Shanxi, Jiangsu to establish energy cooperation

Shanxi, China's major coal-producing province, is planning to step up energy cooperation with East China's Jiangsu province.

The coal-rich northern province is expected to transfer shares of its State-owned coal-fired power plants to enterprises in Jiangsu, according to the State-owned Assets Supervision and Administration Commission of Shanxi.

State-owned Jiangsu Guoxin Investment Group Ltd will take a major share of coal-powered power plants in the province, Shanxi SASAC said on its WeChat account recently. It is the first time that Shanxi has opened its coal-fired power sector to outside investment.

There will be no limit in terms of how many shares can be transferred to enterprises in Jiangsu, said the post.

"The partnership will bring capital, technology, management experience and talents to Shanxi," said Wang Yixin, vice-governor of Shanxi.

"More importantly, by building a market-based environment in the coal sector, we can ensure more scientific decision-making and standard management of coal enterprises in Shanxi," said Wang.

Han Xiaoping, chief information officer of China Energy Net Consulting, said: "The two provinces are highly complementary in power cooperation."

"Jiangsu is an economically developed province with high demand for energy consumption and insufficient energy resources, while Shanxi has large amounts of coal power resources," Han said.

Xiao Xinjian, a researcher from the Energy Research Institute of the National Development and Reform Commission, said: "This cooperation can better connect the upstream and downstream enterprises of energy consumption, so they can better fend off risks from price fluctuation."

"The market, rather than the local governments, should decide the mergers or shareholding between enterprises of the two provinces," Xiao said.

Earlier this month, a framework agreement on electricity transmission was signed between the two provinces, signaling the launch of the Jinbei (Northern Shanxi)－Nanjing 800kv High Voltage Direct Current (HVDC) transmission project.

The project, which aims to transmit up to 45 billion kWh of electricity from Shanxi to Jiangsu every year, went into operation on June 30.

Stretching 1,119 km and crossing six provinces, the Jinbei-Nanjing HVDC project is one of the 12 power transmission channels listed in China's National Action Plan on Air Pollution Control and Prevention.