China Energy/Power Technology, Strategic Layout of Resources: News & Discussions

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22:59, 02-Jun-2019
China builds its first 500kv submarine power cable in Zhoushan Strait
CGTN

The construction of the 500-kilovolt (kv) ultra-high voltage submarine cables laid beneath the Zhoushan Strait in east China's Zhejiang Province was completed on Sunday, which is expected to further promote the development of the local economy.

Linking the power grids between Zhoushan and Ningbo city in the province, the 17-kilometer cable is the first domestically-made 500kv submarine cable, and also the world's first 500kv cross-linked polyethylene insulated submarine cable, which is more safe and eco-friendly.

"Back then we had two plans. One is to use the imported submarine oil-filled cable, but it can only load 600,000 kw, failing to meet our need. So we abandoned it. The experts discussed this issue and analyzed all parameter requirements, figuring out that we have the capability to produce the cross-linked polyethylene insulated submarine cable by ourselves. If we succeed, the cable can load 1.1 million kw," said Xuan Yaowei, deputy manager of Zhoushan Power Supply Company.

To lay the submarine cables, the State Grid Corporation specially built China's first workboat which is able to load cables weighing 5,000 tons. With completely independent intellectual property rights, the boat can lay and maintain cables and operate as normal in a violent storm.

In addition to the submarine cables, the 500kv power transmission project also includes building two 380-meter-high power transmission towers in Zhoushan, the highest of their kind in the world.

To lift and install the heavy parts of the towers high above the ground, the technicians independently developed a device, which can hoist an object weighing 30 tons.

Zhoushan is the last city in Zhejiang Province that doesn't have the 500kv power transmission lines. When this project is put into operation, the days when Zhoushan only has the 220kv grid frame will be history and it will greatly boost the development of the local economy.

Since the Zhoushan Archipelago New Area was established in 2011, several state-class projects have settled there, leading to a surge in electricity consumption. To solve the problem, China's State Grid Corporation started to build the Zhoushan 500kv Power Transmission Project in December 2016.

"When this project is put into operation, it will fill the gap of Zhoushan's 500kv power grid and will expand Zhoushan islands' transmission capacity by 3.3 times, which will greatly meet the power demands of the construction of the Zhoushan Archipelago New Area and Zhejiang Free Trade Zone and meet the power demands of the key projects in the next 5 to 10 years," said Zhang Yi, deputy director of the Zhoushan Municipal Development and Reform Commission.

 

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Shanghai Finishes Building World's Largest Hydrogen Fueling Station
XU WEI
DATE : JUN 05 2019/SOURCE : YICAI

Shanghai Finishes Building World's Largest Hydrogen Fueling Station​

(Yicai Global) June 5 -- Shanghai Chemical Industry Park today completed construction of the world's largest hydrogen fueling station.

The station covers about 8,000 square meters and can refuel at pressures of either 35 megapascals or 70 megapascals, Xinmin Evening News reported. It can power up to 100 buses, 300 light commercial vehicles or 500 passenger cars each day.

State-owned carmaker SAIC Motor penned a deal with the industry park last year to build the station as part of a nationwide demonstration base for fuel-cell vehicle fueling stations. The manufacturer hopes the facility will speed up commercialization of its own FCVs and help turn Shanghai into a world-class innovation hub for the sector.

SAIC will also run its hydrogen-powered FCV80 buses at the park for daily commuters.

Hydrogen-powered cars are driven by burning hydrogen, so its only emissions are water. The vehicles are more efficient than combustion engine vehicles and are considered safer and more environmentally friendly.

The central government is also keen to push hydrogen vehicle development. On May 24, it laid out plans to build a 'hydrogen corridor' in the Yangtze River Delta region which it hopes will encourage FCV use.

The corridor will include four highways, each with hydrogen refueling stations, in Shanghai and Jiangsu, Zhejiang and Anhui province. The government hopes to have the new roads in operation in 2021.

 

[JSCh]

NEWS RELEASE 5-JUN-2019
Augmenting microgrid technology: A new way for reliable power
Scientists design microgrid system that promises improved stability, safety, and resilience

CHINESE ASSOCIATION OF AUTOMATION

A group of American and Chinese researchers has designed and tested a microgrid system that is both robust and reliable - and therefore capable of delivering energy safely and without interruptions. This is particularly important during harsh weather conditions and times of peak consumption and is critical for economic growth.

