Hydropower: A Viable Solution for China's Energy Future?

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After years of short supply, China achieved a balance in its electricity production and consumption in mid-2006. The relief, however, is temporary. Concerns over supply remain high as the booming economy leads to ever-higher demand, while capacity is insufficient with limited or dwindling energy resources.

With an energy strategy emphasizing self-reliance, China will continue to embrace coal as its dominant energy source for decades to come. But its share in the nation’s total energy consumption is expected to shrink. The vacancy will be filled by hydropower and nuclear power, as well as wind and solar energy. For at least the next two decades, however, the latter are not expected to be large players because of issues of scale and capacity.

The Chinese government is prioritizing hydropower in the country’s new energy agenda because the technology is mature and China has relatively rich experience in this area, along with a fairly well developed domestic industry. The country is also blessed with large reserves of this clean and renewable energy source. Official figures estimate China’s exploitable water power resource at more than 500 million kilowatts (kW). Installed capacity by the end of 2005 was 117 million kW, or about 24 percent of the potential. The central government wishes to boost the capacity to 180 million kW by year 2010 and 300 million kW in 2020.

As with its coal reserves, China’s powerful water resources are concentrated mainly in the largely underdeveloped west, at the upper- and mid-reaches of large rivers. The three provincial regions of Sichuan, Tibet, and Yunnan account for more than two thirds of the nation’s water power resources. Meanwhile, the bulk of China’s primary energy demand (also about two-thirds) lies in the coastal areas of the east.

In the past, coal was transported—and electricity transmitted via conventional power lines—from the west to the east, resulting in significant energy losses en route as well as transportation pressures and pollution. While the west-to-east flow of energy is still a necessity, today only the transmission of electricity is encouraged, with the use of ultra-high-voltage power lines. As much as possible, the coal itself is to be burned near where it is mined to generate electricity. 

The rebirth of hydro

China’s hydropower development peaked in the 1980s and then slowed after influential figures in the power sector concluded that it was not a sound option, requiring heavy investments and long construction periods compared with coal. As a result, hydro’s share in China’s total energy generation capacity dropped from 32 percent in 1984 to 19.2 percent in 1996. Over this period, total hydro output slipped from 23 percent to 17.3 percent.

Today, however, proponents of hydropower appear to be gaining the upper hand, contending that the high cost and long building periods are related to the multi-functional nature of hydro facilities. They argue that the costs are in fact low if calculated on an overall and long-term basis. Since water is free and renewable, the operation of a hydro facility normally costs only half that of a coal-burning facility.

China’s hydropower workforce is fairly strong in the areas of design, construction, and equipment manufacturing. “There’s no technology barrier. China is capable of independently undertaking hydro projects of any technology or scale,” an expert noted at an international forum on hydro development and environmental protection in Beijing last November. This confidence also extends to the nation’s ultra-high-voltage power transmission lines. In August 2006, State Power Grid launched a 1,000-kilovolt UHVAC line for demonstration, which travels 650 kilometers from Shanxi to Hebei. A second 1,438-kilometer, 800-kilovolt UHVDC line, developed by Southern Power Grid, links Yunnan to Guangdong.  

With this upgrading of the power grid, the Chinese government is launching or announcing projects of an impressive scale in the nation’s west. The Xiluodu and Xiangjiaba facilities, located on the upper reaches of the Yangtze River at Jinshajiang, together represent 18.6 million kW in capacity, more than the Three Gorges hydro station, the world’s largest. Electricity generated by the two facilities will supply central and eastern China, up to 2,000 kilometers away. Two other projects are in pipeline for the same region; combined, the four facilities represent 38 million kW of power.

Efforts have also been launched on the upper reaches of the Yangtze for the 8 million kW Jinping Phase-I station. And two other stations at Yalongjiang, as well as several other projects representing a total of 3.3 million kW at Daduhe, are being processed.

Government-sponsored prospecting and evaluation work has resulted in the identification of 13 large hydropower bases across China. Together, these account for 67 percent of the nation’s total economically exploitable water resource. Nearly all of the sites are located in the west, with the exception of one in northeast China. The largest of the sites is the 3,464-kilometer Jinshajiang River, accounting for 16.7 percent of the national total hydro resource and allowing for a possible 90 million kW of installations, according to official sources.

