Hydropower as an Alternative Energy Source in China: Costs and Benefits
By Bryan Tilt
April 28, 2014
The rapid rise of the Chinese economy has lifted hundreds of millions of people from poverty and transformed an agrarian nation into a manufacturing powerhouse. But economic growth is always constrained by biophysical limits, and electricity production—needed to power everything from industrial factories to consumer goods—is proving to be one crucial limit. Approximately two-thirds of China’s electricity demands are met by coal-fired power plants, giving China the dubious distinction of being home to some of the world’s most polluted cities, costing hundreds of thousands of lives and mounting economic losses. 
Yet this trend has implications beyond the nation’s borders, as China has become the world’s largest emitter of carbon dioxide, which is one of the primary culprits of global climate change.
This is not an easy problem to solve, particularly without compromising economic growth. Chinese leaders, like their counterparts in developed and less-developed countries, are often forced to choose from a set of bad options when it comes to electricity production. Policymakers in Beijing are actively discussing alternative energy sources, sometimes referred to as “clean energy” (qingjie nengyuan) or “green energy” (lüse nengyuan), in the push to establish a “low-carbon economy” (ditan jingji).
A major part of this discussion focuses on hydroelectricity produced by large-scale dams on nearly all of China’s major river systems. Government documents report (with a measure of pride) that hydroelectricity output, which currently accounts for 16% of the nation’s electricity portfolio,  grew at an annual rate of 12.9% throughout the eleventh five-year plan period (2005–10) and will continue on a similar pace for the foreseeable future.  This means that China now has another yardstick by which to measure its progress: home to half of the world’s 50,000 large dams, China has far outpaced all other countries and continues to add dozens of dams to its portfolio each year. While such projects bring considerable benefits—reliable electricity irrigation water, enhanced navigability, flood protection, and the prospect of decreased reliance on fossil fuels—they also entail a unique set of environmental and social costs.
First, the distribution of hydropower supply and demand poses significant geographic and technical challenges. Most hydroelectric dams provide power to large coastal cities, such as those in Guangdong Province, that have grown into global manufacturing hubs. But the requisite conditions for hydropower production—high-volume rivers with steep gradients—are found far inland. Since the tenth five-year plan (2000–2005), the central government has promoted a policy called Send Western Electricity East (xi dian dong song). This policy put in place high-voltage direct-current transmission lines, which is a cutting-edge technology that Chinese engineers helped develop that allows electricity to travel long distances with minimal losses. But while the benefits of hydroelectricity accrue to comparatively wealthy coastal cities, the costs are largely borne by inland communities that have long endured economic marginalization.
Second, rapid hydropower development entails complex political, economic, and institutional arrangements. In 2002, amidst economic reforms, the State Electric Power Corporation was dissolved. Its assets and responsibilities were distributed among two groups of newly reconfigured state-owned enterprises: those responsible for electricity generation and those responsible for electricity transmission and distribution. The group responsible for power generation comprises five state-owned enterprises; often called the “big five electricity giants” (wu da fadian jutou), they hold diverse energy portfolios including coal, wind, solar, and hydropower. Several are Fortune 500 companies with major subsidiaries publicly traded on the Hong Kong, Shanghai, and New York stock exchanges. These kinds of public-private ventures present a complex institutional problem in which the entities pushing for hydropower development are often more powerful, and better funded, than the regulatory agencies overseeing them.
The final area of concern relates to the environmental and human costs of hydropower. When a new dam is installed on a major river, it fragments the riparian ecosystem, changing a free-flowing river segment into an expanse of still water. The process disrupts sensitive habitat; alters the temperature, chemistry, and sediment load of the water; and changes the geomorphology of the river itself. The Three Parallel Rivers region of Yunnan Province is a case in point. Dozens of dams are under development on the Jinsha (the headwaters of the Yangtze), the Lancang (Mekong), and the Nu (Salween), even while international NGOs mobilize to preserve the region’s estimated six thousand plant species and numerous rare or endangered animals.
The most pressing human problem associated with dams is the uprooting of communities through displacement and resettlement. In 2004 a Xinhua News Agency report based on research conducted by the Ministry of Water Resources cocluded that the nation’s displaced population related to dam construction totaled at least fifteen million people, ranking it first in the world.  Communities displaced by dams often struggle with the loss of farmland, unemployment, social conflict, and inadequate monetary compensation.
Meanwhile, there are a few reasons for optimism about the future of hydropower development. In 2004, then premier Wen Jiabao, citing the newly promulgated Environmental Impact Assessment Law, halted a series of dam projects on the Nu River. A decade of conflict and controversy ensued, and while the outcome of that case is still uncertain, the heightened public scrutiny has caused developers to scale back their plans for the Nu River projects, at least in the short term. Additionally in 2012, the State Council passed a new directive on “social risk assessment,” providing a stronger administrative mandate for considering the social effects of large development projects, including dams, before they are initiated.  Government agencies are also increasingly calling for public hearings and other forms of participation in the approval process for dams, while working to improve standards of monetary compensation for displaced people.
If urban Chinese residents have cleaner air to breathe a generation from now—and I think they will—such improvements will have been driven by the demands of a rising middle class weary of dealing with the environmental and health consequences of fossil fuels. And it will require public and private investment in renewable energy of all kinds, including hydropower. The question is whether hydropower development can be undertaken with better scientific and legal standards and a demonstrated willingness to address the environmental and social costs.
Bryan Tilt is Associate Professor of Anthropology at Oregon State University.
 Elizabeth C. Economy, “The Great Leap Backward? The Costs of China’s Environmental Crisis,” Foreign Affairs 86, no. 5 (2007): 38–59.
 " Zhenya Liu, Zhongguo dianli yu nengyuan [Electric Power and Energy in China] (Beijing: China Electric Power Press, 2012).
 State Council of the People’s Republic of China, “Guowuyuan guanyu yinfa nengyuan fazhan shi’er wu guihuade tongzhi” [Notice on Energy Production in the Twelfth Five-Year Plan], January 23, 2013.
 R.F. Yao, “Shui Li Bu: Wo guo shuiku yimin zongshu 1,500 duo wan” [Ministry of Water Resources: Our Nation’s Dam-Induced Migrants Total at Least 15 Million], Xinhua, 2004.
 Keith Bradsher, “‘Social Risk’ Test Ordered by China for Big Projects,” New York Times, November 12, 2012, http://www.nytimes.com/2012/11/13/world/asia/china-mandates-social-risk-reviews-for-big-projects.html.
This is one of three essays in the roundtable "China’s Air Pollution Problems."
Download all three essays in PDF format or access them online below.
1. China’s International Air Pollution: Is the United States Part of the Problem?
2. Addressing the Gap between Rhetoric and Reality in China’s Air Pollution Control:
Why Civil Society Is Essential
3. Hydropower as an Alternative Energy Source in China: Costs and Benefits