WATER POLITICS

This is not an opinion about the environmental impact of hydropower – you can read that here. This is about regional geopolitical tensions caused by China’s hydropower expansion. At the start of this year, we said that the Year of the Horse will mean China will need “Show-jumping Skills for Transboundary & Third Pole ‘Obstacles’”. That time has come now. Not only should Beijing play a more central role in regional geopolitics but neighbouring countries should also recognize China’s important role as the upstream riparian in ensuring regional water security.

Thus far, China & dams are two words that conjure up images of an “evil” China damming up the world’s rivers wreaking environmental havoc. Indeed there have been some recent high profile articles about China’s damming of transboundary rivers, (the latest in the Financial Times). China is also often portrayed as the aggressor withholding “secret information” about its hydropower expansion. Admittedly, China is often silent about its hydro expansion plans, but there is much that is not so secret: here’s the lowdown on China’s hydro expansion plans …

China: Damming over the last decade to power the whole of India

China has been busy damming over the last decade. China’s conventional hydropower installed capacity was only 110GW in 2005. It almost doubled to 200GW in 2010 and by 2012 it was 229GW. By 2015, the planned installed conventional hydroelectric capacity will be 260GW and by the end of 2050, this is expected to be 500GW.

India’s total installed capacity is only 250GW as of the end of June 2014. In short, China’s hydro today can almost power the whole of India.  Now that’s a scary thought which leads to three questions:

1. Is China tapping transboundary rivers for this power?
2. Which rivers will be dammed to get hydro power to 500GW?
3. Does China really need such an aggressive hydropower expansion policy?

So far … small-scale hydro has been the rage; transboundary rivers only 7% of hydropower by 2015

At the end of 2012, China had 45,799 small scale hydro dams generating <50MW each. These 45,000 strong small dams accounted for almost 30% of China’s hydro power in 2010. The rest comes from medium-large scale dams.

Not surprisingly, China has a plan as to where these large scale dams (>100MW) are and will be located. China has identified 10 key rivers for large scale hydro development. Three of these 10 are transboundary: Lancang River (Upper Mekong), Nu River (Salween) and the Yarlung Zangbu River (Brahmaputra).

It is clear from the chart above that so far:

• small hydro has been a key cornerstone of China’s hydropower generation;
• most of the development over the last decade has been large scale hydro on China’s 10 key rivers; and
• hydropower generation from transboundary rivers only accounted for 4.4% in 2010 and 6.5% in 2015.

So is there much ado about nothing?

while 6.5% might sound immaterial, it is still close to 17GW of installed capacity and most of this (16.4GW) is on the Lancang (Upper Mekong)

Not really. While 6.5% might sound immaterial, it is still close to 17GW of installed capacity and most of this (16.4GW) is on the Lancang.

To put this in perspective, there has been much protest by environmentalists and downstream riparian’s Thailand & Laos are bickering over a 1.2GW dam.

But wait, this only gets China to 260GW by 2015, where is the additional 240GW going to come from?

No choice but to tap key rivers including transboundary waters

Most of the uplift will come from tapping the 10 key rivers including the transboundary rivers. Assuming that (1) the potential target installed capacity identified for each of the10 key rivers in the 12FYP Hydropower Development Plan is tapped; and (2) that small hydro remains flat at 68GW. The build out composition of the 240GW are shown in the chart below:

This means that by 2050, large scale transboundary hydropower will account for around 28% of China’s hydropower capacity whilst large scale hydro on the other seven key rivers will contribute approximately 43%.

Does China really need such an aggressive hydropower expansion policy? The answer is yes, China needs more power to develop its economy.

+2.2TW by 2050 needed to fuel China’s economic growth

In 2012, China’s total installed capacity was 1.1TW; by 2015, this is expected to be 1.5TW and by 2050, around 3.3TW is required to grow China’s economy and GDP per capita. This means that China will be adding 2.2TW of power, or equivalent to 2x the installed capacity of the US today, by 2050.

This might make China look power hungry but by 2050, the 3.3TW works out to be 2.5kW per capita, making China look ‘power frugal’ compared to the US which in 2010 was already using 3.4kW per capita. In reality, to meet these targets, China has to embark on a massive energy savings spree. Indeed the country is hoping to create a US$725 billion industry out of “Energy Savings & Environmental Protection”.

By 2050, China’s 3.3TW means an installed capacity of 2.5kW per capita …

… compared to the US which uses 3.4kW per capita in 2010

When we break this massive power add into type of energy, it is clear that China has big plans to go green.

As seen from the chart, the mix in 2050 is significantly different from 2015.

It is also clear from the chart that China is not just adding hydro, but is significantly increasing ‘cleaner’ renewables, gas and nuclear installed capacity’s share of energy mix. Whilst China only plans to add 240GW of hydro installed capacity, it plans to add 600GW in wind and 180GW of solar power between 2015 and 2050.

