Shanxi investment deals show shift to green energy

Shanxi province, a key national coal producing region, announced on Tuesday a set of investment agreements set to shift its economy toward low carbon development.

A total of 42 deals have been signed, with investment totaling 62.52 billion yuan ($9.1 billion). Among them, 25 relate to the energy sector, with investment totaling 35.91 billion yuan. Other deals range across sectors such as manufacturing, new energy, big data and pharmaceuticals.

"These projects will play a leading role in facilitating Shanxi's industrial upgrade and overall development," said Han Chunlin, head of the Department of Commerce of Shanxi province.

"The development of such industries is essential for Shanxi to build up a well-developed supply chain."

Han said that while focusing more on high-end manufacturing and cultivating emerging sectors, the province will also promote green and efficient coal use going forward.

Among the 25 energy-related projects, a total of 2 billion yuan of investment has been earmarked for research and development into applying big data in the sector. A total of 1 billion yuan will finance R&D into increasing the power generation efficiency of lower grades of coal.

"Shanxi's development of high-end manufacturing and new materials will inject new strength into its economy, since the province's economy has long relied on coal," said Wu Lixin, deputy director of the Coal Strategic Planning Research Institute of the China Coal Research Institute.

Coal contributes about 80 percent of the province's energy consumption. If the province does not seek out new development engines, its economy will face harsh challenges when coal deposits run out, she said.

It is good that the province has been working on the issue, and it will make impressive progress if it carries out its plans successfully, Wu said.

Over one-third of the projects signed on Tuesday involve more than 1 billion yuan in investment each.

The aluminum-magnesium alloy supply chain program signed between Jingang Energy Group Co Ltd and the Shanxi Transformation and Comprehensive Reform Demonstration Zone was the biggest deal, involving a 10-billion-yuan investment.