AVIC draws up plan for UK solar plants

Efforts seen as laying the foundation for renewable energy drive through Europe

A unit of Aviation Industry Corp of China will build an unspecified number of solar power plants in Britain, generating a total of 300 megawatts, a top company official said.

The announcement comes after the sale this year of its first UK project to Foresight Solar Fund Ltd, a British independent infrastructure and private equity investment manager.

AVIC International Holding Corp would like to invest more in the industry, its Executive Vice-President Pan Linwu, told China Daily in London.

We mostly "built the solar plant using our own technology, materials and components," Pan said. "The success of this project is a good foundation to our investment in renewable energy in the UK and maybe other European countries. It also helped us to get to know the UK's renewable industry."

The 12 mw farm, about 112 km northeast of London near Saffron Walden, Essex, was linked to the national grid in March. Development and construction took over a year and AVIC paid 13 million pounds ($21.86 million) for the land. It is the biggest project of its type undertaken in the country by a Chinese firm.

The 48-hectare Essex plant generates 30,000 kilowatt-hours daily in summer and supplies electricity to 2,500 households, equivalent to burning 23 tons of coal daily.

"Next month, we will set up three new solar plants, which will generate a total of 25 megawatts in the UK," the general manager of AVIC's UK unit, Lou Yucheng said. "We will use the same format as the first one. If it succeeds, we will launch another 50-mw solar project soon."

State-owned and Beijing-headquartered, AVIC International Holding Corp was established in 1979 in China's initial wave of reforms and opening-up of policy. It had 150 billion yuan ($23.9 billion) in revenue last year. More than 60,000 people work for the company, including those at 400 subsidiaries in more than 180 countries.

It has interests in international civil aviation, trade and logistics, retail and high-end consumables, real estate and hotel management, electronics manufacturing and natural resource development. Diversifying is strategically important for some large State-owned enterprises, according to analysts.

One reason AVIC entered the renewables industry was Premier Li Keqiang's declaration of "war" on smog at home with a commitment to shut coal-fired power plants and increase clean-energy production.

"We're entering a new century and a new era," Pan said. "People are facing a global warming threat and we need to work together to protect our beautiful nature and environment. As a State-owned company, we take more responsibilities."

Britain is a more attractive investment destination for the solar industry than most other European countries as the government better subsidizes the sector, Lou said.

The UK's largest solar power station is in the central county of Leicestershire and has a capacity of 33 mw.

The British government plans to increase the total installed generating capacity to 20 gigawatts by 2020, leading to suggestions that there will be a major spike in activity in the solar market.

Last year, 25 percent of AVIC's revenue came from overseas markets, and the goal is to raise that to 50 percent, Pan said.

"We are seeking to give solutions to renewable energy and energy efficiency for UK, China and across the world," he said.

AVIC International has signed a preliminary agreement with London-based Sustainable Development Capital LLP as part of the UK-China energy efficiency investment fund. The two want to bring the best international technologies and services to China, complemented by Chinese expertise.

"China's industrial base and also its retail, commercial and healthcare assets offer an enormous opportunity for energy savings," SDC CEO Jonathan Maxwell said. "Our collaboration with AVIC is a potentially transformative opportunity to partner with a major Chinese company and the Chinese government to address one of the fastest-growing sectors of the world energy markets."