As China pivots to renewable energy to reduce its greenhouse emissions and position itself as a major energy exporter, hydropower continues to be the foundation of their energy transition. In 2017, the country added 9.12 GW of installed capacity bringing its total to 341 GW, having also contributed to nearly 20 per cent of the total electricity generated, far outstripping wind (5 per cent) and solar (2 per cent).
Since the turn of the century, China’s development of its hydropower resources has been nothing short of remarkable. The country has more than quadrupled its installed capacity and accounted for over half of global hydropower growth, with much of the growth taking place in the country’s southwest.
While development has slowed since its most recent peak in 2014 when over 30 GW was commissioned, average annual growth in installed capacity is expected to remain steady at between 3.5 and 4 per cent to 2020 in order to achieve the government’s 13th Five-Year Plan target of 380 GW. Notable projects commissioned in 2017 included Changheba (2,600 MW), Houziyan (1,700 MW) and Miaowei (700 MW).
China Three Gorges Corporation (CTG) announced in August 2017 that the 16 GW Baihetan plant commenced construction. Situated on the lower reaches of the Jinsha River along the border between the Sichuan and Yunnan provinces, once complete in 2023 Baihetan will be the second largest in the world in terms of installed capacity behind CTG’s 22.5 GW Three Gorges plant.
Pumped hydropower storage is playing an increasingly important role in China’s electricity market. It is seen as a key priority of the government in order to support the increasing penetration of both intermittent wind and solar. Installed capacity is set to reach at least 40 GW by 2020 from its current 28.49 GW, and with 60 GW either under construction or in the planning stages, the National Energy Administration expects pumped hydropower capacity to total 90 GW by 2025.
In 2017, 1.8 GW of pumped storage was commissioned including Liyang (1,500 MW) and Shenzhen (300 MW, first unit), while the State Grid Corporation of China announced construction of a further six pumped storage projects. Spread throughout the country, these projects have a combined installed capacity of 8.4 GW and are expected to be fully operational in 2026.
In December 2017, the government announced that the first phase of its long awaited emissions trading scheme (ETS) would focus on the power sector, covering roughly 3.5 billion tonnes of CO2 – almost double the size of the European Union ETS. The scheme is expected to be up and running in 2019 but, as the government is yet to publish the scheme’s targets, it remains unclear what price signal it will send to the sector and how it will impact hydropower as a low-carbon source of electricity.
China is emerging as a leader in green finance as a means to reach its ambitious climate and energy goals. With green bond issuances over USD 37 billion in 2017, this market is expected to be a major source of finance for hydropower into the future, particularly as internationally recognised eligibility standards for green bonds are developed and gain acceptance.
This country profile is featured in the 2018 Hydropower Status Report. You can download the full report here.
This profile was last updated in June 2018.