China is the world’s largest energy consumer, its ferocious industrial expansion and urbanisation driving a demand for electricity that has risen 10% in a single year between September 2012-13. This has come at a cost: China produces and consumes more coal than anywhere else in the world, and Beijing and other major cities suffer under terrible air pollution from the country’s coal-fired plants. Groundwater is over-extracted, with reports of around 28,000 rivers disappearing across the country in the last 20 years.
Hydropower to the rescue…
Hydropower produces around 21% of the world’s energy, a proportion slated to grow to over 85% by 2050, representing an increase in capacity of 150-200GW. Despite its many coal plants, China is the world leader in hydropower construction with 22,000 dams of 15 metres or above – almost half the 45,000 large dams that exist worldwide. In its 12th Five Year Plan (2011-2015), China announced its intention to expand hydropower capacity further, with 130 planned large scale hydropower projects that would bring the total generating capacity to 284GW. This is in part to address growing concerns about energy security and the environmental and social damage caused by its existing fossil fuelled energy supply.
…but it’s no free lunch
But while China presents hydropower as clean energy, with dams causing little or no environmental impact, the reality is very different. Like any form of energy production, there are trade-offs. Dams can be cleaner and cheaper than burning fossil fuels, but they inevitable displace people, threaten livelihoods, and by submerging farmland and natural habitats they affect food security and destroy ecosystems.
And building so many dams has caused significant environmental and social damage in China. The enormous Three Gorges Dam displaced 1.24 million people, negatively affecting livelihoods that depended on the flood-pulse nature of the Yangtze river. The Lancang river (also known as the Mekong) has five dams in operation and plans for a cascade of up to 20. The Lancang Cascade allows China to control the quantity of water reaching the Lower Mekong Basin, especially in the dry season, which is vital to the livelihoods, food security and economies of Laos, Cambodia, Vietnam and to a lesser extent Thailand. The dams also alter the timing and size of the river’s flood-pulse characteristics, preventing sediment and nutrients from restoring floodplain farmland and also affecting river fisheries.
The Lancang Cascade is more than just electricity: it helps drive economic development in China’s southern industrial cities like Kunming and Guangzhou, and generates profits for the state-owned corporations responsible for its construction, development, and operation.
China is also exporting its hydropower expertise, with around 300 projects in 78 countries under construction by Chinese state-owned hydropower companies such as Sinohydro Corp and Dongfang Electric Corp. In the Lower Mekong Basin, Chinese state-owned firms are building at least 30 dams in Myanmar, 14 in Laos, seven in Cambodia and three in Vietnam. The opportunity to finance, develop, build and contract out this work is an enormous opportunity for China to increase its political influence, develop trade links, and funnel huge profits into its treasury through its state-owned firms.
For the economies of Southeast Asia, China offers funding and expertise without the red tape and stricter environmental and social protection demanded by the likes of the World Bank or Asian Development Bank. And these are considerable investments: in 2010, China’s Lower Mekong Basin investments were US$46 billion in Thailand, US$27.3 billion in Vietnam, US$4.7 billion in Myanmar, US$1.3 billion in Cambodia, and US$1 billion in Laos.
China has repeatedly stated that it follows the laws and policies of the countries where it invests and builds. This includes a policy of non-interference in domestic affairs that has drawn criticism from civil society for its lack of environmental and social protection. Perhaps in response to this criticism, in February 2013, the Ministries of Commerce and Environmental Protection released the Guidelines on Environmental Protection in Foreign Investment and Cooperation. These guidelines encourage Chinese companies to:
identify and pre-empt environmental risks in a timely manner, lead our companies to actively fulfil their social responsibility in environmental protection, build a good foreign image of Chinese companies and support the sustainable development of host countries.
It’s still too early to tell what impact these new guidelines will have on China’s hydropower development, but they represent progress.
In an era of global consumerism and rapidly increasing electricity demand, hydropower is increasingly slated as a clean and cheap solution. For economies such as China, it presents an opportunity for political and economic influence, to reduce greenhouse gases, and to meet domestic energy needs. The powerful forces that are behind hydropower’s expansion, however, are also those that tend to downplay its costs. These still weigh too heavily on the environment, and on and weaker nations and their people. Hydropower may be a potential solution, but understanding what drives and enables it is key to developing dams that properly address their costs and benefits.