AS CHINA’S STRONGLY SELF- sufficient economy roars ahead, national planners are approving a stream of major hydro power projects that will add 80GW new capacity by 2020 to the 77GW installed at the beginning of 2002. Most of these projects will be built in only a few of China’s 26 provinces as the others do not have significant hydro power resources In fact, only six provinces Sichuan, Hubei, Guizhou, Hunan, Fujian and Yunnan accounted for over 75% of China’s hydro power production in 2002. Planned projects in Yunnan and especially Sichuan province where the Three Gorges scheme will soon begin to come on-stream will strongly further skew this distribution.
The immediate cause of this bonanza is China’s robust economy. Faster than expected economic growth 8% in 2002 with 7% planned for this year means that overall power demand growth is also booming.
Thus newly established State Power Grid Co general manager Zhao Xizheng told Reuters mid-March that the entire power sector will expand 50% faster than planned during the remaining three years of the current development plan to 2005, namely by 7-8% per year instead of the planned 5%. Since the government wants to boost hydro’s share of total power generation from its present 16% to well over 20%, this sub-sector must expand even more rapidly.
Three distinct strategies are being employed. First, in hydro power resource rich areas such as Chongqing on the Yangtze that also face power supply shortages, hydro power projects of all sizes are being given priority in crash power provision programmes.
Chongqing municipality therefore announced early March it expects to spend US$7.8B between 2003-2010 to install some 6582MW new capacity, 63% or 4155MW of which will be hydro. Projects range from the 20MW Daxihe scheme that will be commissioned later this year to the Pengshui and Panlong projects. The other main ones include Shidi (400MW), Renhe cascade (173MW) and Haokou (300MW).
Secondly, as the Panlong pumped storage project suggests, areas that have exhausted their primary hydro power resource but also face strong power demand are building large pumped storage schemes.
Thirdly, areas that have large primary hydro power resources but little or no demand are hosting an increasing number of mega-projects. Those most recently announced include the Xiluodu and Xiangjiabai projects on the Jinsha tributary of the Yangtze that together will just surpass the Three Gorges installed capacity. But note that Yunnan is also building a string of major schemes of which the 4200MW Xiaowan is now fully financed. The even larger 5850MW Ruzhadu has just passed feasibility.
Significantly, some of these projects are intended to support others that are already built or in planning. Thus the 273m high Xiluodu dam will have only 60m of active storage. Its large dead storage will consequently be used to trap sand that would otherwise be carried down to Three Gorges. Xiluodu is expected to reduce sand volumes entering Three Gorges by about 34%.
Similarly, two other dams, Wudongde and Beihetan, are planned upstream of Xiluodu and Xiangjiabai on the Jinsha with work beginning this year. Apart from together contributing yet another Three Gorges 7.4GW and 12.5GW, respectively they will effectively further reduce downstream siltation.
Finance for all these projects is unlikely to pose a problem. For one thing, China can take a very broad view of cost/benefit analysis. Thus deputy director Xiong Te of the Yangtze River Water Resources Committee (YRC) told Xinhua early February that the US$19.3B spent so far on taming the flood-prone river (that includes US$10.9B for Three Gorges) has already generated some US$84.6B in (unspecified) benefits. The China National Tourism Administration is now contemplating developing a ‘greater tourism-based economic sphere’ around Three Gorges.
For another, China’s power sector reform is opening it up to the country’s financial markets. Three Gorges, for example, plans to list up to 18% of its equity on the Shanghai stock exchange by year-end, according to China Yangtze Power Corp (CYP) vice president Kou Riming mid-February. This share could rise to 50% ‘within a few years…. and beyond [that] mark as China’s power market reform evolves’.
Significantly, CYP will be building and operating Xiluodu and Xiangjiabai. Several of Yunnan’s projects also involve one or more of China’s six new power generation companies, most of which are also listed on at least one stock market with some having foreign shareholding. Clearly, money will be no obstacle.
About the only thing that could stall the new rush, therefore, is a repeat discovery of the fallibility of Chinese statistics. Barring that, China could well build more new hydro capacity over the next two decades than all the rest of the world put together.