The May 12 earthquake in western China’s Sichuan province will have ripple effects far beyond China than Beijing is letting on. Sichuan province holds the key to China’s hydropower generation plans in its renewable energy targets and the area is also a hub for outsourced wind turbine equipment around the world. Both were badly damaged.
This infrastructure will take months or years to repair, but in the meantime, Chinese media reports that “the earthquake in dollar terms is minimal and seems unlikely to slow China’s economic growth much.” I am sorry I disagree.
This earthquake cracked dams and roads, but at the same time it blew holes in the myth that an ever-expanding China can host an infinite number of companies that want to open facilities there. We have been hiding behind a wall of reliance on outsourcing to solve our domestic pollution and economic problems, and that great wall is about to collapse.
The hydroelectric crutch: The earthquake zone area generated 62 percent of Sichuan province’s total electricity output through hydroelectric dams, of which “396 dams were believed to be severely damaged and many of the power plants Power lines in river systems have been damaged and several major reservoirs are being destroyed. drained to prevent their dams from failing. The seismic safety of these dams is a concern and many of them are expected to need repair and strengthening,” according to Minister of Water Resources Ministry Chen Lei.
Even before the earthquake, Beijing admitted that many of the country’s 87,000 dams are seriously flawed. “Approximately 37,000 dams across the country are in a dangerous state,” Vice Minister of the Ministry of Water Resources Jiao Yong said earlier this year, noting that many were built decades ago.
Two weeks after the earthquake, the Ministry of Water Resources acknowledged that 69 reservoirs and dams were on the verge of collapse and that nearly 3,000 across China were damaged.
If the always secretive central government is publishing this kind of information, I can only conclude that the reliable power of that region is no longer assured. This single set of facts revolving around hydropower production in western China is one link in a chain that stretches from China to your backyard, and that link has been broken.
Don’t count your renewable energy eggs before they hatch: China has more dams than any other country, about half the world total. And the 11th Five-Year Plan pins its hopes on rapidly and massively developing every meter of water flowing in the rivers of Yunnan, Sichuan and Gansu provinces in the west to meet the insatiable demand for energy for factories and homes. The Chinese government will now have to reconsider its aggressive dam-building program.
If hydroelectric projects are scrapped, there will be continuous and permanent power outages throughout the country. China’s hydroelectric consumption was around 7% of its total main energy consumed in 2007.
Before the earthquake, the central government was thinking: ‘Sichuan has the largest possible reserves of hydropower resources in the country, estimated at more than 110 gigawatts. Yunnan has a number of hydropower plants under construction on the lower and middle reaches of the Lancang River, with 11 GW and plans for dozens more projects between now and 2016. Gansu’s abundant Yellow River hydropower resources can provide electricity to neighboring provinces. from Qinghai, Shanxi, Sichuan and Ningxia, and its additional potential is excellent.’
Not anymore.
The China Electricity Council believes that less than 20 percent of the country’s hydropower resources are being used. According to the pre-earthquake government plan, the hydroelectric installed capacity should have reached 125 GW in 2010, which represents 28 percent of the total installed capacity; in 2015 it could have reached 150 GW and for 2020 the goal was 300 GW. These plans are not likely to go ahead as planned. This will leave China far behind its power generation targets and far short of the capacity it needs to attract manufacturers to that part of the country.
The Slow Decline: China’s Go West campaign is designed to attract college graduates and businesses to western parts of the country, thus stimulating the economy in China’s less prosperous hinterland.
The bait most often used by the central government is the Major Technological and Economic Development Zones, Special Economic Zones and City Industrial Zones, which grant tax-free status along with preferential transportation and wage deals. This is great when there is a continuous power supply, but now in the western region that is anything but guaranteed. China’s state power grid announced that the Sichuan power grid is operating at 76% of pre-earthquake levels. Notice how they conveniently leave out the surrounding provinces, which also took damage.
