Sinomania!

An amendment to China's renewable energy law puts the regulations under direct central government control. The amendment also strengthens the requirement of power companies to connect renewable energy producers to electricity grids.

As the first decade of the 21st Century comes to a close China now has the world's largest electricity transmission network at 375,000 kil0meters or over 233,000 miles of transmission lines. And there are big developments ahead. Throughout the nation China's utilities plan to install 150 billion smart meters to allow greater flexibility in rate pricing.

State Grid, the 15th biggest company in the world according to Fortune magazine, sold 20 billion Yuan (just under $3 billion US dollars) worth of 7 and 10 year corporate bonds on Christmas Eve. The money raised will be used in part to build an ultra-high voltage transmission line from Fulong, Sichuan, near the Xiangjiaba hydroelectric dam to a high voltage AC station at Nanhui, Shanghai. And State Grid may partner with Duke Energy to build transmission lines in the USA....

Beijing's National Development and Reform Commission (NDRC) is deregulating the sale of coal. New regulations say the central government will no longer hold an annual pricing conference. Instead individual power generators have a month to negotiate prices for 2010 coal deliveries with mining companies directly. The new rules also give priority to transporting thermal coal for power generation on Chinese railroads over coal for direct industrial use (coking coal for steel for example). Railroad companies can no longer allocate quotas prior to actual delivery contracts banning broker middleman from buying up quotas for spot coal sales. The end result may provide price stability overall but indications are Beijing will tolerate higher electricity rates as a result of these reforms.

China like the USA relies on coal for the majority of its baseline electricity generation. But China's dependence is higher - coal accounts for around 75% of electricity production - and China consumes more coal than any other nation. And coal use is growing and is expected to rise for the next few decades even as its use for power generation declines with more nuclear, hydro, and alternative energy production. The UN Copenhagen Climate Change Conference will end without addressing (let alone solving) this essential point: no real progress on air pollution can happen without reducing the reliance on coal for electric power by China and the USA.....

Beijing's all-powerful National Reform and Development Commission has approved an increase in per kilowatt hour electric utility rates of 0.028 Yuan (approximately 4 cents US) or 5.7% for commercial customers. Residential rates will remain unchanged until January 2010 when they will increase on a new metric based on useage over average household rate - this will impact urban dwellers far more than rural users. China's big power transmitters - State Grid Corp., one of the largest companies in the world, and China Southern Power Grid Corp., have lost money all year due to the increased cost of coal. China like the USA relies principally on coal to generate base electricity demand....

Much has been written on this blog about Beijing's desire to see China emulate France and Japan in using nuclear energy to generate a substantial portion of the nation's electricity needs. China National Nuclear Corp. and China Guangdong Nuclear Power Group are steaming ahead with domestic production of AP1000 nuclear reactors under a technology-transfer agreement with Westinghouse. Three new AP1000 nuclear plants will begin construction soon in inland provinces - the first such facilities away from the Chinese coast - at locations in Hunan, Hubei, and Jiangxi Provinces. The plants may go online as soon as 2015. According to Ye Qizhen, one of China's foremost nuclear experts, Beijing hopes to have 400 Gigawatt of operational nuclear power by 2050....

And no it is NOT to keep the lights on in Beijing during the Olympics...

Disruption in coal supplies and shortage of generation and transmission capacity in China is affecting China. Particularly hard hit is aluminum smelting.

A massive infrastructure build with even more cental investment spending is looming in China's future. More on that soon!