Exclusive: State Grid Connects With Insurance Giant on $3.3 Billion Power Project
State Grid Corp. of China, the country’s dominant power distributor, has partnered with a top insurer to build a 23.1 billion yuan ($3.3 billion) ultra-high voltage (UHV) power line to connect the energy-rich west with the power-hungry east, the company has announced.
The deal marks a major step forward in the state-owned power company’s move to carry out “mixed ownership reform,” a government strategy aimed at bringing in outside investors to try to reinvigorate the country’s state sector.
For the project, the State Grid has partnered with state-owned People’s Insurance Company of China (PICC) to build the 1,587-kilometer (986 miles) line, which will transmit solar- and wind- generated electricity from Northwest China’s Qinghai province to Central China’s Henan province, the company said Tuesday. The UHV will also traverse the northwestern provinces of Gansu and Shaanxi.
This project is one of the 12 ultra-high-voltage power lines that the central government approved in its latest infrastructure drive. UHV lines are specially designed to transmit electricity long distances with less energy loss than more conventional lines.
Since China built its first demonstrational ultra-high-voltage power line, a 1,000-kilovolt alternating current line, between North China’s Shanxi province and the central province of Hubei in 2008, 22 UHV power lines have been completed nationwide.
In September 2018, the central government announced 12 more UHV lines will be built in the country at a cost of 200 billion yuan.
The Qinghai-Henan line is an 800-kilovolt direct current line. The National Development and Reform Commission, the country’s top economic planner, approved the project in October last year. Construction began a month later. The line is scheduled to begin transferring electricity next year.
Luo Qianyi, State Grid’s chief accountant, said at a press conference Tuesday in Beijing that the two companies have signed a cooperation agreement.
“The two sides will establish a joint venture for this project,” Luo told Caixin, adding that PICC's funds will come from its asset management arm. “Now we are working with PICC Asset Management on a due diligence assessment.”
PICC plans to hold 40% of the joint venture, Caixin has learned.
Luo said on Tuesday that another UHV power line, a 2,200-kilometer line built to transmit hydroelectric power from Southwest China’s Sichuan province to Zhejiang province on the eastern coast, will also involve outside investment.
The starting point of the new line, the Baihetan hydropower station on the upper reaches of the Yangtze River, is expected to be finished in 2022, becoming China’s second-largest hydropower station after the mammoth Three Gorges Dam.
Contact reporter Wu Gang (firstname.lastname@example.org)
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