujian has identified 41 million
kilowatts (kw) of total wind power potential, 6 million kw of which
can be exploited. The provincial government's goal is to increase
active wind power supply to 2.5 million kw by the year 2020.
--------------
Hydropower and Tidal Energy
--------------
7. (SBU) Fujian is one of China's leading provinces in the
development of small hydropower facilities, according to media
reports. The province has five major hydropower stations,
accounting for an estimated 32% of its total power supply (coal
accounts for 67.5%),and over 6,000 small hydropower stations,
located mostly in rural areas. By the end of the 11th Five-Year
Plan, the province plans to invest RMB 8 billion (USD 1.17 billion)
to develop an additional 1.2 million kw of small hydropower
capacity. However, after proposed expansions, Fujian's hydro
resources will soon tap out, leaving little room for expansion,
according to Zhang Ronglin, Senior Engineer at the Fujian Electric
Power Test and Research Institute.
8. (SBU) Fujian ranks number one in China in tidal energy potential,
with a total potential capacity of 10 million kw, almost half of
China's 21 million kw of exploitable capacity. Fujian's Electric
Power Test and Research Institute, however, is not optimistic about
tidal development in the near future due to the associated costs and
constraints of commercial production. Costs of tidal projects can
average three to four times more than a conventional coal-fired
plant, according to Huang Shulin, Deputy Director of Transportation
and Energy - Fujian Provincial Development and Reform Commission
(DRC).
--------------
LNG Expansion
--------------
9. (SBU) Launched in 2008, Fujian's LNG Terminal is poised to expand
its operations (ref A). The China National Offshore Oil Corp
(CNOOC)-controlled project is undergoing construction of two gas
storage tanks. With an expected completion date of 2011, the tanks
will increase the terminal's storage capacity to 640,000 cubic
meters.
10. (SBU) The terminal will eventually supply natural gas to three
gas-fired power plants in Putian, Jinjiang and Xiamen. The first
generating unit of the Putian Gas Power Plant went online in
December 2008. According to Fujian Electric Power Test and Research
Institute - Senior Engineer Zhang Ronglin, the two other gas power
plants will begin commercial operations this year. The Jinjiang
site will use generators from Singapore's Jin Ying Group. The
terminal will also supply gas to distribution centers in Putian,
Fuzhou, Quanzhou, Xiamen and Zhangzhou.
--------------
The Future of Fujian's Energy Sector
--------------
11. (U) Fujian is currently drafting its 12th Five-year Plan, and
Huang, from the provincial DRC, predicts that it will focus even
more on renewable and clean energy development, especially LNG.
While coal will remain Fujian's primary source of energy, the
provincial government will continue to prioritize the development of
nuclear and wind power, according to Zhao Daobiao, Vice Dean and
Senior Engineer at the Fujian Electric Power Test and Research
Institute. Professor Guo Xiangbing, Secretary General of the
GUANGZHOU 00000157 003 OF 003
Fujian Provincial Energy Research Council, predicted that in the
coming years, coal-fired power plants would experience a downturn as
renewable energies become more competitive.
12. (SBU) Even as Fujian works to develop alternative energy, the
province is also paying close attention to the promotion of energy
efficiency and energy conservation. According to media reports, the
provincial government has established a fund to promote
energy-efficiency in local industry; the fund will cover initiatives
such as technical assistance, transformation of coal-burning
industrial boilers, recycling of excess heat and pressure,
transformation of electric and mechanical systems, and
conservation/substitution of petroleum. Incentives will be awarded
to enterprises engaging in energy-saving projects. Projects that
save 1,000 tons of standard coal or more will receive RMB 150 for
each ton saved, up to RMB 2 million, according to the plan. In
addition, power suppliers that proactively invest in
energy-efficient projects will reportedly receive subsidies
amounting to 10-15% of the total capital investment if the total
project investment exceeds RMB 1 million, up to RMB 3 million.
GOLDBERG