XI'AN, China, Oct. 1, 2012 /PRNewswire-FirstCall/ -- China Recycling Energy Corp. (NASDAQ: CREG; "CREG" or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced that the ongoing construction of its previously announced Shanxi Datong Coal Group Steel Ltd. Energy Recovery Project ("Shanxi Datong Project") is progressing according to schedule. The Company expects Shanxi Datong Project, which has 23MW of total power generation capacity, will be completed by end of 2012.
As previously announced, Xi'an TCH Energy Technology Company, a wholly owned subsidiary of China Recycling Energy Corp., signed a definite agreement with Shanxi Datong Coal Group Steel Ltd. to co-develop the Shanxi Datong Project which recycles gas and steam from groups of blast-furnaces and converter of Shanxi Datong's metal refining plants to generate power. According to the agreement, China Recycling Energy will install two 3MW Top Gas Recovery Turbine (TRT) unites, one 15MW Waste Gas Power Generation (WGPG) system and two 1MW steam power generation systems. The total investment for the project is estimated to be approximately $27.45 million ( RMB 180 million), and it will generate up to 23MW of electricity annually. After all construction completed at the end of 2012, the facility will be leased back to Datong Coal Group Steel Ltd. for 30 years, and Datong will be responsible for operating the facility and pay service fee to CREG during the lease term. The service fee is based on an average of 8,000 electricity-generating hours per year and $0.05 (RMB 0.33) per kilowatt hour ("Kwh") for the first 5 years after the completion of each power generation station. For each of the leases, at the 6th year, 11th year and 21st year thereafter, the rate will be RMB 0.3 Kwh, 0.27 Kwh and 0.25 Kwh, respectively. This project is a Build and Operate (BO) project, the operation period is permanent.
Total payback period of the project is 5 years. The project is progressing smoothly at present, and it will complete by the end of 2012.