The benefits and costs of China’s hydropower: Development or slowdown?

Abstract

During the past few years, the Chinese government has formulated ambitious plans for building many large hydropower stations, but so far it has withheld final approval for the construction of the majority. The environmental problems and rising cost of coal-fired stations, China’s Copenhagen commitment, the creation of a high-voltage national power grid, and the availability of cheap capital should have all worked to the advantage of hydropower. Moreover, present projects require much less resettlement than those in previous decades. However, since 2006 political concern for the social problems of forced migration and distrust of the business alliance between power companies and provincial governments seem to be obstacles. Stricter regulations for environmental impact assessment, more comprehensive planning of water and reservoir use, and a lack of staff have lengthened approval processes. Central and provincial governments do not agree on developmental priorities and electricity prices. Uncertainty about obligations imposed on investing power companies is a factor too. Thus, hydropower policy suffers from conflicting goals and uneven commitment of various bureaucratic interests. Even if a clear policy commitment could improve policy implementation, China’s target of 330 GW of regular hydropower capacity in 2020, and thereby its renewable energy target, are unlikely to be met.