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A 27 MW wind farm is to be built on the North and South Changshan Islands, Shandong province. It is a joint project between state owned China Huaneng Group (CHNG) and CLP Holding, a listed utility in Hong Kong, with each taking a 55% and 45% stake in the venture, respectively. The total investment is close to CNY 247 million.

Tenders for turbine supply are due to be issued shortly, with around 30 machines rated at 900 kW expected to be sought. Initial site preparation and construction work is underway with the project scheduled for completion within ten months.

Shandong's provincial government has pledged to buy the electricity generated by the wind farm. The price it will pay is yet to be determined, but is expected to be higher than for power generated by conventional facilities, with the local grid operators covering the price differential. Fan Xianen of Changdao County's Economic and Trade Bureau says the rate is likely to be around CNY 0.70/kWh, which will be enough to allow the investors "a reasonable return." CHNG expects the wind farm to increase the company's green power output to 5%. This would enable it to exactly meet the target widely expected to become compulsory for all power companies once the Renewable Energy Promotional Act comes into effect at the end of the year at the earliest.

CHNG is one of China's biggest energy players. Just over two years ago it established a renewable energy subsidiary, Huaneng Renewable Energy & Environmental Protection (Holding) Company. While most of its capacity is fossil fuelled and hydro based, it does have over 100 MW in wind power capacity on its books, including a 13.5 MW project in south China's Shantou City and three additional on-going projects in other parts of the country, which together total 97 MW. In addition, the group was successful last year in bidding for a 200 MW concession project in northeast China's Jilin province.

CLP is under increasing pressure to power the Hong Kong economy with environmentally friendly energy, at a time when deteriorating air quality threatens to tarnish the city's image. The company hopes to increase its renewable energy production using hydro and wind. It is aiming for a target which will require the addition of at least 600 MW of renewables capacity over the next five years. "We are prepared to see a lower return on renewable projects," says the company's Andrew Brandler.

Changshan County has a couple of other wind projects on the waiting list, Fan Xianen says. These include a 12 MW project for Tuoji Island and a 7.5 MW project on the Big Heishan Island.