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Published on : Apr 16, 2015

The strategy of China called Go west has encouraged coastal to inland flow of money and people. It will result in the formation of a new superhighway commodity.

This superhighway in China will also impact the energy trade flows in the country and also externally through the new Silk Road routes that are connected to the country’s east to west and onwards to the Central Asia and beyond it.

This commodity superhighway is going to represent a substantial number of market opportunities and it will have three implications.

The first implication will be that the power generation in the western and central regions will almost triple from around 3200 TWh in the year 2015 and around 9600 TWh in the year 2035. These will far surpass the coastal regions generation growth during the same period. It is only set to grow from a capacity of 3000 TWh to around 6000 TWh.

Another implication of this superhighway in China will be that the coastal regions will become more depended on the country’s west to meet its demand for energy. Presently, the west has an abundant amount of supply of energy and it contributes to around 65 per cent of the country’s marketable gas and coal reserves. Since, coal is the dominating fuel the coal fueled power plants in the western and central provinces will produce more power to provide the demand heavy centers along the coat via the long distance power transmission grids.

Another implication will be that the planned transport infrastructure will eventually open up new markets in the Central region and allow energy imports in the country via its west border.