Complimentary Strengths Help Chinese and Foreign Peers Grow Together
- An Interview with Mr. Paul Hanrahan, AES' President & CEO

Do you have military education background?
I graduated from the US Naval Academy and Harvard Business School.

What is your most special career experience?
I was a commander on the US Navy fast attack submarine USS Parche.

What is your advice for young people?
To find a job, learn Chinese first.

In what country’s offices do you often recommend AES' young employees to work?
Strive for a job in China, otherwise you will fall behind.

Where did you gain your impression of China?
I once lived in Beijing for 2 ~3 years.

AES is one of largest independent power companies in the world, operating power projects in nearly 30 countries with over 30,000 employees and providing power for about 100 million people worldwide. Recently Mr. Paul Hanrahan, AES’ President & CEO, made a visit to China and received our interview.

Hello Mr. Paul Hanrahan, could you please share AES’ development of recent years in China?
I’m very pleased to answer this question. AES entered China in the early 1990s, starting from its core business – coal-fired and hydraulic power projects. Since then we have successfully implemented 8 power projects in 7 provinces and municipalities of China. Currently we are operating 7 power projects, plus one under construction, in China, with a total capacity of 2.8 MKW. Moreover, we are the only foreign investor in all these power projects.

In recent years we also saw the opportunity to further expand our business. This is why we moved to a new office and built up our team, and we need to be prepared for the company’s future development. Now the structure of AES China is similar with that of AES’ headquarters. In addition to our core power team, AES China also has dedicated teams for clean energy, carbon emission reduction, CMD(Clean Development Mechanism) etc, as well as special teams for project design and construction. Moreover, we also have special personnel who are considering participating in other infrastructure projects.

What do you think of China’s current power market? How can AES be integrated into China’s market successfully and stand firm here?
The power market conditions have changed now in China. On the one hand, China has enough funds, on the other, China has five power groups. In addition, many strong power companies and investment companies are operating power projects in China. However, this is not to say that China doesn’t need foreign investors. In fact, foreign investors are now required to have both funds and skills or technologies. Only in this way can investors become a force needed by China. For AES itself, it has power projects in over ten countries, as well as its own management experience, management mode and values, and China needs all these to a certain extent.

Additionally, AES' presence in over ten counties is also needed by Chinese partners and companies. They want to depend on AES to meet the demands of local and overseas development.

Because of the snow disaster occurred in South China not long ago, many power plants in the region were short of coal supply. How did you deal with that situation?
Our coal-fired plants didn’t suffer in terms of coal transportation. Most of our coal-fired power plants are located at places near the mine pit-mouth or close to the coal source. In addition, we had a certain amount of coal reserves, so the shortage of coal supply didn’t affect us greatly.

It often happens that coal transportation is blocked by bad weather. This true in other countries, such as the US and Canada. In the US, the coal is supplied from western regions and needs to be transported by rail to the power plants in eastern regions, and the sudden climate change creates a bottleneck that often causes coal transportation to restrict stable production from power plants.

Given this situation, we should consider diverse energies and sources in addition to solving the issues relative to railway transportation and using multiple methods of coal storage. For example, is it possible for us to use imported coal? We believe that the Chinese government has done so. Additionally, we can use other clean energies or build nuclear stations. In short, the diversity of fuels can somewhat relieve the issues such as coal transportation and supply you just mentioned.

Could you share your perspectives on clean energy development and energy-efficient/environment-friendly industries?
With economic development, many countries including Germany, Italy, Spain, the US and China began to provide some favorable policies to encourage development of clean energy. As the price of traditional energies increases and new technologies and investment for clean energy expand, the situation where new energies have a high cost and price will change.

The US, China and India are the countries that will consume a great deal of coal in the future. AES, and other related organizations and companies, especially AES itself, will make more efforts in this regard to make their contributions for global warming relief by reducing carbon emissions.

My last question, could you please share your current progress on investment and cooperation in China?
AES also invests in coal projects, and we have coal-fired power projects in India, Kazakhstan, Hungary etc. We are interested in Coal-Power Integration projects in China. Speaking of our partners, we have good cooperative relationships with Datang Group, Shangxi International Power, Jiansu Guoxin for our project in Yangcheng city, Shanxi province; and we also partner with China Power International for the project in Wuhu, Anhui province.

In addition, we enjoy good relations with some design, manufacturing and construction organizations in China. We use and are satisfied with the power equipment manufactured by China’s major manufacturers. We also have contacts with Chinese power design organizations, such as China Power Engineering Consulting Group Corporation. AES has a hydraulic power project in Turkey, and China has rich experience in hydraulic power projects. We also get along well with China’s hydraulic power design organizations. For our only wind power project that is under construction, our partner is Guohua Energy Investment Company, a subsidiary of Shenhua Group, with whom we also have good relations with them.

Additionally, we are also looking for partners for our overseas projects, including China State Grid Company, and we hope to build relationships with new and old partners and friends who are willing to work with us. Meanwhile we also hope to further grow our partnerships in the coming five or ten years.