across it and think that Sinohydro's remarks are very interesting]
China's Sinohydro says hydropower growth likely to fall in Asia on
11 November 2010
Global Power Report
The construction of hydropower plants in Asia is likely to slow down as
governments and communities become more environmentally conscious, Huang
Baodong, vice president at China's state-owned hydropower developer
Sinohydro Ltd., said in an interview.
"Hydropower development is likely to go down while solar power
development is likely to go up," Huang said.
Many communities in Asia are opposing hydropower developments because
such projects cause the displacement of large sections of the population
and affect the natural flow of rivers considered holy or life-supporting.
On the other hand, the steady fall in the raw material prices and the
cost of technology are encouraging many Asian countries to develop solar
power projects, Huang said. China, India and Thailand are among the
Asian countries that have announced special incentives and higher
tariffs to develop solar power.
But these factors are not likely to curb Sinohydro, which is developing
hydropower projects in countries ranging from Iran in Asia and Kenya in
Africa to Argentina in South America.
Huang said the company plans to bid for hydropower projects totaling
10,000 MW in Asia and Africa over the next five years. So far, Sinohydro
has built hydropower plants totaling 5,000 MW outside of China. Most of
those projects are owned by local generators and Sinohydro is usually
the engineering, procurement and construction contractor.
Sinohydro's overseas business contributes to over 50% of the company's
total revenue. Sinohydro's overseas business involves construction of
hydropower projects, roads, bridges and buildings. Hydropower projects
have a 33% share of its overseas business. In 2009, Sinohydro's revenue
was $11 billion while net profit was $350 million. Sinohydro's shares
are not listed, and the company did not provide further details on its
Huang said although the overall share of hydropower in Asia's total
installed capacity may fall in the future with development of other
renewable energy projects, hydropower projects would continue to be
built because the full potential of the rivers in Asia has not been
exploited. Huang said Asia has developed only 22% of its total potential
but did not provide details in terms of megawatts.
Huang said hydropower projects would continue to be developed because
such projects are also used to regulate and manage the flow of river
water for irrigation and drinking purposes. "Hydropower projects should
not be seen in isolation but as integrated water management programs,"
Huang also said in many countries in Asia, hydropower is the main source
of developing large scale and sustainable renewable energy projects.
"The economies of scale are available in hydropower while the existing
technologies enable the construction of only small and medium sized wind
power and solar power projects," Huang said.
Huang said the opposition to hydropower projects around the world has
made the company more cautious while bidding for projects. "We now bid
for projects which have the approval of either the World Bank or the
Asian Development Bank," Huang said.
He said the company is also now more sensitive to local employment and
racial issues while developing hydropower projects overseas.
There have been protests against Chinese companies in Asia and Africa on
the grounds that they were exporting labor from China and exploiting the
foreign country's natural resources.
Huang admitted that the 2008 global financial crisis adversely affected
the company's overseas power building business. "Many developing
countries are facing cash flow problems, and this has created a distinct
Huang said China offers the maximum growth in hydropower in Asia. The
Chinese government has set a target of building hydropower capacities of
300 GW in 2020 while the country's potential is around 700 GW, Huang said.
At present, hydropower contributes to 22% of China's installed capacity
of 874 GW.
In China Sinohydro owns power plants totaling 20,000 MW and has built
hydropower plants totaling 90,000 MW.
After China, India has the second highest potential for hydropower.
Huang said Sinohydro has developed some irrigation projects in India but
did not provide further details. He said the company is interested in
bidding for hydropower projects in India.
In the rest of Asia, Huang said Myanmar and Laos have rich potential for
hydropower. In Laos, Sinohydro is building the 126-MW Nam Khan-2
hydropower project and in Myanmar the 790-MW Yeywa hydropower project.
The first 197.5-MW unit of the Yeywa project started generation in early
Huang said Africa remains a key market for Sinohydro because that
continent has also not fully developed its hydropower potential. At
present, African contributes to 44% of Sinohydro's overseas revenue
followed by Asia at 33%, Middle East at 22% and Americas at 1%.
Currently, Chinese companies, including Sinohydro, are building
hydropower projects totaling 5,635 MW in a dozen African countries.
Huang did not mention Sinohydro's share, but industry participants said
it could be more than 60%.
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