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China's first biomass-fired power plant, with an installed generating capacity of 25,000 kilowatts, went into commercial operation in east China's Shandong Province on Friday.

Located in Shanxian County, the 300-million-yuan (35.7 million U.S. dollars) plant burns 150,000 to 200,000 tons of cotton stalks, tree branches, orchard and forestry waste annually.

It can generate 160 million kilowatt-hours of electricity a year, saving the equivalent of 400,000 tons of coal. Local farmers and biomass enterprises can earn about 40 million yuan from the project each year.

The amount of carbon dioxide produced by a 25,000-kilowatt biomass-fired power plant annually is 100,000 tons less than than that discharged by a thermal power plant with the same capacity. The ash of the burned biomass is high quality potash fertilizer.

The Chinese government has attached great importance to the development of clean energy projects in recent years, including wind power and solar power and biomass-fired power plants.

The government has approved the construction of over 30 biomass power plants, some which are under construction and some will begin construction by the end of the year.

The Shanxian plant is funded by the National Bio Energy Co., Ltd., a subsidiary of the State Grid Corporation of China, which is in charge of the power grid covering northern China, or the areas to the north of the Yangtze River.

State Grid has been given the green light by the government to build 22 biomass power plants, including 15 with a combined installed capacity of 350,000 kilowatts that are under construction.

Established last October with a registered capital of one billion yuan, the National Bio Energy Co., Ltd. is mainly engaged in the development of bioelectricity.

Insiders say the Shanxian plant plays a pilot role in developing China's bioelectricity.

(For more biz stories, please visit Industry Updates)