China Domestic - WB banking China hydropower

WSJ World Bank Gives China Measured Praise on Green Energy
By SIMON HALL
24 November 2010
Dow Jones Chinese Financial Wire
http://online.wsj.com/article/SB10001424052748703904804575631801480561806.html

BEIJING - China is making progress in meeting targets to get 15% of its energy from non-fossil fuels by 2020, but it needs to improve and expand hydropower generation and deal with inefficiency in its wind-power sector, the World Bank said Tuesday.

The bank said in a report that China should improve interprovincial trade in renewable energy and better promote green electricity schemes.

"China has achieved remarkable progress in developing renewable energy during the last three decades," Ede Ijjasz, World Bank China Sector Manager for Sustainable Development, said in a statement accompanying the report.

China is already planning a massive expansion of its hydroelectric power sector in its 12th five-year plan, which starts in 2011, despite worries that such schemes can cause environmental and social problems.

Its rapidly growing wind sector is also struggling due to a lack of connections to the country's electricity grid: At the end of 2009, 30% of China's wind farms weren't grid-connected, according to the National Energy Administration.

This is a major problem for China, which is planning a fivefold increase in wind-power generating capacity to 200 gigawatts in 2020 from 34 gigawatts in mid-2010.

"Hydropower rehabilitation and more rapid and environmentally and socially sound development could achieve the [15%] target at a lower cost because hydropower is already competitive with coal," the report said. "Developing hydropower more quickly would allow for increasing the renewable energy target without increasing the incremental cost of the program."

Under plans the government is finalizing, hydropower's share of the national energy mix, currently around 10%, will rise to as much as 18% of China's energy needs by 2020, Xinhua News Agency recently reported. By 2030 this could increase to up to 24% of the total, it said.

China is home to the world's biggest hydroelectric project - the $23 billion Three Gorges Dam on the Yangtze River, completed in 2006 to end centuries of devastating annual floods and to provide energy to fuel China's economic boom.

Critics have long argued that the dam was too expensive, unnecessarily forced 1.4 million people from their homes, increased the risk of landslides and caused serious damage to the Yangtze River's ecology.

Similar concerns have been raised about several new major dams, including a controversial $1.2 billion project under way to build the world's highest dam in Tibet, on the Yarlung Zangbo River, 325 kilometers southeast of Lhasa. It is due to be completed in 2014.

Another project with recent government approval is the $3.3 billion, 2,600-MW Changheba Hydropower plan in China's Sichuan province, to be built by Datang International Power Generation Co.

The World Bank warned that China's wind-power programs were in danger of being blown off course.

"China's experience has been less than optimal in planning wind farms, operational integration and coordination between developers and grid operators," it said. "If not addressed adequately, the high level of inefficiencies could increase the cost to the nation of the envisaged wind program, which could become prohibitive."
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