Cascade power station in Heihe

The Heihe River is a larger inland river in western my country. It originates between the Qilian Mountains and the Datong Mountains and flows through the three provinces (regions) of Qinghai, Gansu and Inner Mongolia. The entire drainage area is more than 69,000 square kilometers. The cliffs on both sides of the Heihe River are steep, the rocks are exposed, the terrain is narrow, and the water flow is turbulent. The canyon is about 95km long, and the average river channel ratio is 9.1. The total annual runoff of the main stream is 1.596 billion cubic meters. Eight cascade power stations are planned, with a total installed capacity of 721,700 KW. , the annual average power generation is 2.537 billion Kwh. Heihe Hydropower Company has developed and constructed three projects with a total installed capacity of nearly 220,000 KW and a total estimated investment of 1.48 billion yuan. The respective introductions are as follows:

Erlongshan Hydropower Station

Erlongshan Hydropower Station is the fourth cascade power station planned by Heihe Hydropower. It is still invested and constructed by Heihe Hydropower Company and Ganzhou District Water Conservancy Bureau in a share ratio of 70 and 30. The power station is developed using a dam-less water diversion and run-off type, with a total designed installed capacity of 50,500 KW, an average annual power generation of 174 million kwh, and a total estimated investment of RMB 365 million. Among them: ADB loan of US$22 million. The power station started construction in December 2004. After 30 months of intense construction, the first unit was ready for trial operation on July 15, 2007. Units 2# and 3# were successfully connected to the grid for power generation on September 3 and 10 respectively. After full-load trial operation, the unit is in good condition and operates stably. It is planned that the annual power generation capacity will reach 180 million KWh, and the annual electricity sales income will be approximately 40 million yuan, with profits and taxes of 12 million yuan. The power station CDM project has also reached a carbon emission reduction agreement with the Asian Development Bank and Mitsui Corporation of Japan, and can receive free subsidies totaling US$10.5 million over five years.

Dagushan Hydropower Station

Dagushan Hydropower Station is the fifth cascade power station in the Heihe Hydropower Plan. It is exclusively invested and constructed by Heihe Hydropower Company. The power station has a total installed capacity of 65,000 KW, an annual power generation of 201 million kWh, and an estimated total investment of 470 million yuan. It is a medium-sized third-class project. It is a key investment and construction project in Zhangye City’s “Eleventh Five-Year Plan”. In July 2007, the Provincial Development and Reform Commission approved the project feasibility study report. The Dagushan Hydropower Station will be used as an ADB MFF portfolio investment mechanism project with a loan of US$28 million. The preparatory technical assistance work has been completed, and it is planned to conduct loan negotiations in October 2007, striving to make the loan effective by the end of the year.

Xiaogushan Hydropower Station

Xiaogushan Hydropower Station is the sixth cascade power station in the top-down Heihe Water Energy Planning. It is invested and constructed by Heihe Hydropower Company and Ganzhou District Water Conservancy Bureau with a share ratio of 66.6 and 33.4. The designed installed capacity is 102,000 KW, the annual average power generation is 391 million KWh, the total construction period is three years, the total investment is 701 million yuan, and the project capital is self-raised at 20% of the total investment. Among them: ADB loan of 281 million yuan (equivalent to US$35 million) was used. It is the first clean energy project in Gansu Province to use ADB loan. In April 2002, the Provincial Development and Reform Commission approved the project feasibility study report. The main project started construction in October 2003. After two and a half years of intense construction, the first unit was put into operation on May 12, 2006, and all three units were put into operation on July 29. The construction period is four months ahead of schedule and one and a half years ahead of schedule determined by the Bank. The total investment can be controlled within 650 million yuan, saving an investment of 51 million yuan. After the Xiaogushan Power Station was put into operation, the power generation capacity of the three units has actually reached 110 of the designed value, the annual power generation can reach more than 400 million KWh, and it can realize electricity sales income of 80 million yuan and profits and taxes of more than 25 million yuan. It is the first medium-sized hydropower project in Gansu Province invested and constructed by a local small hydropower enterprise, and it is also the largest industrial project invested and constructed by a local enterprise in Zhangye City in more than 50 years.

While working hard on ADB loans, we also actively capture carbon market information. In June 2005, we formally signed the "Xiaogushan Hydropower Station Emission Reduction Offset Purchase Agreement" with the World Bank. Received free subsidies of US$1.35 million from the World Bank for clean energy development projects to reduce carbon dioxide emissions, and a total compensation of US$13.5 million over a 10-year period.

The emission reduction amount in 2006 has been verified by the World Bank, and the free carbon sink income has entered the implementation stage. It is the first hydropower project in China or the Asia-Pacific region to receive subsidies from the World Bank's prototype carbon sink fund.