China to build 3000 MW Three Gorges link

China has signed $423m worth of deals for equipment for the massive Three Gorges hydro-power station. Chinese officials stated the deals signalled that the controversial project was moving full speed ahead.

The bulk of the order went to ABB. Under a $340m contract, the company will supply converter stations for a 3000 MW HVDC link to transmit power from the station to the coastal city of Shanghai some 850 km away. The link will be the longest in China and is scheduled to begin commercial operation in 2003.

One converter station will be located in Longquan, approximately 50 km from Three Gorges, and the other in the city of Changzhou, 80 km northwest of Shanghai. Siemens will provide the transformer for the station in Changzhou under a $82.3m contract. According to reports, this includes $3.7m for technology transfer and manufacturing costs.

The announcement marked the second major batch of foreign equipment ordered for the project, following the $740m worth of equipment contracted in 1997. Some $100m of the latest order is being financed through export credit and also foreign commercial loans.

The Three Gorges link will more than triple the amount of power currently delivered from central China to the coast – from 1200 MW to 4200 MW.

ABB sources have indicated significant changes in the climate surrounding the project over the last 12 months, and phase 2 of the project may turn out to be more difficult to achieve. The company developing the $24.5bn dam has admitted that the second phase funding in particular could be problematic.

The TGD development company has said that it has secured only $6.6bn out of the $9.9bn required to complete phase 2. It plans to borrow $1.3bn from Chinese banks, have recourse to local capital markets and borrow $400m from abroad.