China: worried about shrinking glaciers in the Qinghai-Tibetan plateau & climate change

China is worried that climate change will further exacerbate water scarcity, reduce food production and bring about extreme weather such as droughts and floods. Currently in Henan, severe drought is costing the province RMB4 billion. China will act to ensure water & food security. Reducing coal’s share of energy mix from

Climate change affects us all  …

… Surely, it is therefore in everyone’s interest (regionally and globally) that China optimizes hydropower?

Climate change affects everyone, including China’s neighbours; all of whom are also adding power generation capacity over the next few decades. Surely, it is therefore in everyone’s interest (regionally and globally) that China optimizes the ‘cleanest’ mix of energy with hydropower?

And yes, it is for those power hungry factories on the coast that manufacture 50% of global textiles and 70% of the world’s shoes and a significant portion of electronics, so we as consumers also have a hand in China’s power guzzle.

Of course, China could add more wind and solar but it is already adding them at a faster rate than hydro – in fact hydro’s share of power mix is falling from 22% in 2012 to 15% in 2050 compared to 27% from wind & solar (see chart)

It could also expand gas and nuclear but there are water issues regarding fracking (see here) and also nuclear expansion in “dry” inland provinces (see here). Point to note here is that although coal share is decreasing from 66% in 2012 to 43% by 2050, coal-fired capacity in absolute terms is increasing -more on what China intends for coal reform here.

The choices are stark when it comes down to water.

With glaciers shrinking, the stakes are much higher ….

Given this, wouldn’t the conversation be more productive if it was move from whether China should or should not dam to how we can avoid a “hydro war” if it did

Adding hydro capacity appears inevitable. The good news is that China’s National Energy Agency has capped conventional hydropower development at 500GW. If this is so, regionally we have to decide: do we want China to reduce its reliance on coal? Or do we want China to stop tapping hydropower from transboundary rivers?

Before we answer, let’s bear in mind that glaciers in the Qinghai-Tibetan plateau have already shrunk 15% over the past three decades due to global warming. China may “own” these glaciers, but their meltwaters feed us all. The stakes are much higher than transboundary water disputes. Given this, wouldn’t the conversation be more productive if it was move from whether China should or should not dam to how we can avoid a “hydro war” if it did.

Sharing water: Pot calling the kettle black

The UN Watercourse Convention (UNWC) & international water law spring to mind. There has been a lot of negative chatter around China voting against the UNWC, which first serves as a conflict prevention tool, and second, as a dispute resolution and procedure mechanism. True, three countries, China, Turkey and Burundi voted against it but India, a vocal protestor of China’s damming of the Brahmaputra abstained from voting.

Of the downstream riparian countries, India abstained and whilst, Laos, Thailand, Cambodia and Vietnam all voted in favour of the UNWC, only Vietnam ratified the convention

In order for the UNWC to come into force, it required ratification from 35 countries. One would have thought this was easy given 103 countries voted in favour of the convention. However, it has taken them 17 years to gather the 35 ratifications. Whilst, Laos, Thailand, Cambodia and Vietnam all voted in favour of the UNWC, only Vietnam ratified the convention.

The reality is that some UNWC issues that worry China also worry other countries. But instead of voting against it, they either abstained, or voted yes but then not ratified the convention and are therefore not bound by it. Even the US and Canada did not ratify the UNWC. Is it then unfair to penalize China for being frank about its position? But what is its position?

Incorporating some of the provisions and processes in the UNWC framework could be a way forward

 

Experts in international water law would say that China has soft-soft approach to transboundary water resource management favouring settlement of disputes through peaceful negotiations. According to Dr Wouters, founding director of the UNESCO Centre for Water Law, Policy and Science, a recent study examining China’s transboundary water treaty practice suggests that in general, China’s actions respect the approach of the UNWC. She goes on to say in her opinion that China’s recent actions over water allocation with Kazakhstan demonstrate China’s future approach to transboundary issues. Incorporating some of the provisions and processes in the UNWC framework could be a way forward.

Hope lies in international water law & small hydro

There is hope; many may not realize that China held its first ever International Water Law Symposium in Xiamen this year. As the upstream riparian, China will no doubt play a bigger role in regional water security. It is time we accepted this.

As the upstream riparian, China will no doubt play a bigger role in regional water security. It is time we accepted this.

… and work with China to avoid sparking future hydro wars

We could also work on improving the efficiency of small hydro. The above analysis assumes small hydro remains at 68GW but according to the “World Small Hydropower Development Report 2013”, China’s small hydro potential is 128GW. If this is so, then 60GW remains untapped. This could go some way in relieving the +124GW on the three transboudary rivers. There are typical barriers to small hydro development such as financing and low tariffs. In light of the big picture, surely these are worth working through not just for governments but also corporates.

These are just examples of two areas that could alleviate geopolitical risk. There are many more. Surely it is time to start these productive conversations; to work with China and not against so that we can all avoid sparking future hydro wars.