Construction of major projects in a 50-billion-yuan energy cluster, one of the largest coal chemical bases in Asia, started yesterday in the Ningxia Hui autonomous¹ region.

The 3,500-sq-km cluster, known as Ningdong Energy-Chemical Base, in which total investment is projected to hit 300 billion yuan by 2020, is part of the government's efforts to develop resources in Western China.

Leading domestic energy companies including State Grid² Corp of China and Huadian Power International Corp yesterday started construction of three power plants, three coal mines, one electricity distribution line and one coal-to-petrochemical plant within the base.

State Grid, China's biggest power distributor, will invest 10.4 billion yuan to build a 660-kilovolt transmission line linking coal-fired and hydropower stations in Ningxia with Qingdao in the eastern province of Shandong. The line, to be completed by 2010, will help ease the pressure to transport the dirty coal from western China to Shandong.

Huadian Power and Ningxia Power Generation Group will lead the construction of three coal-fired electricity plants worth 16.4 billion yuan in the region. The plants will have a total capacity of 4,400 megawatts.

"The financial crisis has weakened the coal prices and electricity demand in China, providing an opportunity to restructure China's energy industry," said Zhang Guobao, head of the National Energy Administration.

Ningxia currently has 30 billion tons of proven coal reserves, of which 27.3 billion are in Ningdong, the local government said.

By 2020, Ningxia will have power plants with 16,000 megawatts in total capacity, coal mines able to produce 130 million tons of the fuel a year and coal-to-chemical plants with an annual capacity of 20 million tons.

Questions:

1. How much money will the new energy cluster in Ningxia cost?

2. What effect has the financial crisis had on the energy sector³?

3. When is the project expected to be complete?

Answers:

1. 50-billion-yuan energy.

2. Served to weaken coal prices and energy demand providing an opportunity to restructure.

1. 3. 2020.