Hydropower Ambitions on the Rise

October 25th 2002 (FriedlNet.com) - In an effort to divert resources away from polluting coal-burning activities and investment in non-renewable energy sources, China has been increasingly lured on by the vast potential for domestic hydropower projects, the central government earlier this week having approved a plan to build 2 humungous hydropower stations with a combined generating capacity of 18.6 gigawatts. 

According to Zou Guangyan, deputy governor of Sichuan province, this even surpasses the already mammoth Three Gorges Project by 0.4 million kilowatts. The plants will be located at Xiluodu and Xiangjaiba in the border region between Southwestern China’s Sichuan and Yunnan provinces. This area at the upper reaches of the Yangtze River --- with a length of 6.300 kilometers the 3rd longest river on the globe and the longest in China --- hosts supreme conditions for such projects, with a smaller area submerged and fewer people displaced than at the controversial Three Gorges site, despite the larger capacity. 

According to Zou, further stations with a capacity exceeding 30 gigawatts would also be built in the next decade or two, in an ambitious effort by the government to boost hydroelectricity supply to cover a quarter of all Chinese energy needs. According to the Chinese Statistical Yearbook 2002, hydropower made up more than 8% of total energy production, following coal (68%) and crude oil (20%). With a measly generating capacity of 163 megawatts in 1949, the Middle Kingdom has come a long way. Even the current figure of more than 60 gigawatts of generating capacity seems not all that large compared to current individual gigaprojects under construction and being planned. Estimates put total exploitable hydropower resources in China at 380 gigawatts, with China hoping to nab a third of this by 2010.

With the nearly double-digit growth the country is now enjoying, future energy sources will have to be secured, and ‘going with the flow’ seems like a good bet in the light of water’s renewability. It is just the cost aspect that causes many headaches, as energy from coal comes cheap and virtually all enterprises involving renewable energy sources operate at a loss. Many critics believe the Three Gorges project to never make it past break-even, although the energy generating capacity is great. An estimated $22 billion will be sunk into the project, with construction expected to be completed around 2010. Starting next August, four of the planned 26 power generating units, with a combined capacity of 2.8 gigawatts, will be hooked up to the nearest electricity grid. 8 of the 26 turbines are being built by a consortium made up of GEC-Alsthom (France, UK) and Swiss ABB Asea Brown Boveri, with contracts for another 6 (valued at $320 million) going out to Germany’s Voith and Siemens AG, and GE Canada. Last month, the China Yangtze Electric Power Corporation was set up to help finance the dam project, hoping to raise money on capital markets to generate cash flow for the acquisition of two or three generators each year until all are operating in 2009 or 2010.

From the environmental perspective, specialists estimate that it would take 50 million tons of raw coal or 25 million tons of crude oil to produce the same amount of energy the Three Gorges dam project could churn out in one year. The to date largest hydropower project on the globe --- 1.44 times larger than the existing South American Itaipu power plant --- would keep 1 million tons of sulfur dioxide, 300,000 tons of nitrogen oxide, 10,000 tons of carbon monoxide and 150.000 tons of soot from being pumped into the air each year, lessening the perennial haze that looms over many major Chinese cities.

On a separate note, Beijing Datang Power Generation Co. , the second-largest power producer in China, announced plans to build three hydropower plants in Yunnan province, with a total of 0.814 gigawatts in capacity, estimated to cost $520 million. Datang already owns 4 such plants with a total capacity of 6.2 gigawatts. Last month the company also got approval to build two 200-megawatt plants in Datong in Shanxi province and a 300-megawatt plant in Tangshan in Hebei province.

To delve deeper into the intricacies of the Chinese energy market, be sure to check out the CIEC’s China Industry Sector Report on China’s Electricity Industry, available on this site.

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