The research was published in the March issue of IEEE/CAA Journal of Automatica Sinica (JAS), a joint publication of the IEEE and the Chinese Association of Automation.

A microgrid, or small-scale electric grid, is a network of nodes that provide, store and use energy. Electricity moves from each of the locations within the microgrid in the form of electric current, which can travel in two modes - either in just one direction, in which case it is called direct current (DC) or in several different directions that change periodically, also referred to as alternating current (AC). However, electrical sources that deliver electricity in just one direction are vulnerable to sudden changes, such as changes in load that can result in a voltage overload.

"In order to create parallel DC microgrids that function safely and efficiently, focus should be placed on two things. One is the regulation of voltage and one is the amount of electricity that is shared among users in a network," says Wenxin Liu, PhD, corresponding author and Associate Professor with the Department of Electrical and Computer Engineering, Lehigh University, Bethlehem, PA.

Specific to this paper, the researchers have enhanced a microgrid with a single-DC source in such a way that it functions as a safe and reliable electricity source by aligning several energy sources in parallel and basing the microgrid on a decentralized control algorithm. Decentralized control - also called distributed control - means that there is not a single point within the grid where the decision is made. Rather, each point within the grid makes a decision on its own and the resulting output is the aggregate response of all of the nodes.

With this setup, the researchers have designed a microgrid that delivers a large amount of electricity while overcoming the aforementioned burdens of system overload and shutdown. Put simply, they have found a way deliver a constant and uninterrupted stream of high amounts of electricity safely.

"The parallel operation of distribution generators offers several advantages including expandability, reliability, efficiency, and ease of maintenance. This single-energy-source topology has a wide range of applications within electrical power systems of avionics, automotive, telecom, marine, and rural areas," says Liu.


Augmenting microgrid technology: A new way for reliable power | EurekAlert! Science News

 

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CNPC to ramp up clean energy output
By Zheng Xin | China Daily | Updated: 2019-06-11 10:02

A CNPC employee works at an LNG station in Rudong, Jiangsu province. [Photo by Xu Congjun / For China Daily]

China National Petroleum Corp, the country's biggest oil and gas company, said recently that it will ramp up clean energy production capacity and ensure that domestic natural gas accounts for more than 50 percent of its primary energy output at home by 2020.

Domestic natural gas output accounted for 50 percent of its primary energy output at home last year and is expected to reach 55 percent by 2025, said Zhou Aiguo, deputy director of its quality health safety and environment department.

The company, also known as PetroChina, said its natural gas production reached 138.02 billion cubic meters in 2018, of which 109.37 billion cubic meters were domestic output, a year-on-year increase of 5.9 percent and which accounted for 70.2 percent of the domestic natural gas production last year, according to the 2018 Environmental Protection Communique 2018.

The company has also increased imports of overseas pipeline natural gas and LNG last year while striving to further improve its production capacity in the upcoming years.

The company said shale gas production in Sichuan reached 4.27 billion cubic meters in 2018, up 40 percent compared with the previous year and helped ensure national energy security.

The daily output of PetroChina's shale gas in southern Sichuan reached 20.11 million cubic meters, with a year-on-year increase of 119.3 percent, it said.

It has also released 300,000 metric tons of national VI standard gasoline and diesel to the market every day since January this year.

According to Wang Yilin, chairman of CNPC, chemical oxygen demand and ammonia nitrogen emissions, sulfur dioxide and nitrogen oxides decreased by 7.9 percent, 7 percent, 7.6 percent and 7.2 percent respectively year-on-year in 2018.

The company said it would invest another 31.9 billion yuan ($4.6 billion) in the 2019-20 period to strengthen pollution prevention and boost low carbon transformation.

Li Li, energy research director at ICIS China, a think tank focusing on energy trends, said it has become a trend for national oil majors to increase their share of clean energy in the domestic primary energy production to optimize the country's energy structure, including China Petroleum and Chemical Corp, which earlier pledged to increase its share of clean energy production capacity by increasing its output of natural gas, shale gas and related facilities.

The resource and environment research center of Sinolink Securities said earlier that national oil and gas majors, including PetroChina, will have sufficient time to ensure gas supply for the heating season this year.

