The hydropower industry, as a fundamental pillar industry of the national economy, is closely related to the development of the national economy and changes in industrial structure. At present, the overall operation of China’s hydropower industry is stable, with an increase in hydropower installed capacity, an increase in hydropower generation capacity, an increase in hydropower investment, and a slowdown in the growth rate of hydropower related enterprise registration. With the implementation of the national “energy conservation and emission reduction” policy, energy substitution and emission reduction have become a practical choice for China, and hydropower has become the preferred choice for renewable energy.
Hydroelectric power generation is a scientific technology that studies the technical and economic issues of engineering construction and production operation that convert water energy into electricity. The water energy utilized in hydroelectric power generation is mainly potential energy stored in water bodies. To achieve the conversion of hydropower into electricity, different types of hydropower stations need to be built.
The implementation of hydropower includes the construction of hydropower stations, and then the operation of hydropower. The midstream hydropower industry connects electricity to the downstream power grid industry to achieve grid connection. The construction work of a hydropower station includes preliminary engineering consulting and planning, procurement of various equipment for the hydropower station, and final construction. The composition of the midstream and downstream industries is relatively single, with a stable structure.
With the promotion of China’s economic growth, supply side reform and Economic restructuring, energy conservation, emission reduction and green growth have become the consensus of economic development. The hydropower industry has received high attention from governments at all levels and key support from national industrial policies. The country has successively introduced multiple policies to support the development of the hydroelectric power industry. Industrial policies such as the Implementation Plan for Solving the Problem of Water, Wind, and Light Abandonment, the Notice on Establishing and Improving the Renewable Energy Power Consumption Guarantee Mechanism, and the Implementation Plan for the 2021 Government Affairs Publicity Work of the Ministry of Water Resources have provided broad market prospects for the development of the hydroelectric power industry and a good production and operation environment for enterprises.
Deep analysis of the hydropower industry
According to enterprise investigations, in recent years, the installed capacity of hydropower in China has been increasing year by year, from 333 million kilowatts in 2016 to 370 million kilowatts in 2020, with a compound annual growth rate of 2.7%. The latest data shows that in 2021, the cumulative installed capacity of hydropower in China reached approximately 391 million kilowatts (including 36 million kilowatts of pumped storage), an increase of 5.6% year-on-year.
In recent years, the registration volume of hydropower related enterprises in China has grown rapidly, from 198000 in 2016 to 539000 in 2019, with an average annual compound growth rate of 39.6%. In 2020, the growth rate of hydropower related enterprise registration slowed down and decreased. The latest data shows that in 2021, there were a total of 483000 registered hydropower related enterprises in China, a year-on-year decrease of 7.3%.
From the distribution of installed capacity, as of the end of 2021, the province with the largest scale of hydroelectric power generation in China was Sichuan Province, with an installed capacity of 88.87 million kilowatts, followed by Yunnan with an installed capacity of 78.2 million kilowatts; The provinces ranked second to tenth are Hubei, Guizhou, Guangxi, Guangdong, Hunan, Fujian, Zhejiang, and Qinghai, with installed capacity ranging from 10 to 40 million kilowatts.
From the perspective of power generation, in 2021, the region with the highest hydroelectric power generation in China was Sichuan, with a hydroelectric power generation of 353.14 billion kilowatt hours, accounting for 26.37%; Secondly, the hydroelectric power generation in Yunnan region is 271.63 billion kilowatt hours, accounting for 20.29%; Once again, the hydroelectric power generation in Hubei region is 153.15 billion kilowatt hours, accounting for 11.44%.
From the perspective of the installed capacity of China’s hydropower industry, Changjiang Power is the largest enterprise in terms of individual hydropower installed capacity. In 2021, Changjiang Power’s hydropower installed capacity accounted for more than 11% of the country, and the total installed capacity of hydropower under the five major power generation groups accounted for about one-third of the country; From the perspective of hydroelectric power generation, in 2021, the proportion of Yangtze River electric power generation exceeded 15%, and the hydroelectric power generation under the five major power generation groups accounted for about 20% of the national total. From the perspective of market concentration ratio, the total of China’s five hydropower installed capacity groups and Yangtze River Power is close to half of the market share; Hydropower power generation accounts for more than 30% of the country, and the industry has a high concentration ratio.
According to the “2022-2027 China Hydroelectric Power Industry Deep Analysis and Development Prospects Prediction Report” by China Research Institute of Industry
China’s hydropower industry is mainly dominated by state-owned monopolies. In addition to the five major power generation groups, there are also many excellent power generation enterprises in China’s hydropower business. Enterprises outside the five major groups, represented by Yangtze Power, are the largest in terms of individual hydropower installed capacity. According to the share of hydropower installed capacity, the competitive echelon of China’s hydropower industry can be roughly divided into two echelons, with the five major groups and Yangtze Power ranking first.
Prospects for the Development of the Hydroelectric Power Industry
Against the backdrop of global warming and the increasing depletion of fossil fuels, the development and utilization of renewable energy are increasingly receiving attention from the international community, and vigorously developing renewable energy has become a consensus among countries around the world. Hydroelectric power generation is a clean and renewable energy source with mature technology that can be developed on a large scale. China’s hydropower resource reserves rank first in the world. Actively developing hydropower is not only an important way to effectively reduce greenhouse gas emissions, but also an important measure to address climate change, promote energy conservation and emission reduction, and achieve sustainable development.
After several generations of hydropower workers’ continuous struggle, reform and innovation, and bold practice, China’s hydropower industry has achieved a historic leap from small to large, from weak to strong, and from following and leading. With the rapid development of technology, various hydropower units and workers in China rely on cutting-edge technologies such as artificial intelligence and big data to effectively ensure construction quality and dam safety.
During the 14th Five Year Plan period, China defined the time limit for achieving the goals of carbon peaking and carbon neutrality, which made many energy types feel the opportunities and pressures coming at the same time. As a representative of renewable energy, hydropower, in the context of global climate and energy depletion, the sustainable development demand for optimizing energy structure will continue to drive the development of hydropower.
In the future, China should focus on key technologies such as intelligent construction, intelligent operation, and intelligent equipment of hydropower, actively promote the upgrading of the hydropower industry, strengthen, optimize, and expand clean energy, increase the development of hydropower and new energy, and continuously improve the level of intelligent construction and operation management of hydropower stations.
Post time: Apr-10-2023
