As Wen Jiabao departs, China's dam plans to accelerate

Mon Nov 19, 2012 2:29am IST

* New leadership preparing for new dam building boom

* Hydro crucial component of China's clean energy drive

* Wen's departure could strengthen big power companies

By David Stanway

BEIJING, Nov 19 (Reuters) - The number of new hydropower projects in China could surge as the country's populist premier Wen Jiabao retires and a new leadership team races to meet ambitious 2020 energy goals.

Dam building slowed considerably under Wen, who personally intervened to block hydropower projects and avoid the potential for protest from local populations. Projects such as the $59 billion Three Gorges Dam have been the focus of criticism over the social and environmental cost China is paying for development.

More dams could be a tough sell as an increasingly affluent public pushes back against a "growth at all costs" economic model. As China's new leaders consider how to power expansion, however, they have little choice but to push ahead with hydropower given that alternatives like coal or nuclear fueled power may be even less palatable to the population.

"It isn't that hydropower is the best choice -- it is the only choice," said Lin Boqiang, director of the China Centre of Energy Economics in Xiamen

"Not everyone agrees with hydropower and especially when it comes to building big dams there are a lot of conflicts and we need to be conservative when considering the impact on the environment, but China has no other option."

The government aims to boost total power capacity by nearly a half to 1,500 gigawatts by 2020, up from 1,060 GW at the end of last year, while cutting coal consumption and limiting growing dependence on expensive gas imports.

The scale of the task is massive. The increase is roughly equivalent to adding Russia and India's total combined power generation capacity.

Beijing is also seeking to raise the share of non-fossil fuels to 15 percent of its total energy mix by 2020, up from 9.4 percent in 2011. But China has scaled back its nuclear plans since Japan's Fukushima disaster, limiting clean energy options and making it harder to hit the targets without many more dams.

UNTOUCHED RIVER

Wen's tenure as premier saw a number of projects shelved, with only a third of the projects identified as a priority over the 2006-2010 period actually going ahead, said Zhang Boting, the deputy head of the China Society for Hydropower Engineering, a pro-hydro group.

Among the projects vetoed by Wen were a series of dams on Yunnan's untouched, UNESCO-protected Nu River, known outside China as the Salween, in 2005. The project has been shelved since, but it is still listed among the government's key development projects for the 2011-2015 period.

Wen, a geologist by trade and populist by instinct, is due to step down in March 2013. But long before his departure, the tide had begun to turn. China's latest five-year plan said 160 GW of new hydro capacity needed to go into construction over the 2011-2015 period.

"If implemented, it will result in an unprecedented dam-building push," said Peter Bosshard, director of environmental group International Rivers, which campaigns against big dams.

The builders of several projects stalled during Wen's tenure as premier have already begun construction even before receiving approval to go ahead. Giant power firms are preparing new multiple dam systems on the upper reaches of the Yangtze and Mekong rivers in southwest China's Yunnan province.

The 1.9 GW Huangdeng project, one of a series of dams under construction on the Mekong by China's biggest power firm, the Huaneng Group, is now 40 percent complete even though it hasn't yet been fully approved, activists say.

Huaneng and other giant state-owned utilities are clearly confident that final approval will be granted quickly once the new leadership is in place.

STOMACH TO TAKE ON OPPOSITION

Policy documents have helped fuel their confidence. An energy white paper published in October said China will "rely on hydropower to meet more than half of the (non-fossil fuel) target". Total hydro capacity would reach 290 gigawatts by the end of 2015, up from around 230 GW now, and China's rivers could potentially run as much as 542 GW, the paper said.

According to its "five-year plan" for renewable energy, China aims to launch 60 big hydro plants over 2011-2015.

Wen's ability to intervene to block hydropower plants was strengthened in 2007 when final approval for dam projects was given to the cabinet, the State Council, chaired by the Premier.

Final approval for big dams will continue to lie with the cabinet, and opponents may be encouraged by the recent remarks of environment minister Zhou Shengxian, who said big projects will need to resolve "social impact" issues before going ahead.

The industry is increasingly impatient. The project delays have angered not only power executives, but also energy officials and local government leaders who say that while dams are disruptive, benefits far outweigh costs.

Xu Dingming, a State Council energy advisor, has repeatedly spoken out against what he sees as the folly of overzealous campaigning against dams, especially in poor regions like Yunnan, noting that stable electricity supplies would galvanize the economy and allow mineral resources to be developed.

How quickly construction accelerates will depend on the stomach of the new leadership to take on and manage public opposition to the projects, Zhang of the China Society for Hydropower Engineering said.

"Whether they will speed up the pace of development will depend on where their courage lies," he said.

"If they seek to pander to public opinion like Premier Wen, you will have to look at how the public views hydropower." (Editing by Simon Webb)

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