A place that occupies less than 1 per cent of China's land, yet contributes almost 20 per cent of its GDP, is no doubt a powerhouse driving the world's fastest-growing major economy.

The Yangtze River Delta (YRD), with the commercial hub of Shanghai at its centre, is developing at such an amazing pace that it put sustainable energy supply at the bottom of its agenda.

But in 2004, when China was plagued with a severe nationwide electricity shortage, the YRD region was among the worst-hit areas.

Both local governments and companies have realized they must address the pressing issue of economic development and energy sustainability by developing alternative energy options to the dirty coal and pricey oil.

The whole region, comprised of Shanghai and 15 cities in Jiangsu and Zhejiang provinces, is at the forefront of China's push to use renewable energies such as wind, solar and biomass to generate electricity.

This also falls in line with the country's policy incentives in favour of renewable energy development, which was highlighted by the enforcement of its first law on spreading the use of alternative energy sources at the beginning of this year.

A slew of new energy projects have been planned to drive the fast-growing regional economy.

The China Three Gorges Project Corp (CTGPC), owner of the world's largest hydro-project, has signed three agreements with three local governments in East China's Zhejiang Province to develop wind farms that turn wind resources into electricity.

These three projects, to be located in Cixi, Linhai and Zhoushan, not only mark another strategic move into the wind power market by the hydro power company, but also, more importantly for local residents, offer a clean source to secure the energy supply, industry experts have said.

The move followed the company's announcement that it had received the central government's approval to build a 200-MW (megawatt) wind farm in Dongtai of Jiangsu. Preparatory work for the construction of the Jiangsu project is expected to start this year.

By the end of 2004, the installed capacity of wind turbines in Zhejiang and Shanghai reached 39.35 MW, accounting for 5 per cent of the total figure across the country.

The proportion is expected to grow, as new projects are scheduled to emerge in the near future, industry experts said.

"The YRD region is rich in wind resources, so special efforts should be given to wind power development in the offshore areas," said a report drafted by the energy research institute under the National Development and Reform Commission.

On top of wind, the region is also exploring harnessing sunlight to produce an efficient and clean energy.

One of the world's leading solar energy companies, Suntech Power Holdings Co Ltd, is based in Jiangsu Province. It manufactures photovoltaic cells that turn sunlight into electricity.

The company made its listing debut in New York last December, issuing 26.4 million American depositary shares at US$15 each.

It has announced plans to double its production capacity to 240 MW this year a level none of its competitors are expected to match, according to Renaissance Capital, an IPO research firm based in the United States.

"Potential for the development of renewable energy is enormous, as energy source diversification is a fundamental way to ensure future energy security," said Li Junfeng, secretary-general of the China Renewable Energy Industries Association.

With the aim of increasing energy supply but lowering environmental pollution, local governments in Jiangsu Province have also signed accords with the State-owned China Energy Conservation Investment Corp, to develop biomass power plants in the region.

The Beijing-based China Energy Conservation Corp said it would spend as much as 600 million yuan (US$75 million) to build facilities that will use biomass such as the stems of cut wheat to generate electricity.

A similar project is also planned for Shaoxing, of the neighbouring Zhejiang Province. It will use steam generated from garbage and sewage treatments to produce power.

Source: China Daily