Domestic Energy Needs and the “Send Electricity East” Campaign

By 2050, the total consumption of primary energy in China is expected to reach the energy equivalent of roughly 3.9-4.9 giga tons of coal (Kang et al 2013). The demand for electric power within China has increased significantly since the late-1990s, when the influence of economic reforms came into full swing. The main driver of this growth in energy demand arose from the industrial sector, but also through an increasing Chinese middle class with more disposable incomes. Hydropower currently supplies roughly 16%

of China’s total electricity (Rosen and Houser 2007), reaching roughly 249 GW

(exceeding combined installed capacity of the USA, Canada, and Brazil) in 2012 (Hennig et al 2013), and is viewed as a key source of power for continued development. Within Yunnan itself, >90GW of hydropower is planned, with almost half installed (Hennig et al 2013).

Figure 6: Growth of China’s installed power and hydropower capacity (Source: Hennig et al 2013, 586)

4.3. Transmission lines . . . 591

PR China's GDP growth has been the highest in the world for years. The rapidly growing economic development is inevitably accompanied with an increasing demand for energy in general and electric power in particular. China has been fast developing its energy sector in order to sustain its impressive economic growth and provide electricity for the most populated state.

The challenge of the rapidly growing energy and power sector in the 21st century is unique worldwide. A key issue within the present and future energy sector strategy is to generate and supply electrical energy for the rapidly growing economy and urban population, as well as mitigating carbon emissions. Finding a proper solution for this energy bottleneck will determine the economic, social and sustainability future of China.

In 1980, in the early years of China's economic liberalization, it had merely 66 GW of installed capacity, today it has 1139 GW globally the largest capacity (seeFig. 1). This extremely fast growth is unparalleled in the world. Presently, China adds a new installed capacity in less than two years that is comparable to the entire installed capacity of a strong West European economy like Germany or France. Despite this strong growth, China's power sector faces temporary cyclic shortages. The latest were in 2002–

2005 and in 2010–2011.

With the breakup of the former Chinese Ministry of Energy in 1997 and the subsequent State Power Corporation in 2002, Chinese power generation was separated from the grid but also from the project planning. As a result of these reforms, large state owned holdings emerged in their field. These holdings control about half of the Chinese power market and are becoming increasingly active on a global scale.

China's primary energy resource is still coal. About two third of the installed capacity is thermal power (mainly coal, but also gas

and petroleum); its share in the energy production output is even higher. Although China's coal use grows fast and steadily, over the last years the country closed about 77 GW of old, small or inefficient thermal power plants. Aside from the massive devel-opment of thermal power stations, China is seriously working in diversifying its power mix and reducing the ratio of carbon emissions.

These developments place regenerative energy, mainly hydro-power, in a prominent role in China's present and future energy sector strategy. China has an ambitious target of meeting 15% of its primary energy demand with renewable energy by 2020. This share should be increased to 20% in 2030. In that scenario the role of hydropower in power generation is substantially greater than any other renewable energy technology.

Therefore, the present growth and dynamic of China's hydro-power sector is in a dimension which is globally unique. In 2012 an immense 249 GW were generated by hydropower (see Fig. 1).

In the global context China ranks first and has by far the highest installed hydropower capacity and the largest annual growth.

These 249 GW are so high that it exceeds the cumulative installed capacity of the USA, Canada and Brazil, which rank directly behind China (see Fig. 2). Over the last years China added in average between 15 and 20 GW/year in new hydropower capacity[1].

Within China, the province of Yunnan, plays a key role in its future hydropower scenario. Yunnan has been implementing 490 GW of hydropower, of which currently almost half is installed. At present makes Yunnan one of the largest hydropower generating regions worldwide. Additional Yunnan has an unique geographic and geopolitical setting. It is characterized by its unique bio-, geo- and ethnic diversity as well as by its six important basins, four of which are international. These unique features have caused a special scientific interest in Yunnan's hydropower development[1–5].

We aim to analyze three major objectives. First, we study the present state of Yunnan's specific and unique hydropower development. Second, we compare social and environmental

Fig. 1. Growth of China's installed power and hydropower capacity (selected years). Fig. 2. Comparison of the installed capacity and generated electricity of the four leading hydropower nations in 2012.

