A new power boom from an unlikely source is taking hold across the globe. As oil and natural gas production increases capture headlines, global hydroelectric power generation is expanding at an historic rate.
Spurring this growth is the World Bank which has committed funds to dozens of global hydro projects in Africa, South Asia, and South East Asia according to a recent Washington Post article.
Funding for hydroelectric projects by the World Bank totaled some $12 billion dollars over the last ten years, an increase of 186% over the previous ten year period according to their website’s hydro project page.
The Democratic Republic of Congo has plans for a dam project at the mouth of the Congo River which would provide double the electrical output of the largest dam in the world, China’s Three Gorges Dam. The World Bank pledged its support of the project as early as 2009 as reported by International River Keepers.
The World Bank’s commitment of $840 million in funding for the Pakistani Tarbela Fourth Extension hydro project represents 90 percent of the total project cost. The Express Tribune reported in February that Pakistan recently awarded $312 million dollars of that funding to a German-Chinese consortium to provide mechanical works for the project.
The Bank’s stated impetus driving this investment is a renewed effort to provide clean energy to power some of the world’s poorest nations. But it seems that the underlying factors of the global hydro boom are more closely related to capital building as top economies such as China and Brazil are building hydro power at a frenzied pace.
Brazil, the world’s 7th largest economy, is in the process of planning and constructing thirty-four dams in an effort to provide 50% of that country’s energy from hydro electric sources. Water World Magazine describes a $15 billion dollar project nearing completion in 2016 featuring a dam wall that extends nearly a mile across the Madeira River powering 75 different turbines.
Included in the contract awarded to a domestic power consortium to construct and run the dams are agreements to ensure fixed, low cost power rates to the nation’s industrial and residential consumers.
The benefits of hydro power are that its relatively stable costs are easier to guarantee than fossil fuels more prone to volatile global pricing shifts. Despite recent and record global growth in wind and solar capacity, these sources are simply unable to provide the increasing needs of global industrial output.
At the head of both global industrial growth, and global hydropower construction is the Chinese. According to Charlton Lewis, Professor of Chinese Studies at Brooklyn College of the City University of New York, the internationally reknown Three Gorges Dam represents “only a fraction of China’s current dam program.”
In May 2014, the Chinese government approved another massive hydro project at a cost of four billion dollars which will have a 20 GW (gigawatt) capacity. The New York Times further indicates China’s intent to build three dozen significant hydroelectric projects in the coming years.
This unlikely energy boom is providing countless economic opportunities for international players as construction needs are massive. The Chinese awarded hundreds of millions of dollars in international contracts for the $30 billion dollar Three Gorges Dam which produces 22,500 MW (megawatt) of power.
French company Alstom provided eight of the massive turbines at a cost of $212 million dollars. GE and German conglomerate Siemans each provided six. Planning and design was provided by a Norwegian company. Other international corporations were tapped to provide tens of millions of dollars in resources according to Power Technology Magazine.
An additional 120,000 MW of hydro power is to be in place in China by 2020 according to Reuters with projects even larger than the Three Gorges. That same report indicates that an additional 70 GW will have been added in hydropower by 2015, up nearly 32% from 2010.
In addition to building dams at a rate never seen in history, China is also investing in international projects as well. In 2013, China’s Sinohydro Group captured a $1.65 billion contract from Uganda to build a hydro plant on the Nile River according to the World Economic Forum.
China Daily reported that the Gezhouba Group signed a joint deal with a Tanzanian company to build five hydro dams in that country capable of producing 2,450 megawatts. These Chinese funded African hydroprojects are aimed at bolstering African economic output from which China has a large stake.
China Daily also reported that last November, Chinese companies signed seven agreements with Tanzanian companies worth billions of dollars that include mineral resource and textile development.
As the U.S. debates its energy future in consideration of coal, fracking for oil and natural gas, and wind and solar production, hydropower has been largely ignored. The irony is that as the World Bank is leading record hydropower development, its largest shareholder, the United States, is not investing in domestic hydro additions. Virtually no significant hydroelectric additions to the U.S grid are planned for the coming decade.