 

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GW-class turbine unit for China's Baihetan dam completed
Xinhua | Updated: 2019-06-18 18:36

The construction site of the Baihetan hydropower station, the world's second-largest hydropower project, which is located on the upper reaches of the Yangtze River. [Photo/Xinhua]

CHENGDU - China's million-kilowatt generating unit for the Baihetan hydropower project has seen its last core component, the water distributor, completed.

The distributor weighed more than 870 tonnes and was developed by Dongfang Electric Machinery Co., Ltd. in Southwest China's Sichuan province, a leading Chinese electric machinery maker.

As a key part of controlling the direction and volume of water inflow, the distributor has met high technical targets in terms of vertical gap and end gap of guide vanes and concentricity, the company said.

Based on the successful experience of the construction of large hydropower plants such as the Three Gorges and Xiluodu, Dongfang Electric Machinery has made a series of technological innovations to improve product performance, reliability and expected service life.

Gate leakage has been reduced to a tenth of the normal level to avoid significant losses in efficiency. The 0.05-mm concentricity of the installation was also above top-quality standards, the company said.

On the Jinsha River, an upper section of the Yangtze, the Baihetan dam is the second largest after the Three Gorges project in central Hubei Province in terms of installed capacity.

 

[JSCh]

Large HDR resources discovered in North China
Source:Global Times Published: 2019/7/1 21:13:40

Chinese researchers found large amounts of hot dry rock (HDR) resources in the Beijing-Tianjin-Hebei region equivalent to 22.8 billion tons of coal.

Researchers from the Hebei Provincial Bureau of Coal Geology discovered more than 500 square kilometers of HDR resources 5,000 meters underground in Matouying, Tangshan, Beijing-based newspaper Economic Daily reported.

Energy from the HDR resources equals 22.8 tons of coal. They can be directly used in power generation, heat supplies and planting, the Economic Daily reported citing Zhang Guishuang, deputy director of the Hebei coal geology bureau.

HDR resources refer to heat energy contained in rocks buried between 3 to 10 kilometers underground. It is clean energy with the characteristics of large reserves, zero emissions, safe and a high utilization rate.

Experts estimated that the total amount of energy contained in HDR in the Earth's crust was roughly 30 times contained in petroleum, natural gas and coal. Experts believe that the resource discovered in the Beijing-Tianjin-Hebei region is shallow. Developing it will help optimize the energy structure, improve the atmospheric environment, and prevent pollution in the region, the report said.

 

[JSCh]

China-Russia gas pipeline construction begins new phase
By Zheng Xin | chinadaily.com.cn | Updated: 2019-07-04 16:27

Technicians inspect gas facilities in Horgos, Northwest China's Xinjiang Uygur autonomous region. [Photo/Xinhua]

Construction of the middle part of the China-Russia east-route natural gas pipeline started on Thursday and is expected to be completed next October, according to China National Petroleum Corp (CNPC), the country's biggest oil and gas company.

The middle part of the project stretches from Jilin province to Hebei province. Upon completion, the pipeline is expected to ease the gas shortage in Northeast China and the Beijing-Tianjin-Hebei region.

The China-Russia gas pipeline is expected to provide China with 38 billion cubic meters of natural gas from Russia annually.

The China-Russia East-Route natural gas pipeline makes up the eastern portion of Russia's "Power of Siberia" pipeline and runs from eastern Siberia to China.

With the project going into operation, Sinolink Securities' Resource and Environment Research Center said it expects Russia's share in China's gas market will increase.

CNPC has also signed an agreement with Novatek, Russia's top independent gas producer, in April, to buy a 10 percent stake in its new liquefied natural gas project, Arctic LNG 2, to increase gas supply in the country.

 

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China steps up investment in hydrogen amid renewable energy push
By Wang Cong and Shen Weiduo Source:Global Times Published: 2019/7/8 21:58:40

Policy aims for long-term solution as short-term constraints abundant: analysts

Participants attend the third International Hydrogen Fuel Cell Vehicle Congress, which was held in Nantong, East China's Jiangsu Province in October 2018. Photo: VCG

China has been ratcheting up investments in hydrogen energy over the past few months with central and local governments throwing considerable support and policy guidance at industry participants to explore what is widely considered a promising source of renewable energy.

As an ardent supporter of the nascent clean energy sector, the development of hydrogen stations for new energy vehicles was included in the Government Work Report for the first time this year, a move that Chinese industry participants see as the government's endorsement of the hydrogen energy economy.

