Energy Insider: Beijing Approves Mega Hydropower Dam in Tibet, Storage Industry Tackles Price Wars

In the latest Caixin energy wrap, several significant developments in China's climate and energy sectors are explored, including important projects, policy shifts, and industry dynamics. [para. 1]

A headline-grabbing project is China's planned construction of the largest hydropower dam in the world on the lower stretches of the Yarlung Tsangpo River in the Tibet autonomous region. Announced by the state-run news agency Xinhua on December 25, this project aims to contribute to China’s "dual carbon" goals and combat climate change. Expected to reach a total capacity of 70 gigawatts (GW), it will significantly surpass the Three Gorges Dam on the Yangtze River, currently the largest dam in existence. Construction is to be undertaken on a steep section of the river, which experiences a dramatic 2,000-meter drop in altitude over 50 kilometers. This massive infrastructure initiative is projected to generate around 300 terawatt-hours (TWh) of renewable energy annually, equating to about 3% of China’s total electricity consumption in 2024. While promising significant renewable energy output, the project has sparked concerns regarding environmental impact in the biodiverse region. Assurances have been provided by Chinese authorities that safety and environmental protection measures will be in place and that downstream regions of the river, including India and Bangladesh, will not be adversely affected. [para. 2][para. 3]

In another industry development, nearly 30 leading energy storage companies in China have pledged to cease engaging in price wars, which have been detrimental to market stability. The China Energy Storage Alliance (CNESA) reported that intense competition has led firms to sell their energy storage systems at a loss, disrupting market order and threatening sustainable growth. This move to end price wars follows guidance from a high-level economic meeting chaired by President Xi Jinping which urged for regulation against "involution-style competition." Such price wars have affected many industries, including solar panels and electric vehicles, prompting calls for government intervention. In response, the Ministry of Industry and Information Technology (MIIT) released revised rules for the photovoltaic industry to manage overcapacity and stabilize prices. [para. 4][para. 5]

Guangdong province has emerged as China’s largest offshore wind energy producer after installing nearly 12 GW of offshore turbines, accounting for almost one-third of the nation's total offshore wind capacity of 39.1 GW as of September's end. The province has aimed to harness offshore wind, connecting over 1 GW of new turbines annually over the past four years. Guangdong plans to have 15 GW of offshore wind operational by the end of 2025, reflecting a strategy to increase energy security amidst a heavy reliance on imported electricity. Similar initiatives are also underway in other regions, such as Shanghai's plan to build 29.3 GW of wind power plants. [para. 6][para. 7]

Additionally, a landmark ultra-high-voltage transmission line has been completed, linking hydro-rich western Sichuan with neighboring Chongqing and other power-dependent regions. This 1,316-kilometer line, carrying 1,000-kilovolt alternating current, entered service on December 27, aiming to deliver 35 TWh of hydropower annually, sufficient to power nearly 10 million households. Previously, Sichuan experienced power shortages due to exporting generated power to coastal areas rather than local grids. The new transmission line aims to remedy these shortages and help meet rising electricity demands in Sichuan and Chongqing. [para. 8][para. 9]