China's Dams

Henan dam fails to find customers

South China Morning Post
May 14, 2006

China’s US$4 billion (HK$31 billion) dam in Henan province across the Yellow River has been unable to find customers for its electricity, according to its vice-general manager, Wang Xianwu.

Beijing – China’s US$4 billion (HK$31 billion) dam in Henan province across the Yellow River has been unable to find customers for its electricity, according to its vice-general manager, Wang Xianwu. “We haven’t been able to negotiate a contract. There’s an oversupply of electricity and we cannot agree on a price,” he said. The massive Xiaolangdi project, backed with US$1 billion in loans from the World Bank, is largely designed to trap sediment and control flooding in the middle and lower reaches. Mr Wang admitted that electricity generation and flood control were conflicting aims. Although the first two generators could have begun operating earlier this year, the start of electricity generation was delayed by three months. The reservoir had to be emptied to provide water downstream in the middle of a major drought that has hit Shandong province and other parts of the region. Shandong this year had its worst drought since 1916. The amount of rainwater running into the river is now a third of what it was in the 1980s. Last year, the river failed to reach the sea for 200 days, compared to 110 days in 1995. Despite the growing pressure on water resources, plans have been announced to divert more Yellow River water, this time to solve the drastic water shortages affecting Tianjin. Xiaolangdi, one of 12 dams already built on the Yellow River, failed to prevent serious flooding this summer. Henan province reported losses of nearly eight billion yuan (HK$7.5 billion), with damage to 215,000 houses and the inundation of millions of hectares of land. The province said 22 million people in 15 cities were affected by this year’s floods. The economic viability of the dam, which has presented difficult engineering challenges and the import of costly equipment and know-how, is threatened by an electricity glut. Henan is trying to close many of its small coal-mines and has no need of extra generating capacity to supplement its coal-fired power-stations.

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