China’s second-largest listed electricity producer, Datang International Power, plans to invest 18 billion yuan (US$2.4 billion) to develop an integrated gasification combined cycle (IGCC) CHP plant in Shenyang in China’s north eastern Liaoning province, reports China Power & Energy News.

The 1600 MWe project, which will simultaneously produce electricity, steam, methanol and other chemical by-products, will be the largest power-related undertaking in the city. It will be located in the Chemical Industry Park of Xihe Economy Zone in Shenyang, and is scheduled to become operational by the fourth quarter of 2009.

Four power generators with a capacity of 400 MW each are to be installed in the power plant. The first stage of the project can provide 1100 tonnes per hour of steam, supplying heat energy for the chemical park. Steam from the CHP plant will be supplied to the nearby Shenyang Rubber Industrial Park and Northeast Pharmaceutical Group, while methanol and other chemical products are to be supplied to various gas enterprises. The CHP plant will also provide electricity to the power grid in Liaoning to help meet increasing demand for electricity.

Meanwhile, China’s central government has unveiled new rules that give ‘green’ electricity sales a priority to encourage its generation. Up to now, power purchase volumes from power plants have been dictated by the nation’s power distribution duopoly without taking into account a power plant’s energy efficiency and pollution characteristics.

Under the new rules, power volume will be prioritised according to a power plant’s energy consumption efficiency and pollution level, according to a circular released by the National Development and Reform Commission, the State Environmental Protection Administration, the State Electricity Regulatory Commission and the Office of the National Energy Leading Group. No effective date was given.

Top priority will be given to wind, solar, tidal and hydro, biomass, geothermal power and power from waste projects. These will be followed by nuclear, coal-fired cogeneration projects and those involving natural gas and coal-bed methane.