T. Hennig et al. / Renewable and Sustainable Energy Reviews 27 (2013) 585–595 586

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As Magee (2006a, 2006b) posits, regional development in Guangdong may also be a primary driver behind Yunnan’s hydropower development, as a number of political campaigns aimed at both poverty alleviation and a redistribution of energy resources drive development. Several long-standing development campaigns relate directly to this energy transfer drive: “Send Electricity East” (西電東送), “Send Yunnan Electricity to Guangdong” and “Send Tibetan Electricity Outward”. The first two campaigns

mentioned are of particular importance, as they are the most prevalent among hydropower related policies. All of the campaigns are attempts to harness the power potential of China’s western rivers to continue to meet the large power demands from the large cities in the east, specifically those in Guangdong (Magee 2006a; Tilt et al 2009).

The “Send Western Electricity East” began in the 1980s out of central authorities attempts to tap Yunnan’s Yuan River. During that time, authorities stated, “developing the abundant hydropower resources of western China is a necessary choice for the economic and social development of the country” (Magee 2006a, p64). In June 1988 and April 1991, two meetings between the Guangdong and Yunnan electric power authorities, and government planners from Beijing, created the “Two Provinces, Four Sides

Agreement” (兩省四方協議). The agreement called for cooperation between Yunnan, Guangdong, and central power authorities to make Yunnan – specifically through the construction of the Xiaowan and later the Nuozhadu dams – into a key electricity

producing base for sending electricity to south-central China (Guangdong) (Magee 2006a;

China News 2009). The transfer did not begin until June 1993 by the then Yunnan

Electric Power Group, when the first seasonal electricity from Yunnan to Guangdong was sent (Magee 2006a).

After the launch of the Western Development Campaign in 2000 (described below), the transfer project was prioritized among the second set of major projects in 2001 (Magee 2006a, 2006b; China News 2009). According to Peng (2004), by the

beginning of 2004 Yunnan had increased generation capacity dedicated to Guangdong by 500% since 1993, from 300 MW to 1,800 MW. Over that ten year period, among the five provinces in the China Southern Power Grid (Yunnan, Guizhou, Guangxi, Hainan, and Guangdong), Yunnan accounted for 40% of the sales to Guangdong over the 10^th

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year plan (FYP) (2001-2005). Indeed, the dams of the Upper Mekong (Lancang) cascade were singled out as specific and necessary components of campaign, with the 1350 MW Dachaoshan called a “strong solider” in the “army of power plants” providing electricity for the program (Chen 2003), along with justifications for the Xiaowan dam being based on the Guangdong electricity market (Yang 2001; Magee 2006a). Indeed, Guangdong province alone invested roughly 35 million RMB in preliminary planning and design work for the Xiaowan dam and Changzhou hydropower station in Guangxi (Pang 2001;

Magee 2006a).

China’s domestic energy needs, especially those of the large economic center of Guangdong, provided a clear incentive for the authorities in Yunnan, Guangdong, and Beijing to address the electricity needs of the region. Magee (2006a, 2006b, 2011), suggests that beyond the desire to helped the relatively impoverished Yunnan develop, and to provide Guangdong with a needed electricity, central authorities in Beijing may have sought to make the provinces more reliant on one another. Guangdong has spent significant amount of time securing electricity transfer agreements southwestern

provinces, both investing the most money in the program and likewise being the greatest recipient of regional electricity exports (Magee 2006a). Indeed, the province receives roughly 30-40% of its electricity from outside the province, 10% of which derives from the program (Magee 2006a, 2006b). As Yunnan has become other sole net exporters of electricity in the region, it is clear that the province became a major focus of Guangdong province. With the completion of the Xiaowan in 2010, power dedicated to Guangdong from Yunnan reached roughly 10,000 MW, further confirmed Yunnan’s role as a “battery”

for southeast China, a concept seen again in Yunnan’s role as an integrative force with southeast Asia, described below.

The problem stream of development and energy needs in southeast China provided a strong incentive by all the governmental bodies involved – Yunnan, Guangdong, and Beijing – to use Yunnan’s vast hydropower potential to address the problem. Decision-makers in all three areas quickly created and enhanced the “Send Western Electricity East” policy as a rather direct policy stream solution. Hydropower, as seen several times below, fell into a very receptive and encouraging politics stream in which the energy source was viewed nearly as a “win-win” situation for both Yunnan and

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Guangdong. As will be further supported below, large-hydropower projects a number of times fell in line with developmental goals of the central government, even despite changes to strategies and course changes.

Map 3: A nation-wide map from the electricity transfers from western China to eastern China via large transmissions lines

(Source: Henning et al 2013, 588)

range of climatic settings, this region is one of the core areas around the world for hydropower development.