Ongoing controversy, but big possibilities

The development of hydropower remains controversial. Today, the concern arises largely from the public and centers on issues of the environment, security, and social impact. Large hydro facilities, critics say, worsen the living conditions of aquatic species, damage vegetative cover, and affect the local climate, as well as being easy targets for military attacks. Projects in problematic geological locations are at a high risk for disasters. And forced human displacement can lead to further impoverishment of socially vulnerable populations, rather than raising their standards of living. 

Critics of hydropower frequently cite the lessons learned from other countries, while proponents tend to advocate cautious planning rather than the abandonment of hydropower development. In reality, many countries around the world have prioritized water-based energy. The rate of hydropower exploitation in the United States is 82 percent, Japan 84 percent, France more than 80 percent, and Germany 73 percent. When China attains its desired goal in 2020, the rate would be around 70 percent.

A hydro facility can be more than just an answer to energy demands. If developed well, it can help with water conservation, irrigation, and flood control. Its impact on the environment could be positive, as the reservoir and associated wetland help improve regional climate and ecosystems. And the clean energy generated every year offers a valuable alternative to emitting large quantities of carbon and sulfur dioxides, as well as alleviating the problem of acid rain.

If not handled properly, proponents concede, a hydro project could pose problems. But damage to the environment and other concerns could be minimized if the preparatory and construction work is done well. Environment impact assessments (EIA) are now considered a must for any project. Experts say they should be undertaken in the early stages and at the strategic level, taking into account the entire ecosystem of the related region. In the planning stage, attention must be paid to such issues as biodiversity and vegetative cover, and during construction, care should be taken in waste disposal, the unearthing of cultural relics, and disease control. The government should intensify monitoring and supervision of hydro projects, experts say.

The compulsory relocation of residents would be less of a problem if a good policy, comprising proper planning and reasonable compensation standards, were carried out properly, with funds committed in a timely manner and distributed in full. This assistance to relocated peoples should continue after the move and be designed to “teach individuals how to fish rather than just giving them fish.” The State Council, China’s parliament, acknowledged this when it approved a measure by the Three Gorges Project Corporation to set aside a fraction of the income from electricity generation to establish funds dedicated to this purpose.

Relocation problems often stem from mishandling or corruption, not insufficient policies. The National Audit Office recently revealed that officials in charge of the Three Gorges project mishandled a total of 272 million yuan (roughly US $35 million) of relocation funds. Such outcomes, while difficult to eliminate under China’s current political situation, are not inherent in a hydro project and could be avoided if appropriate steps are taken.

Small hydro’s contribution

Statistics show that by the end of 2006, China had 40,000 small hydropower stations of under 50,000 kW in capacity. Combined, they represent 40 million kW, or more than two Three Gorges stations put together. These small facilities frequently come under attack as well, for more or less the same reasons as those mentioned above. Small projects are usually approved by local governments, and many have adhered less strictly to environment impact requirements, resulting in problems such as the drying up of waterways, damage to vegetation, flooding, and soil erosion.

Proponents argue that such problems could be solved by improving regulatory and management efforts. They stress the merits of small hydro, including the low cost, rapid effectiveness, lack of dependence on the grid, and little need for people relocation. Official figures show that China’s existing small hydro facilities benefit more than 300 million rural people residing chiefly in economically underdeveloped areas.

Ongoing debates over China’s hydro development focus mainly on environmental concerns. EIAs could be effective, experts say, yet unfortunately have been frequently neglected, even after China’s national EIA law came into force in September 2003.

It is apparent that the State Environmental Protection Administration (SEPA) lacks sufficient enforcement authority. And local environmental agencies normally listen to local officials and cannot be trusted to be the “gatekeepers” of environmental protection. SEPA has stepped up efforts in recent years, and in early 2005 it suspended a host of projects that failed to meet EIA requirements—including temporarily halting construction of the Xiluodu hydro project on the Yangtze. SEPA has expressed a desire that the media and the general public join in its efforts to push for stronger environmental protection.

If the environmental challenges are dealt with successfully, hydropower, as a relatively stable, reliable, and powerful source of clean, renewable energy, can be expected to play a significant role in China’s energy portfolio.

Yang Jianxiang is a senior energy journalist with China Features in Beijing. This article was coordinated by the Beijing-based Global Environmental Institute.

Outside contributions to China Watch reflect the views of the author, and are not necessarily the views of the Worldwatch Institute.