China power crunch to worsen as drought slashes hydro

BEIJING (Reuters) - The worst drought to hit central China in half a century has brought water levels in some of the country's biggest hydropower producing regions to critical levels and could exacerbate electricity shortages over the summer.

The official Xinhua news agency said on Wednesday that the water level at the world's biggest hydropower plant at the Three Gorges Dam in Hubei province has fallen to 152.7 meters, well below the 156-m mark required to run its 26 turbines effectively.

Total capacity at the Three Gorges hydropower project amounts to 18.2 gigawatts, the equivalent of about 15 third-generation nuclear reactors and more than a third of Hubei's total. It generated 84.4 billion kilowatt-hours of electricity in 2010, delivering power as far afield as Shanghai on the eastern coast.

The water level is expected to fall further to around 145 meters by June 10, when planned discharges are scheduled to end.

The drought has struck at the time of year when China's hydropower output would normally surge. Hydro output bottoms out in January and February and peaks over the summer. During six months of last year, from May to October, 20 percent of China's electricity generation was hydropower.

High temperatures and record low rainfall in 2011 have caused water levels on the middle and lower reaches of the Yangtze River to dwindle, cutting support to thousands of hydropower plants as well as millions of hectares of farmland.

Official figures from Hubei province earlier this week showed that 1,392 reservoirs in the region are now too depleted to generate any electricity at all.

Water levels on the Yangtze midstream are 6 meters lower than they were the same time last year, with rainfall only a fifth of the levels seen in 2010, according to the China Daily newspaper, quoting local drought relief agencies.

China's meteorological administration said on Wednesday that average rainfall in Anhui, Jiangsu, Hunan, Hubei, Jiangxi, Zhejiang and Shanghai is the lowest since 1954.

The Three Gorges reservoir has already released more than 17 billion cubic meters of water downstream, and analysts expressed hope that the move will ease the problems facing downstream rice planters in Hubei and elsewhere.

The affected provinces of Hubei, Hunan, Jiangxi, Anhui and Jiangsu together accounted for 47 percent of China's total rice output in 2010, according to China's Agricultural Yearbook.

"With the Three Gorges Dam now releasing water to downstream provinces, the drought will be eased to some extent and it may not cause any damage to the early rice harvest," said Ma Wenfeng, an analyst with Beijing Orient Agribuiness Consulting Co.

China is such a large country that virtually every year some part of it is hit by disastrous droughts or floods, many of them caused by fluctuations in the Yangtze, the country's longest river stretching from Tibet to Shanghai.

Nearly 10 million people, mainly in the Yangtze farming heartlands, have been affected by the 200-day drought so far, and several Jiangxi tributaries normally used by fishermen in rowing boats have now completely dried up, China Daily reported.

The early harvest usually accounts for only a fifth of total annual rice output, he said, adding that some planters might have delayed their activities until the second mid-year harvest beginning in June, when the rain season begins.

POWER DEFICIT

The release of water from the Three Gorges and thousands of other reservoirs in the region might help beleaguered local farmers, but it could be bad news for industries dependent on hydropower supplies.

"Fundamentally there is a conflict between hydropower generation and water supply, irrigation, and navigation," said Ma Jun, of the Institute of Public and Environmental Affairs (IPEA), a non-government organization that monitors China's rivers.

China is facing historically high power shortages as the summer consumption peak approaches, and lower water flows in major hydropower producing regions like Hubei and Hunan are expected to put more pressure on coal and diesel supplies as they search for alternative sources of fuel.

PetroChina has already supplied 18.6 percent more diesel than a year earlier to Hubei to help the province combat the drought, its parent CNPC said in a company newspaper on Wednesday.

Hydropower utilization rates in Hunan fell 55 percent in April, according to analysts from Dongfang Securities, and traders said the impact was already being felt by local industry.

"By yesterday almost half of all silicon-making facilities (in Hunan) had been suspended because of the lack of electricity," said a Shanghai-based trader.

Aluminum and copper smelters in the region could also suffer, especially if scarce coal supplies are diverted to meet residential power needs, another trader said.

Hydropower will be a crucial component in China's energy strategy in the coming decade as it tries to reduce its dependence on coal, and plans are under way to put an additional 140 GW of capacity under construction by 2015.

But the drought has drawn attention to the impact that big dam construction programs have had on China's river systems, including the Yangtze and its tributaries.

Government experts have rejected widespread claims that the Three Gorges reservoir has worsened the risk of drought in the region, saying that the current crisis has been caused by unfavorable global weather patterns.

But Ma of IPEA said the 600 sq km reservoir has disrupted water flows and made it harder to supply downstream regions.

"Without the Three Gorges Dam, the water level in the Yangtze would not be that low," he noted.

(Additional reporting by Niu Shuping in Beijing and Ruby Lian in Shanghai; Editing by Ken Wills)