Apart from the national policy guidance from the central government, local authorities have actively rolled out plans to boost the sector.

For instance, Wuhan, capital of Central China's Hubei Province, announced plans to build up to 20 hydrogen fueling stations, and to have 3,000 vehicles powered by hydrogen fuel cells by 2020. Shanghai said it will install 50 hydrogen fueling stations and produce at least 20,000 passenger hydrogen vehicles by 2025.

Many domestic automobile companies are actively laying out their hydrogen fuel cell plans.

Great Wall Motor has invested more than 1 billion yuan ($149 million) in research and development in hydrogen energy and fuel cell vehicles.

"Unlike China, there aren't many countries that can make this technology possible, because you have to rebuild a whole system to achieve that. It's expensive and a huge undertaking," Han Xiaoping, chief information officer at China5e.com, a website specializing in energy information and consulting services, told the Global Times on Monday.

China is the world's largest hydrogen producer by a long way.

It produces about 22 million tons of hydrogen per year, accounting for one-third of the world's production, according to a report in the Economic Daily on Monday.

With years of investment and layout, the country's hydrogen industry has gradually taken shape, the report said, adding that China is expected to become the world's largest hydrogen and fuel cell market by 2030, and that hydrogen energy will support 10 percent of domestic energy demand by 2040.

Barriers ahead

While China, with its massive state and private resources, is among the best-positioned to lead the drive for hydrogen energy, such investments are unlikely to yield any short-term breakthroughs as economic and technological challenges associated with hydrogen are abundant, analysts noted.

"One of the major problems is that hydrogen is much more expensive than both electricity and fossil fuels such as petroleum, since it's difficult to generate," said Lin Boqiang, dean of the China Institute for Studies in Energy Policy at Xiamen University.

He noted that there remain technology barriers such as storage and transportation, which means it is difficult to apply the new energy on a large scale.

"Hydrogen is more likely an attempt and option that China could resort to as it has been pursuing energy safety and a better environment over the past years," Lin told the Global Times on Monday, adding that development in the sector is not a matter of three or five years.

With government support, companies and industry participants may see opportunities, but those opportunities are still far away as the industry is in its infancy, said Lin.

Meanwhile, despite the importance it has been given, hydrogen is currently only involved in the overall development plan of the new energy automobile industry in China, and there is no top-level design and strategic planning about the sector itself, experts said.

Countries such as Japan, Europe and South Korea have all issued clear hydrogen energy roadmaps.

 

[JSCh]

Chinese energy giants join to exploit untapped oil, gas reserves at 81 sites
By Chi Jingyi Source:Global Times Published: 2019/7/9 21:58:40

Energy giants join to exploit untapped oil, gas reserves at 81 sites

Photo: VCG

Two Chinese state-owned energy giants have tied the knot to explore three oil and gas-rich basins in Western China on Monday, a move analysts say will increase oil and gas reserves and production to safeguard the nation's energy security.

China National Petroleum Corp (CNPC) and China Petrochemical Corp (Sinopec) will jointly conduct research and exploration in the Junggar Basin and Tarim Basin in Northwest China's Xinjiang Uyghur Autonomous Region and the Sichuan Basin in Southwest China.

"This collaboration between CNPC and Sinopec will help increase oil and gas reserves, and ensure energy security," Han Wenke, an analyst from the Energy Research Institute under China's National Development and Reform Commission, told the Global Times on Tuesday.

The cooperation involves the exploration rights to 81 sites and covers an area of 305,800 square kilometers, CNPC said on its website.

"China imports a large amount of oil and gas every year, posing a threat to national energy security," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Tuesday.

In April, China imported 43.7 million tons of crude oil worth $14.4 billion, data from the General Administration of Customs showed. Natural gas imports reached 10.6 billion cubic meters in the month, up 12.2 percent year-on-year.

As China's dependence on fuel imports increases, there is more pressure on domestic production and storage facilities, Han said.

"China's oil reserves are constant, which means there's not much space left to explore and produce. About 70 percent of the crude oil production relies on imports and 40 percent of natural gas is imported," Lin said. "But China has a huge amount of undeveloped gas reserves, for example, shale gas."

By the end of April 2018, China's proven reserves of shale gas had exceeded 1 trillion cubic meters, according to the China Mineral Resource Report 2018.

