OREANDA-NEWS. July 11, 2012. Zhejiang Southeast Electric Power Co. Ltd., the main power producer in eastern China’s Zhejiang Province, has begun pre-commission checks at a gas-fired distributed power project, state media reported.

Shanghai Stock Exchange-listed Southeast Electric deployed RMB 1.49 billion (USD233.1 million) to install a combined heat and power co-generation turbine unit in the Xiaoshan power plant in Zhejiang’s capital of Hangzhou, according to the China Economic Times, a newspaper published by the State Council’s Development Research Center.

Construction on the 350 megawatt unit began in June 2011, the report said, adding that the project will offtake 400 million cubic meters (MMcm) of gas per year from Zhejiang’s gas pipeline network when it begins operations this month.

The Xiaoshan power plant currently utilizes two V94.3 gas-to-power turbine units built by Siemens.

The development is the first of 14 gas-fired distributed power projects planned by the Zhejiang provincial government, which will have 7.93 gigawatts (GW) of total installed capacity. The projects are intended to ease power shortages during peak consumption periods in the summer, and are all expected be operational by the end of 2013, the report noted.

Zhejiang had 18 operational gas turbines with combined installed capacity of 3.95 GW as of July last year, accounting for 10 percent of the province’s total capacity, the National Energy Administration (NEA) said at the time. The province’s gas-to-power sector consumed 1.25 billion cubic meters (bcm) of gas from June 15 to September 15 last year, up by 56 percent from the same three-month period in 2010.

Zhejiang’s gas grid is underdeveloped as the province has traditionally relied on imports of liquefied petroleum gas (LPG) shipped to a number of local receiving terminals, said Zhuochuang Information analyst Li Lingxuan. The lack of development has dissuaded China National Petroleum Corp. (CNPC) and China Petrochemical Corp. (Sinopec Group) from allocating large volumes of pipeline gas to Zhejiang, frustrating government plans to boost gas-fired power generation, according to Li.

The NEA urged CNPC and Sinopec Group in July 2011 to increase their aggregate gas supply to Zhejiang by 1.5 MMcm per year to meet soaring summer demand.

The launch of the Hangzhou plant’s gas turbine this month will coincide with the start of gas deliveries to Zhejiang via CNPC’s 2nd West-East Gas Pipeline (WEP II). The supply boost from WEP II will enable Zhejiang to redirect LPG from residential use to feedstock for chemical plants, Li said.