China Water Risk (CWR): What is the current share of small hydropower of China’s total installed hydropower? And do you think it will increase in the future?

Liu Heng (LH): In China, a hydropower plant with capacity of <50MW is classified as small hydro. Until now the total installed capacity of hydropower is around 300GW, of which small hydro is around 73GW, so accounting for about 24%.

Small hydro accounts for 24% or 73GWof China’s total installed hydropower capacity

In the past, small hydro use to account for a third of the total hydropower installed capacity. But with the recent development of large and medium-scale hydropower, the share of small hydropower has dropped. Most of the viable sites have already been developed.  

CWR: Does that mean that China’s small hydropower development has reached its maximum potential? What about the situation globally?

LH: According to the national statistics, China’s overall development potential of small hydropower is about 128GW. This means that we have developed more than half of such potential. Of course, the development differs amongst regions: for example, in the Southeastern provinces, the ratios have reached 60%-80%.

China has developed >half of its small hydropower potential

Globally, there is still great potential for the development of small hydropower. The development rates in many parts of Africa are still less than 10%, where some rivers are completely untapped. We (ICSHP) have visited those sites. Many of them have very good conditions for developing hydropower and hold great potential.

But it is worth noting that the global data that the ICSHP currently has is not comprehensive. This is mainly because some countries do not have the country-level planning on small hydropower development. Thus, the potential values of these countries are estimated based on the existing data. In addition, in order to ensure consistency across countries, the benchmark for classifying a small hydro is set at 10MW, which is different from the method used in China.

CWR: Could you share with us your view on the general policy towards small hydro in the Chinese government?

LH: In the past, China implemented the so called ‘self-built, self-managing and self-owned’ policy, which greatly promoted the development of small hydropower. After two to three decades, as I said, most of the sites with good conditions have been developed. The remaining have relatively poorer technical conditions with lower financial returns. Also, environmental requirements (towards infrastructure projects) are increasing. Nevertheless, China still hopes to encourage and attract social capital in the investment of rural hydropower construction, under the premise of protecting the interests of farmers and ensuring ecological security.

Of course, specific policies should be decided on a regional basis. In areas where small hydropower development rate has reached 80% or above, future development should be strictly controlled; in areas where the rate is between 60%-80%, moderate development could be allowed, whereas in others where the rate is still below 60%, small hydro development should continue to be encouraged.

In early April 2015, the Ministry of Water Resources (MWR) held a meeting on rural electrification, in which rural hydropower development during the “Thirteen Five Year Plan” (13FYP) was also discussed.  The identified priorities of future work include:

1. Using hydropower to improve electrification in rural areas;
2. Using small hydro to replace biomass fuel; and
3. Upgrading and retrofitting existing plants to improve efficiency and/or increasing capacity.

During the 13FYP, the MWR plans to add 10GW of small hydro.

CWR: As you mentioned, some of the small hydropower projects aim to replace the burning of biomass fuels in rural areas, so as to provide clean electricity whilst reducing adverse environmental impact caused by biomass combustion in the open fields. How are these projects doing?

LH: The main aim of small hydropower development is to generate electricity. In the process of promoting rural electrification, small hydro provided electricity so that rural farmers can use electric cookers instead of burning traditional biomass fuels. By 2015, the end of the 12FYP, China plans to have in place:

• 300 pilots counties using hydropower to improve rural electrification;
• 1,800 villages and 80 townships using small hydro to replace biomass fuel; and
• 4 pilot counties focusing on ecological protection.

The current plans to replace traditional biomass fuels, include both building new plants and retrofitting plants to fulfil such function. By retrofitting the existing plants, it also helped such plants to obtain applicable government subsidies on hydropower to improve their economic performance.

CWR: So how has the building/retrofitting of plants progressed?

LH: Until now, over 4,000 small hydro plants have been upgraded, which accounts for about 10% of existing small hydro plants. Such upgrading means that the electricity generation efficiencies of these plants increased. Moreover, their safety and environmental performance have also improved.

For the 13FYP the focus will be more on increasing the capacity & efficiency of existing plants and shifting to more comprehensive utilization of the plants

In the past development, much emphasis was on building new projects. But starting from the 13FYP, the focus will be more on increasing the capacity and efficiency of existing plants and promoting sustainable utilisation of hydropower. The model of hydropower development is shifting – from the sole function of electricity generation, to more comprehensive utilization of the plants, in order to maintain the ecological functions and environmental benefits.

CWR: The MWR issued the draft of the ‘Green Small Hydropower Evaluation Standard’ in July. The new standard provides basic requirements, content and the methods to evaluate a green small hydropower plants. What is the difference between this new standard and EIA as well as other ‘green hydro’ concepts brought up by some international organizations?

LH: EIA is still necessary in the construction process of a small hydropower plant. The new ‘Green Small Hydro’ standard uses the EIA as the basis with additional requirements, such as fulfilling social function, safe operation and contributing to the improvement of local economy and livelihood.