It is estimated that 3 billion cubic meters of shale gas is equivalent to burning 6 million tons of coal, reducing carbon dioxide emissions by 4.2 million tons.

"There isn't enough exploitation of gas reserves and the technology is not advanced," Lin added. "Major domestic oil companies have increased investment to seek technological breakthroughs in oil and gas exploration so they can vigorously enhance development and production."

The cooperation between the two energy giants can complement each other in terms of technology, and more importantly, avoid repeated development and reduce costs, Lin said.

Customers can buy cheaper gas if CNPC and Sinopec can reduce the costs of exploration and extraction by upgrading their technologies under the joint research, Lin said.

 

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Four hot dry rock reserves found in east China
Source: Xinhua| 2019-07-10 12:40:57|Editor: Yang Yi

JINAN, July 10 (Xinhua) -- Geological workers in east China's Shandong Province have found four reserves of hot dry rock, which equal about 18.8 billion tonnes of standard coal, local authorities said Wednesday.

A geological team managed to dig into the rock in the cities of Rizhao and Weihai, according to the Shandong Bureau of Coal Geology.

Covering an area of 1,500 square km, the rocks can be used in fields such as power generation, heating and oil exploitation.

Hot dry rock is a kind of geothermal energy that contains no water or steam. It is usually found 3 km to 10 km below the earth's surface, with temperatures higher than 180 degrees Celcius.

The renewable and pollution-free resource, with rich reserves and stable output, is believed to have great potential to replace fossil fuels in the future, according to the bureau.

 

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China Approves USD2.6 Billion Plan to Build Three New Coal Mines
DOU SHICONG
DATE : JUL 12 2019/SOURCE : YICAI

China Approves USD2.6 Billion Plan to Build Three New Coal Mines​

(Yicai Global) July 12 -- China's top economic planner has given the nod for three new coal mines, costing CNY18.2 billion (USD2.6 billion), to be built in the north of the country.

One will be in Shanxi province and Inner Mongolia will house the remaining two, the National Development and Reform Commission said in a statement today. Their combined production will reach 27 million tons a year and their completion will trigger the end of smaller mines in the regions.

 

[JSCh]

JULY 18, 2019 / 1:56 PM / UPDATED A DAY AGO
China Energy to expand ultra-low emission coal-fired power: executive - Reuters

SANHE, China (Reuters) - China Energy Group, the country’s biggest power generator, will add more than 6 gigawatts (GW) of new ultra-low emission coal-fired capacity this year as it bids to meet growing electricity demand, a senior official with the firm said on Thursday.

The company also expected to build another 5 GW of low-emission capacity next year, Xiao Jianying, the head of the state-run firm’s coal-fired power department, told Reuters.

“China still has quite a big demand for electricity. The government now supports regions with poor wind and solar resources to use coal-fired power ... it’s a more practical measure, as gas is still too expensive,” said Xiao.

China Energy operated coal-fired plants with a total capacity of 175 GW at the end of 2018, 77.4% of its total capacity and about 10% of the entire country’s capacity.

Xiao said the company would gradually shut down small and polluting coal-fired power units and replace them with efficient ones, noting that total capacity would continue to increase but at a slower rate of growth.

The firm is also planning to launch another carbon capture and storage (CCS) project in northwest China next year as part of its efforts to reduce the environmental impact of using coal, company officials said. It already runs a CCS plant at its coal-to-oil facility in Erdos in Inner Mongolia.

China, the world’s biggest greenhouse gas emitter, has vowed to control new coal production and new coal-fired power capacity as part of its commitments to curb pollution and tackle global warming. However, it has shown signs of relaxing restrictions in recent months amid an economic slowdown.

The National Energy Administration said last month it would encourage regions to choose the most accessible form of energy to guarantee heating during winter. It also offered support for cities to build centralized “clean coal” heating systems.

This was a big shift from two winters ago when authorities forced millions of northern households to convert from coal to natural gas or electricity in a bid to curb smog.

China aims to bring greenhouse gas emissions to a peak by “around 2030” and raise the share of non-fossil fuels in its total energy mix to 20% by the end of the next decade, up from 15% in 2020. Those targets could be strengthened next year.

But it has been under fire for allowing large numbers of new coal-fired power plants. An academic study published in March said China restarted construction on more than 50 GW of suspended coal power plants last year.

