Shaanxi Green Energy launching second geothermal district heating project in China

In a release by the company, “Enex China announces that Shaanxi Green Energy (SGE), a JV enterprise between Enex China and Chinese oil giant Sinopec Star, has signed an agreement with Xiong County, Hebei Province, China, launching a new geothermal district heating (DH) development project.

The DH system will provide heating for 250,000 square meters this year and up to 3 million square meters by 2012 in Xiong County. Enex China is held by Geysir Green Energy (75%) and fellow Icelandic geothermal company Reykjavik Energy Invest (25%).

The new geothermal DH system, scheduled to commence operation November 15th of this year, will initially be installed in Xiong County, Baoding city in Hebei province near Beijing. The installation of the Xiong County geothermal DH system is well underway and will heat 250,000-300,000 square meters of housing by the end of this year and is going to reach a million square meters by the end of next year.

The project is built and operated by the Hebei Branch Office of Shaanxi Green Energy (SGE), which will be changed into an independent subsidiary of SGE shortly, and will serve as a foundation for geothermal development in the administrative territory of Xiong County that is to reach up to 3 million square meters by 2012. Xiong County, with a population of 354,000, has low-temperature geothermal fields with water temperature ranging from 55-86°C at a well depth of 500-1,500 meters.

The new geothermal DH system will help improve the county’s air quality since heating would otherwise come from coal fired heat centrals. By reducing the county’s dependence on coal heating and reducing carbon dioxide emissions the operation can generate CER (Carbon Credits) that strengthens the economical viability of the project.

The official signing ceremony of the cooperation agreement between SGE and Xiong County took place on October 28th in Xiong County. Iceland’s Ambassador in China, Mr. Gunnar Snorri Gunnarsson, along with officials from Baoding Municipality and Xiong County, Hebei Province and executives from Sinopec Star, Enex China, Reykjavik Energy and Geysir Green Energy took part in the signing ceremony.

“We are very pleased with this agreement and the positive precedent Xiong county officials have shown to improve the county’s environment. This project paves the way for more geothermal projects in Hebei and other provinces for SGE in China”, commented Asgeir Margeirsson, Chairman of Enex China and CEO of Geysir Green Energy.

“This landmark development in Xiong County is the 2nd project our JV has launched, which proves the strength and determination that both shareholders (Enex China and Sinopec) are committed to moving forward geothermal utilization throughout China at full speed”, commented Jiang Zhu, Managing Director of Geysir Green Energy in Greater China region.

SGE is a joint venture between Chinese oil giant Sinopec Star (51%) and Enex China (49%), established to build and develop geothermal heating systems in China. This is SGE’s second project in China, which also operates a geothermal district heating system providing heating for 1.2 million square meters in Xianyang city (100 MWth) since 2006. The use of geothermal energy instead of coal for heating in Xianyang is reducing carbon dioxide emissions by more than 48,000 tons annually. Enex China began working as a geothermal consultant with Chinese municipalities in 2002 and established an office in China in 2005, when cooperation began on the Xianyang project in Shaanxi Province.”

Source: Company release