China's hydro bases are well suited for cascade and stage development of river basins. Considering that potential with other parameters, like submergence, related costs of relocation, con-struction costs of dams and transmission lines, etc. China has given priority in the early surveys to developing the Yellow River, the upper Yangtze, the Hongshui and the Wu rivers. In later surveys, as well as in the context of China's ambitious Western Development Program, the following rivers were favoured: Jinsha/upper part of Yangtze, Lancang/Mekong, Dadu, Yalong and Nu/Salween. In early

2011 China officially announced ideas of developing the Yarlung Tsangpo as one of the country's largest hydropower bases.

One challenge of hydropower development is the uneven intra-and inter-annual runoff distribution, which causes large differ-ences between the rainy and dry seasons. This results in a large quantity of non-beneficial spillage during the rainy season and deficient generation in the dry season. In that period, hydropower must be supplemented, mainly by thermal power. To reduce this discrepancy, China invests large sums in the construction of pumped storage systems. Compared to large scale hydropower stations, the large scale pumped storage projects are mainly Fig. 3. China's hydropower development (2013): large hydropower bases (including potential of the base and mega hydropower projects 4500 MW) and small hydropower bases and major UHVDC transmission lines related to hydropower.

T. Hennig et al. / Renewable and Sustainable Energy Reviews 27 (2013) 585–595 588

  89   1.2 Regional Disparities and Poverty Alleviation

In terms of policy initiatives, few others have done more to shape development in Yunnan and more broadly domestic development discourse than the Western

Development Campaign. While the campaign officially began shortly after its

proclamation in 2000 as a centerpiece of the 10^th FYP (2001-2005), the idea of western fuels to fuel eastern development began in 1986 with an influential book “The Poverty of Plenty” by two economic think-tank researchers in Beijing (Magee 2006a), which was followed by a “Demonstration Project for East-West Township Enterprise Cooperation”

involving exchanges between cadres from eastern, central, and western China (Magee 2006a, 2006b). Despite criticisms that disagree with the development claims that the campaign is misguided (Wang 2004) or an attempt to institutionalize and legitimize existing resource extraction (Goodman 2004), the campaign also represents a genuine effort by the central government to address the drastic wealth and development gap between eastern and western China (Galipeau et al 2013). The campaign pushes to alleviate the poverty of western China through various programs investing in education, afforestation, new urban centers, and infrastructure projects such as railways, factories, and electric power facilities, especially hydropower stations (Magee 2011). The

secondary objective is to address what Tilt (2010) referred to as the “nationalities”

problem. Generally speaking, China’s minority populations, primarily residing in western China, suffer from lower economic prosperity and marginalization than the majority Han people (Galipeau et al 2013). The “Western Development Campaign” is a means

intended to better their economic status through large-scale infrastructure development and natural resource development.

Within Yunnan itself, hydropower development takes places largely in Yunnan’s relatively inaccessible and quite poor areas of rugged, steep, and narrow gorges with the greatest hydropower potential. Given the relative isolation of the communities near the hydropower stations, the road networks required for construction provide access to mining and logging operations are described as poverty alleviation projects for the nearby communities (Magee 2011). In practice this is not always the case, as the construction skills needed for the dams are frequently supplied by migrant labor, while the completed

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dams required highly technical skill sets that the local labor force do not have (Magee 2011; Galipeau et al 2013). The electricity generated at these dams are not distributed locally, but rather sent along “dedicated high-voltage lines to load centers in provinces eastward” (Magee 2011, 182).

One of the first “10 great projects” of the Western Development Campaign was the Zipingpu water resources development project, an installation aimed at both flood control and power generation for the Chengdu, Sichuan. By this time the Lancang dam had already begun to be constructed (the Manwan and Dachaoshan already completed), but this does demonstrate the central governments commitment to hydropower as a key means of economic development of China’s interior regions. While the government seems to have no consensus on the best macro-economic policies to use to develop the west, a relatively consistent notion remains of using the abundant natural resources of the western regions to boost the economic development of the eastern provinces (Magee 2006a; Mertha 2008). The desire of the government to develop the west also requires massive investment capacity that the government sometimes cannot fulfill. For hydropower companies, this has given further incentive to using large hydropower projects as a means of fund raising for the company.

