Three Gorges Probe

Three Gorges dam doubts all water under the bridge

South China Morning Post
September 11, 2002

China Yangtze Power’s Zhang Dingming says in an interview that the operation of the hydropower plant points to success on a grand scale.

For nearly two months this summer, Zhang Dingming complained of too little sleep and too many cigarettes. They were stressful days at China Yangtze Power, the operator of the Three Gorges Dam, as it underwent a programme to offload millions of yuan in non-tradable shares in the first stages of a central government reform scheme. Mr Zhang, a vice-general manager of the A-share company, was responsible for delivering a satisfactory result in what was a politically and market-sensitive exercise. It was made all the more precarious by Yangtze Power’s status as a State Council-backed company and the fact that it was trailblazing the scheme.

“During that period … [I] didn’t sleep much,” he recalls as he fishes for a cigarette. For two months through to August, Mr Zhang and his team travelled across the country to win over fund managers and investors for a compensation plan to float non-tradable shares. “Everyone … was looking at us to set a benchmark [for state enterprises]. The pressure was on us,” he says.

Yangtze Power is no newcomer to being in the spotlight; hydropower stations and dams in the mainland and abroad alike have come in for widespread and intense public condemnation on environmental grounds and the Three Gorges is the biggest of the big. The opposing voices have not waned even as 14 of the 26 turbine generators at the Three Gorges now churn out electricity and the mammoth project, which began in 1994, is more than half completed. Officials at Yangtze Power, controlled by China Yangtze Three Gorges, maintain a consistent line that the dam not only generates environment-friendly power to meet increasing demand, but is also fulfilling a responsibility in flood control. The latter claim has still to be proven.

In an interview with the China Business in Yichang city, where the Three Gorges Dam is located, Mr Zhang reaffirms this responsibility and dismisses reports speculating that Three Gorges risks repeating the problems that have been caused by the Sanmen Gorge Dam on the Yellow River. Prominent Chinese engineers have publicly blamed the Sanmen Gorge Dam, completed in 1961, for raising the bed of the Wei River – a major tributary of the Yellow River – leading to devastating floods in central China.

“We are still monitoring the silting … after all, the Three Gorges has only been in operation for a few years,” Mr Zhang says. “So far, what we have observed and recorded has been encouraging and it shouldn’t be like the situation at Sanmen Gorge and the Yellow River.”

Mr Zhang says that even though the environmental impact from dams can only be assessed after many years, the risk of problems developing should not deter planners from building more dams, particularly as Beijing deepens its commitment to encouraging the development of renewable energy. Yangtze Power is planning four more dams on the upper reaches of the Yangtze in the Jinsha River area of Yunnan province. Construction of the Xiangjiaba, Xiluodu, Baihetan and Wudongde dams will be undertaken by China Yangtze Three Gorges. When completed by 2020, the dams will have a combined capacity of 30,000 megawatts, or 60 per cent of the 18,200 MW installed capacity of the Three Gorges. Based on previous experience, Yangtze Power could acquire these assets from its parent.

Since 2002, the value of the company’s assets has ballooned from 9.9 billion yuan to 43.3 billion yuan under such an acquisition scheme. The company now operates the Gezhouba Dam and the Three Gorges Dam, which this year are expected to generate 65.7 million MW of electricity, which will be sold to the central regions and rich eastern cities as well as Guangdong province. The Three Gorges station alone could generate 50 million MW of electricity this year, enough to provide all the power needed by Beijing for a year. Mr Zhang predicts positive prospects for Yangtze Power based on its key position in a rapidly growing industry that has the support of the central government.

According to official forecasts, hydropower generation capacity nationwide will reach 150,000 MW in 2010, up from 100,000 MW at the end of last year. By 2020, the capacity is projected to reach 250,000 MW. For its part in power output, Yangtze Power showed a net profit of 2.57 billion yuan for the first nine months of this year, an 8.4 per cent increase on the same period last year. Earnings aside, Mr Zhang says Yangtze Power has demonstrated that the mainland is capable of developing and operating a massive hydropower station, from power generation to dealing with resettlement, silting and environmental issues.

Significantly, a few of the 700 MW turbine generators are manufactured in China. “We have built an image in the capital and power markets. We have shown we have the ability,” he says. So far, 100 billion yuan has been invested in the project, supported by a Three Gorges Fund established in 2003 that comprises central government funds and a small portion of electricity tariffs charged on consumers.

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