In one of the worst polluted areas of the world, Shaanxi district needs to find alternatives to burning coal. Under the new joint venture between Shaanxi Geothermal Energy Development and Enex China, Shaanxi Green Energy will contribute to keep Chinese households warm and develop pollution-free and sustainable energy sources. The first phase of the project now completed, was the construction and operation of the geothermal district heating system, which services three colleges in the city of Xian Yang, consisting of a total of 170,000 square meters that until now burned fossil fuels for heating. The next phase, a 47 million euro investment, is a substantial expansion of the district heating system to include a new residential area in Xian Yang, a city of 5 million inhabitants. The project is recognized to have the potential to become the largest of its kind in the world.

Xian Yang, which last year was named the "geothermal city of China" has an abundance of geothermal energy, but is still in its infancy in terms of technology and size of heated areas. In one of the most polluted cities in the world, coal burning is the main source of heat. Hopefully reliance on coal will subside, as the first phase of the project not only brought clean energy to the region, but also innovative technolgoies to increase efficiency. Technologies unique to this project include its use of connected geothermal wells to a heat central at the production site. The geothermal project is the only example of this in the area and its energy is not only used for house heating, but also for domestic hot water.

The first phase of operations has brought geothermal energy to three Colleges in the eastern area of Xian Yang and thereby replacing coal boilers. The three Colleges had been using approxiametly 6,000 MT of coal per heating season. The total area of buildings heaters is 170,000 square meters, which already substantial is only a small comparison to the project goals.

The new geothermal plant will implement technologies around the world. Orkuveita Reykjavikur, an independent utility company owned by the city of Reykjavik, currently runs one of the world?s largest geothermal district heating systems. China?s considerable potential in geothermal energy is only beginning to be tapped and the Shaanxi district is the center for such development. Shaanxi Green Energy will be advised by Orkuveita Reykjavikur, which for 70 years has pioneered the utilization of this natural and clean energy source. Geothermal has significant implications not only for China?s energy policy, but also worldwide.

The effects are benefical and will help broaden the use and acceptance of geothermal energy. The Feng He is a new area that will be developed, as the Xian Yang city government has already given Shaanxi Green exclusive rights to about 15 square km for geothermal development. According to the city's plan, these 15 square km will have at least 5 million square meters of heated housing by 2012.

It is the intention of Shannxi Green and its owners to build a state of the art sustainabe system. This is displayed by trials and studies on reinjection of geothermal liquid, which is extrmeley important considering the geology of the area and ensuring the sustainability of the system.

In order to expand beyond a heavy reliance on coal, outside investment is required. Shaanxi Green Energy has the backing several Icelandic/Nordic companies including financier Glitnir and Orkuveita Reykjavikur