I didn't know you were here too godfree....

Thanks for the thread of comments re my interview with GoKunming yesterday. Very useful.

I think one of the problems of the over buildout of hydropower in Yunnan is that it's drawn many new polluting industries to Yunnan province and having a major effect on the environment and provincial economy. Since Yunnan's excess hydropower can't be sent into China's grid for reasons I'll discuss below, Yunnan's hydropower developers gang up with the provincial government to attract outside heavy industry investors to build big plants all over the province - given the low overhead electricity costs. This is taking a toll on the province's mountains and rivers (where waste is dumped into).

Originally the plan for Yunnan's hydropower was to find a way the power market in Guangzhou, but Guangzhou's politicians would rather buy power produced from its local thermal coal plants to keep up provincial GDP growth and also keep employment rates up. Those coal plants need thousands of workers where a hydropower plant - even a huge megadam like Baihetan - can be run with less than 100 people.

Another problem is power purchase agreements. In most developing countries where assets need to perform over a long period of time, dam operators lock in a long term power purchasing agreement for say 20-30 years which guarantees a stream of income and pays of the debt related to the dam. In China, however, and this is only a recent change, power purchase agreements are signed on a year to year basis which means dams or other power plants really rely on their competitiveness to keep afloat. Hydropower is cheap, but China's grid congestion jacks of the price of Yunnan's hydropower for end users on the coast, so they aren't buying.

Just a few more insights into the problem. Happy to continue the discussion.