China Energy also has ambitions to export more of its low emission coal-fired power technology. Officials said the company planned more investments in Indonesia, and was also studying proposals to build a coal-fired plant in Greece.

China uses ultra-low emissions technology at about 80% of its total coal-fired capacity. The technology cuts smog particles down to a minimum, but does little to curb climate-warming carbon emissions.

Reporting by Muyu Xu and David Stanway; editing by Richard Pullin

 

[JSCh]

UAE and China sign strategic oil and gas agreement | Gulf Business
China is the world’s largest oil importer, with the UAE one of its key suppliers

The Abu Dhabi National Oil Company (ADNOC) and the China National Offshore Oil Corporation (CNOOC) have signed an agreement to explore opportunities and share knowledge and expertise in upstream and downstream sectors and in liquefied natural gas (LNG).

The deal was signed in the presence of Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and China’s President Xi Jinping.

Read: In pics: Sheikh Mohamed bin Zayed meets Chinese President Xi Jinping in Beijing

The agreement is of significance given that ADNOC plans to increase its production to five million barrels per day by 2030.

China, on the other hand, is the world’s largest oil importer, with the UAE being one of its key suppliers.

By way of the agreement, China’s Offshore Oil Engineering Company (COOEC) and China Oilfield Services will be considered for potential collaboration on offshore and oil and gas field assets in Abu Dhabi.

ADNOC and CNOOC will also explore collaborating on new integrated refining and petrochemical assets in China in the downstream sector and also cooperate in CNOOC’s existing refining assets.

Demand for petrochemicals and plastics in the downstream sector of China and Asia is expected to double by 2040.

The two companies will also jointly explore investment opportunities across the entire LNG value chain.

Sultan Ahmed Al Jaber, UAE’s minister of State and ADNOC group CEO said: “The future collaboration opportunities agreed today with CNOOC reinforce ADNOC’s strategic approach to partners that offer technology, capital or market access to maximise value from Abu Dhabi’s vast oil and gas resources.

“In addition, the collaboration opportunities underpin our 2030 smart growth strategy as well as our focus on key economies and Asian growth markets such as China.”

Yang Hua, chairman of CNOOC said: “CNOOC will continue to implement the Belt and Road Initiative, strengthen energy cooperation and contribute more value to the China-Arab friendship as well as regional development.”

The Abu Dhabi Crown Prince is on a three-day state visit to China. Also on the sidelines of the visit, earlier today, Dubai’s Emaar Properties signed an agreement with Beijing Daxing International Airport to implement an $11bn project that includes residential and leisure facilities.

 

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8,882 meters! PetroChina drills Asia's deepest oil well on land
Source: Xinhua| 2019-07-25 14:28:29|Editor: Liangyu

URUMQI, July 25 (Xinhua) -- The Tarim oilfield branch of PetroChina, China's largest oil and gas producer, said Thursday that it has completed drilling the deepest oil well on land in Asia.

The Luntan One well, with a current depth of 8,882 meters, smashed the previous record of 8,588 meters set by Sinopec in February 2019, according to the PetroChina Tarim Oilfield Company.

The company said the well demonstrates that its ultra-deep well drilling technology has reached world-leading levels.

Cai Zhenzhong, head of the company's resource exploration department, said they started to drill the well last June and has overcome the difficulties posed by ultra-high-temperature and ultra-high-pressure conditions.

"We've basically drilled Mt. Everest (Mt. Qomolangma), just underground," said Qiu Bin, manager of the company's exploration division.

Tarim Basin is the largest petroliferous basin in China and one of the most difficult to explore due to its harsh ground environment and complicated underground conditions.

 

[JSCh]

Turning from 'black gold' to green profits
By REN XIAOJIN/SUN RUISHENG | China Daily | Updated: 2019-07-26 09:04

Aerial view of a solar power farm in Datong, Shanxi province. The province leads the country in solar power generation. [Photo/IC]

Shanxi has prospered from its coal mining industry, but now it's redefining itself as a high-end manufacturing hub

Editor's Note: As the People's Republic of China prepares to celebrate its 70th anniversary on Oct 1, China Daily is featuring a series of stories on the role regions have played in the country's development and where they are today.

Made prosperous by the "black gold" of its coal industry, Shanxi is now on the fast track to transforming itself into a tech-driven innovation province for high-end manufacturing, green energy and premium chemical products.