Within the context of the policy streams framework, the policy stream quickly developed out of a push from the central government, followed by multi-provincial meetings testing possible courses for the campaign. The central government’s persistent policy of development and modernization, along with the desire to create interprovincial reliance between Yunnan and Guangdong (Magee 2006a), likely drove the central government to push for these hydropower centers within Yunnan (problem stream). As will be discussed below, the corporatization and reforms of China’s power industry drove and Yunnan’s desire for greater development drove a need to find more funding sources through hydropower development. This further solidified hydropower within all three politics streams a given component of the entire development scheme, although criticized by some academics. Indeed, from the beginning engineers within the hydropower

companies and in Yunnan’s provincial government clearly had a desire to make hydropower a “pillar industry” within Yunnan, especially in terms of fund raising for both entities (Magee 2006a, 2006b, 2011).

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1.3 Integration with the Greater Mekong Sub-region (GMS)

Among the several policies shaping Yunnan hydropower development, the “Send Yunnan Electricity Outward” (雲電外送) and the broader policy slogan of “Go

Outwards” (走出去) embodies this description of Yunnan as a clean energy base for both China and the region; creating relief of electricity shortages in Southeast Asia in

exchange for money. This functions as one of the principle areas targeted for cooperation in the Greater Mekong Sub-region (GMS) – made up of Yunnan province, Laos,

Thailand, Burma, and Thailand. As early as the 1980s the Yunnan Electric Power Group identified Thailand as a potential market for Yunnan energy (Yang 1998). An initial agreement between Hydrolancang and the Electricity Generating Authority of Thailand (EGAT) developed a joint development agreement of the Jinghong, and later after renegotiations follow the Asian currency crisis, the Nuozhadu dam along with a the construction of a 500-kV transmission line from Yunnan to Thailand via Laos (Magee 2011). Yunnan electricity has also already been sent to Vietnam, with a transfer agreement of 200 kWh sold annually for roughly US $7 million, with amounts limited only by grid capacity (rather than generation capacity) (Magee 2006b). This issue has been addressed by on-going grid improvements in Vietnam, promising further electricity sales (Magee 2011). In the mid-2000s, these large sales to Guangdong and Southeast Asia occurred during rolling blackouts in Yunnan province, suggesting that the cascade in large part is primarily a means of capital accumulation for the China Southern Power Grid company, further evidenced by the company’s plans in the 11^th FYP to expand infrastructure in southeast Asia (Chen 2005).

In addition, the Asian Development Bank (ADB) created the office of the Greater Mekong Sub-region (GMS) in 1992, with the expressed goal of enhancing “sub-regional”

infrastructure such as transportation, communication and electric power networks (ADB 2002). The GMS office consists of Vietnam, Cambodia, Laos, Thailand, Myanmar, and Yunnan province (it does not include the Lancang-Mekong headwaters of located in the Tibetan Autonomous Region). According to the GMS, the Lancang-Mekong, Yunnan

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may function as a “battery” for regional power needs and development, and indeed resonates with broad Chinese development policy (Magee 2006a).

The problem stream of this section seems for the central government to be a means of integrating China into Southeast Asia, while addressing regional development issues. The policy stream remains largely as stated above, in a general trend of using Yunnan as a regional “battery” of sorts (both domestically and internationally) to spur both development (again, domestically and internationally) and funding acquisition.

Therefore, the policy stream followed the similar trend of the “Send Western Electricity East” campaign, securing contracts and moving forward. Within the politics stream, this movement for regional development likely derived out restructuring China’s domestic power companies, further driving them towards independent fund-raising projects. This, along with the emerging concept of the GMS, seems to have created a specific

cooperation framework based on regional development between China and the rest of Southeast Asia.

1.4 Climate Change, Scientific Development, and Low-Carbon Development

Climate change mitigation, and the related and more recent “low-carbon development”, as a policy stream is arguably an important victory for epistemic

communities (ECs), both international and domestic, that fought for China’s government to seriously address the issue. The International Panel on Climate Change (IPCC) is one such EC (Wang and Tuo 2012). China has a clear desire to maintain current and future domestic growth as a means of poverty alleviation and governmental legitimacy (Wang and Tuo 2012). That said, the government understands the environmental impacts

associated with climate change and current development models, and is actively trying to address the issue. Wang and Tuo describe China’s greater participation in climate talks as motivated by international pressure to lower their significant current and future

contribution to climate change, its pursuit of a reputation as a large responsible country, and from the pressures of international and domestic epistemic communities.

Generally speaking, China’s involvement in the climate negotiations and related domestic policies can be divided into three stages: from the 1970s until the Kyoto

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Conference in 1997; from the Kyoto conference to 2007; the third stage from 2007 to

Conference in 1997; from the Kyoto conference to 2007; the third stage from 2007 to