A recent article in the China Daily – “China expects power shortage amid rising demand” – quotes the general office of the State Electricity Regulatory Commission as saying that “Guangdong province would have less than 5 .5 GW, Guizhou 1 GW and Yunnan 1.5 GW”. Once again, they omitted shortages in Sichuan, Gansu, Inner Mongolia, Zhejiang, Jiangsu and Shanxi provinces to get a reliable total. This will be the fifth consecutive year of power shortages across the country. Now consider this: The last four years were short with all of the country’s hydroelectric power running.
This year, 10 GW of power is likely to be short, so keep an eye on the power rankings – “normal shortage”, “severe shortage” and “power crisis” – to see how your city or area is doing favorite industry.
It seems that there is a masking of the real numbers. What business would want to settle in a country with constant electricity deficits?
Devastation in Beichuan: Combine the electricity shortage with the number of factories that need to relocate now that fewer businesses will want to rebuild on an active fault line and the veil is starting to lift on what they’re hiding. Workers are refusing to return to work until government inspectors approve the integrity of the buildings, even though it may be months or years before they reach every company. The psychology of danger to the worker and the investor is the overlooked X factor in the Chinese equation. Now, how attractive are the Regional Development Zones in western China?
As for us who live outside of China, the norm is to outsource heavy industry to China. Even the global renewable energy sector has many of its wind turbines and solar panels produced in China. Unfortunately, Deyang, a city an hour and a half north of Chengdu, had wind turbine operations, including major ones in Europe, Australia, and North America, running some of their production at Dong Fang Turbine. In the same area there were also carbon fiber blade, wind tower and ball bearing operations that supplied parts to Dong Fang. Buildings around Deyang to Mianyang were heavily damaged or razed to the ground.
Business Week sums it up in an article titled “Dongfang Turbine Badly Hit.” The operations of Dongfang Turbine, China’s largest steam turbine producer and the country’s third largest wind turbine manufacturer, were virtually wiped out. Dongfang, which produces 30 percent of China’s locally manufactured turbines, estimates direct losses from the earthquake to be as high as $1 billion. Its parent company, Dongfang Electric Corp., has seen its share price plummet, as the steam turbine business accounted for 20% of its operating income in 2007.
Although Chinese media reports suggest that facilities for its wind turbine business were unaffected, sources inside the company said most of the senior engineers in its wind business have sadly passed away and one of its wind component factories suffered. serious damage.
The seismic triangle of electricity shortage: where does this leave us? Peak Oil is evident and can no longer be denied. We, as a world, must begin a transition to renewable energy and these circumstances will set China’s wind industry output back a year or two. China’s response to electricity shortages will be to build more coal-fired power plants. Given that outsourced production is now constrained by power outages and failures, what will our response be?
The seismic triangle of electricity shortage from Kunming in the west to Chongqing in the east and Lanzhou in the north with Chengdu in the center is sketchy territory as of now. The central government was funneling new business to this exact area because there is so little space along the eastern seaboard. That is why there is a massive push to send the economy west. If you have been to the coast of China, you will have seen how densely populated a society can be.
The price is the main reason why we buy Chinese products and we have our industries there. However, when something is scarce, it costs more. Electricity is no different. Now there are daily diesel shortages along the East Coast, electricity shortages in the West and along the coast. Add in the recently appreciated yuan and China is no longer the business utopia it once was. Until the damage in western China is repaired, the increased use of oil, natural gas and coal will to some extent replace hydropower. This in turn creates higher prices in China’s manufacturing sector. You will pay at the check-out counter.
Please understand: the rest of the world depends much less on China’s exports than China depends on the rest of the world. We need to prepare to take care of ourselves again. As oil prices continue to rise and the world economy declines, I think we will see a resurgence of light industry returning to our home countries. China’s electrical problems could be partially solved if light industry moved elsewhere and left heavy industry in China. Unemployment will become increasingly fierce in the coming years as our fossil fuel-based economy declines.
What a great way to put millions of people to work: bringing businesses back home. This will remove a link in the chain of dependency on globalization and save energy along the way.