In the busy factory of Jinmei Huayu Coal Chemical in Jincheng, 2.2 million metric tons of high-sulfur coal are turned into 1.2 million tons of methane, 500,000 tons of clean energy and multiple chemical products every year by the 300 employees.

Shi Wenfeng, the plant's chief dispatcher, said the factory began operations in August last year and by February had earned 660 million yuan ($95.9 million) in revenue.

"The exciting thing is that the project is earning profits already," Shi said.

In Changzhi city, a new production plant owned by the leading coal company Lu'an Mining Group has been running at full capacity since September.

According to the company's profile, in the first phase of the "180 Project" plant alone, 12,000 tons of coal a day was turned into value-added chemical products.

The 180 Project was designed to produce 1.8 million tons of oil products from high-sulfur coal every year. Currently it can produce about 1 million tons a year.

One of the products it makes is synthetic oil that can be used to make high-quality synthetic lubricants. Only foreign companies were able to produce such lubricants in the past, said Liu Junyi, general manager of Lu'an Mining Group, adding that many Chinese companies are making forays into producing coal-based chemicals.

The retail price per ton of the oil they produce to make the synthetic lubricant is 50 times that of the raw material, high-sulfur coal. Lu'an Mining Group estimates 40 billion tons of coal underground can be turned into the value-added, environmentally friendly commodity.

The company said the oil product initially produced at the plant was limited in scope and used mainly in base products.

But new production lines have been added and the company is now able to make 54 kinds of high-end chemical products.

Coal is not only a source for specialized oil products, but also a more economical way to produce hydrogen through a process called gasification.

Feng Zhiwu, chairman at Yangmei Chemical, a Shanxi-based company, said that hydrogen made from coal has been one of their most profitable products, compared with traditional ones such as ammonia and urea.

"There are a number of ways to produce hydrogen, such as from oil, water and coal, but the cheapest is from coal," Feng said.

"For every cubic meter of hydrogen made from oil, the cost is about 1.6 yuan to 1.7 yuan, but even when the price of coal goes up, the cost can be as low as 0.9 yuan."

Feng said the company makes a profit of 0.3 yuan on every cu m of hydrogen sold.

These success stories are indicative of Shanxi turning its traditional coal businesses into cleaner, greener and more profitable industries.

According to the Shanxi government work report this year, overcapacity of coal production was cut by 30.9 million tons last year. Over the past three years, the province has reduced overcapacity by a total of 88.4 million tons.

While coal production has fallen, optimization of the coal industry has risen, with more than 20 coal-based industrial parks established in Shanxi in recent years.

"Clean and renewable energy plays a leading role in meeting China's growing demand for energy," said Han Wenke, director of the Energy Research Institute at the National Development and Reform Commission.

"Green production and efficient use of coal will facilitate the country's industrial upgrade for overall green economic growth."

Han said China will see a drastic decline in coal consumption after 2020. Coal is expected to make up less than 50 percent of total energy consumption in 2030, and 30 percent in 2050.

Han Dong'e, a researcher at the Shanxi Academy of Social Sciences, said in recent years the province had been reducing its dependency on coal.

"Shanxi is the energy base of China with the country's second largest coal production capacity, which has powered national economic growth, but also brought the structural problem of being over dependent on coal," Han said.

"Shanxi has been very clear with its goal to lower its annual production of coal to 1 billion tons by 2020."

Han said under the targets, the main objective will be to increase the supply of high-quality coal.

While optimizing its traditional coal sector, Shanxi is also vowing to turn itself into a high-end manufacturing base.

According to the provincial statistics bureau, last year Shanxi's GDP hit 1.68 trillion yuan, up 6.7 percent year-on-year. Among the industries with yearly revenue over 20 million yuan, the coal industry saw only a 0.3 percent growth while the manufacturing sector went up 9.2 percent.

Overall, the manufacturing sector contributed 76.4 percent of Shanxi's industrial growth.

Early this year, the provincial department of industry and information technology said Shanxi will accelerate the development of industries, including railway transportation, new energy vehicles, biopharmaceuticals and modern coal industries.

According to the department's 2019 action plan, the province will build an industrial park and clusters for emerging industries. This includes turning Taiyuan and Datong into transportation equipment manufacturing hubs, and Taiyuan, Datong, Changzhi and Yuncheng into automobile manufacturing bases.