Swiss engineering group ABB Ltd has won contracts worth $440 million from the State Grid Corporation of China (SGCC) to build the world's longest power link, running 2,000 kilometres across the country.
The power line will cross from western China to the highly-industrialised coastal area in the east, ABB said, adding that it would have the capacity to meet the needs of about 31 million people based on per head consumption.
The contract is part of China's $25 billion plan to build an ultra-high voltage (UHV) electricity net by 2020, employing a form of power transmission that has existed for decades but has been little used outside of Japan and the former Soviet Union.
ABB shares rose 1.5 percent to 31.42 Swiss francs by 1207 GMT, amid generally positive sentiment about the deal. "ABB has gained large orders from China worth a total of $440 million which is positive and, in view of recent weakness, should lend some support to the stock," equity analysts at bank Vontobel said in a note.
The link will join the Xiangjiaba hydropower plant to Shanghai and is scheduled for completion in 2011. As well as being the longest transmission line in the world, the link will also operate at twice the capacity of any facility in operation today, an advance that ABB says represents the biggest leap in capacity and efficiency in 20 years.
By increasing the voltage to 800 kilovolts, a minimum of power will be lost in transmission, ABB said, a boon in a country like China where resources are unevenly distributed across a large landmass.
Nearly 80 percent of China's water resources are in the south-west, and two-thirds of coal is in three north-western provinces, whereas demand centres are in the centre and east. Conventional high-voltage power lines operate at around 500 kilovolts. China is anxious to fix a grid that is rickety and fragmented after years of under-investment, and had fast-tracked the UHV scheme.
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