When we developed this new standard, we also studied the existing standards in other countries, including Switzerland’s ‘Greenhydro’, US’s ‘Low Impact Hydropower’ and the International Hydropower Association’s (IHA) ‘Hydropower Sustainability Assessment Protocol’.

The “Green Small Hydro” standard includes >20 indicators on environmental & social impacts

Currently, the new standard includes more than 20 indicators. During the development phase of this standard, over 100 small hydropower plants with good environmental performance and recommended by provincial governments were selected as test cases.

The trial evaluation using the standard showed that around 95% of the selected plants achieved good results; while, the remaining 5% failed some indicators such as ecological protection of the river course.

CWR: At the end of the year, the United Nations climate change Conference (COP21) will be held in Paris that will decide global actions on climate change for the next 15 Years. China has pledged to the international community its emission reduction targets. What do you think of the role of small hydro in China to meet the country’s overall emissions reduction targets?

LH: The development of small hydro is aligned with the actions needed to meet China’s emission reduction targets. Over the past few years, hydropower, along with other renewable energies such as solar and wind power, have experienced significant development. For small hydro, the technology has become relatively mature and it has the advantage to bring electricity to remote rural areas. Therefore, in the context of energy saving and emission reduction, China will continue to promote the development of small hydro.

“The development of small hydro is aligned with the actions needed to meet China’s emission reduction targets.”

Meanwhile, we have seen hydropower being developed in combination with solar or wind power so that they could complement each other in case of varying conditions of available resources such as water flow, sunlight radiance and wind speed. This could improve the power generation efficiency of the project.

Although the development of small hydro may change the geological features and landscape of the involved river section, its impacts compared with large and medium-scale hydropower plants, are relatively small. In addition, because most of the small hydropower projects are built on small tributaries, the impact on fish is also limited. Currently, the development of a new plant, be it diversion type or conventional with dam, must meet the basic requirement of ecological flow to ensure the protection of the river ecological environment.

CWR: Nowadays some Chinese hydropower investors are also developing projects overseas. Overall, the central government is encouraging domestic companies to ‘go abroad’. Are there any basic principles to follow with regards to overseas hydropower development?

LH: The government encourages and supports domestic enterprises to invest in and develop hydropower projects overseas. There are three key principles to follow:

1. Construction standards: Most of the requirements will be detailed in the contract. If there is a local standard, then the overseas project will follow that; if there isn’t, the Chinese standard related to hydropower construction and operation will be followed. Of course, sometimes the local partner will require using European or US standards. In that case, it may put higher requirements on the Chinese company and hence increases the cost and difficulty;
2. Qualification: The Ministry of Commerce has introduced an guideline on overseas investment. For Chinese companies which plan to construct hydropower plants overseas, especially for aid projects, they should hold Class A construction qualification. This shows high standard from the government for international projects.
3. Environmental protection: This should be the common responsibility of mankind. Chinese companies shall always keep environmental protection in mind in their oversea investment. Moreover, the oversea environmental performance of Chinese companies also matters for the image of the entire country, and therefore needs extra attention.

Further reading

• Vanishing Ice: Asia Running Dry – The Hindu-Kush Himalayan region plays a vital role in Asia’s water future. It is the source of 10 major rivers which feed 17 countries. CWR’s Tan shares her worries over the vanishing glaciers & the lack of cohesive action to tackle real threats
• Yellow River Changing Course – Prof. Vivian Forbes at Wuhan University provides a detailed overview of the Yellow River’s 5,500km long journey from source to delta and shares how & why the alignment of the river’s mouth has changed over the centuries
• Does Coal Always Mean Water Stress Along With Economic Growth? – WRI’s Fu, Zhong & Wang investigates how Ningxia manages its water resources to develop coal. See what strategies can be adopted to minimise water stress whilst allowing economic growth

• Towards Water & Energy Security – China Water Risk published report titled “Towards A Water & Energy Secure China”. Tough choices lie ahead in power expansion with limited water. Find out what strategies are employed and get a comprehensive overview of water risk exposure across China’s power landscape
• China: Not Ready To Move Away From Coal – Professor Xie Kechang, Vice President of the Chinese Academy of Engineering, on the future role of coal, strategies to ensure energy security & challenges ahead for coal-to-chemicals
• China’s Pursuit Of Energy Savings – Our report  “Towards A Water & Energy Secure China” shows that billions of cubic metres of water can be saved via energy savings. See why China has no choice but to pursue this strategy
• Wind & Solar: Hidden Water Risks – China is looking at aggressive renewable expansion with wind & solar set to soar. But could this intensify toxic hidden water risks from rare earth mining? Also some solar technologies require more water than coal to generate power. We explore these hidden risks in our report “Towards A Water & Energy Secure China”
• Avoiding Hydro Wars – With up to 124GW of planned hydropower on China’s transboundary rivers, no wonder regional geopolitical tensions over water is running high. Debra Tan gives the low down on China’s hydropower expansion, are there other options to avoid sparking hydro wars?
• Keeping Peace: China’s Upstream Dilema – Despite voting against the UN Water Convention, China does embrace its central principles. Prof Wouters shares her expert views on the region’s water treaties & keeping the peace on transboundary waters