As the basic pillar industry of the national economy, the hydropower industry is closely related to the development of the national economy and the change of industrial structure. At present, China’s hydropower industry is operating steadily on the whole, with an increase in hydropower installed capacity, an increase in hydropower generation, an increase in hydropower investment, and a slowdown in the growth of hydropower related enterprises. With the implementation of the national “energy conservation and emission reduction” policy, energy substitution and emission reduction have become China’s practical choice, and hydropower generation has become the first choice of renewable energy.
Hydroelectric power generation is a science and technology that studies the technical and economic issues such as engineering construction and production and operation of converting hydropower into electricity. The water energy used by hydropower is mainly the potential energy stored in the water body. In order to convert hydropower into electricity, different types of hydropower stations need to be built.
The realization of hydropower generation includes the construction of hydropower stations, and then the operation of hydropower generation. The midstream hydropower industry will connect the power to the downstream power grid industry to achieve online access. The construction of the hydropower station includes the preliminary engineering consultation planning, the procurement of various equipment of the hydropower station and the final construction. The composition of industries in the middle and lower reaches is relatively simple and stable.
With the advancement 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 is highly valued by governments at all levels and supported by national industrial policies. The state has successively issued a number of policies to support the development of the hydropower industry. Industrial policies such as the Implementation Plan for Solving the Problem of Water Abandonment, Wind Abandonment and Light Abandonment, the Notice on Establishing and Improving the Security Mechanism for the Consumption of Renewable Energy Power, and the Implementation Plan for the Public Administration Work of the Ministry of Water Resources in 2021 provide a broad market prospect for the development of the hydropower industry and a good production and operation environment for enterprises.
In-depth analysis of hydropower industry
Enterprise investigation shows that in recent years, China’s installed capacity of hydropower has increased year by year, from 333 million kilowatts in 2016 to 370 million kilowatts in 2020, with a compound annual growth rate of 2.7%. According to the latest data, the installed capacity of hydropower in China will reach 391 million kilowatts in 2021 (including 36 million kilowatts of pumped storage), an increase of 5.6% year on year.
In recent years, the number of hydropower related enterprises registered in China has increased rapidly, from 198000 in 2016 to 539000 in 2019, with a compound annual growth rate of 39.6%. In 2020, the growth rate of hydropower related enterprises registered slowed down and declined. The latest data shows that in 2021, China’s hydropower related enterprises registered a total of 483000, down 7.3% year on year.
From the distribution of installed capacity, by the end of 2021, China’s largest province of hydropower generation is Sichuan Province, with the installed capacity of 88.87 million kilowatts, followed by Yunnan Province, with the installed capacity of 78.2 million kilowatts; The second to tenth provinces are Hubei, Guizhou, Guangxi, Guangdong, Hunan, Fujian, Zhejiang and Qinghai, with installed capacity ranging from 10 to 40 million kilowatts.
In terms of power generation, Sichuan will have the largest hydropower generation in 2021, with 353.14 billion kWh of hydropower generation, accounting for 26.37%; Secondly, the hydropower generation in Yunnan is 271.63 billion kWh, accounting for 20.29%; Thirdly, the hydropower generation in Hubei is 153.15 billion kWh, accounting for 11.44%.
From the perspective of the installed capacity of China’s hydropower industry, Changjiang Electric Power is the largest single hydropower installed capacity enterprise. In 2021, the installed capacity of Changjiang Electric Power will account for more than 11% of the country, and the total installed capacity of hydropower under the five power generation groups will account for about one third of the country; From the perspective of hydropower generation, in 2021, the power generation of the Yangtze River will account for more than 15%, and the hydropower generation of the five power generation groups will account for about 20% of the country. From the perspective of market concentration, the total of China’s five hydropower installed capacity groups and Yangtze Power is close to half of the market share; Hydropower generation accounts for more than 30% of the country’s total, and the industry concentration is high.
According to the in-depth analysis and development prospect forecast report of China’s hydropower industry in 2022-2027 by China Research Institute of Industry
China’s hydropower industry is dominated by state-owned monopoly. In addition to the five major power generation groups, China’s hydropower business also has many excellent power generation enterprises. The enterprises outside the five major groups are represented by Yangtze Power, which is the largest single hydropower installed capacity enterprise. According to the share of hydropower installed capacity, the competitive echelon of China’s hydropower industry can be roughly divided into two echelons, with five major groups and Yangtze Power in the first echelon.
Development prospect of hydropower industry
In the context of global warming and the depletion of fossil energy, the development and utilization of renewable energy has increasingly attracted the attention of the international community, and the vigorous development of renewable energy has become the consensus of all countries in the world. Hydropower is a clean and renewable energy with mature technology and can be developed on a large scale. China’s hydropower resources reserve ranks 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 to running and leading. With the rapid development of science and technology, China’s hydropower units and the majority of hydropower science and technology workers, relying on artificial intelligence, big data and other cutting-edge technologies, have effectively guaranteed the construction quality and dam safety.
During the 14th Five-Year Plan period, China has made clear the deadline for achieving the goals of carbon peak and carbon neutrality, which makes many energy types feel the opportunity and pressure coming at the same time. As the representative of renewable energy, hydropower will continue to promote the development of hydropower in the context of global climate and energy depletion, and the sustainable development demand of energy structure optimization.
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 hydropower industry, strengthen and optimize 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: Jan-12-2023
