Sichuan and Yunnan's hydropower continued to decline in May, with major hydropower provinces experiencing "water shortage" data | year-on-year | water shortage

The hydropower output situation in Yunnan and Sichuan has not improved yet, and the latest data shows that the year-on-year decline in power generation in these two major hydropower provinces is further expanding.

According to data from the National Bureau of Statistics database, in May this year, the hydropower generation in Sichuan Province decreased by 24.4% year-on-year, and the decline of 11.9% compared to April continued to expand; The hydroelectric power generation in Yunnan Province decreased by 43.1% year-on-year, and the decline of 41.9% compared to April continued to expand.

Hydroelectric provinces are facing a "water shortage"

Sichuan and Yunnan are major provinces in China with hydroelectric power generation, accounting for nearly 80% of their total installed capacity. Due to their abundant hydropower resources, the two provinces have become important bases for transmitting electricity from the west to the east.

After entering summer, hydroelectric power should have entered the peak season. Statistics show that in May last year, the hydropower generation in Sichuan and Yunnan increased by 41.8% and 61.8% year-on-year, respectively.

However, based on monthly data since the beginning of this year, the hydroelectric power generation in Yunnan Province has been continuously decreasing since March. The year-on-year growth rates of hydroelectric power generation from March to May were -14.2%, -41.9%, and -43.1%, respectively.

The hydroelectric power generation in Sichuan Province still maintained a growth rate of 13.8% in the first quarter. However, the decrease in April was 11.9%, with a growth rate of 6.5% from January to April; In May, it decreased by 24.4%, and the growth of hydroelectric power generation from January to May changed from positive to negative, becoming a decrease of 1.5%.

Ma Guangwen, Director of the Energy Development Research Center of Sichuan University, told First Financial that since the beginning of this year, several major rivers in Sichuan have received very little water. In addition, last year's drought and low water storage have led to a decrease in hydropower output in Sichuan this year.

Compared to others, Yunnan suffered earlier and more severely. Since the beginning of this year, most of Yunnan has been facing drought. From January to April, the average precipitation in Yunnan Province was 32.9 millimeters, 64.1% less than the same period in the past decade. The average temperature in the province is 14.1 ℃, which is 0.9 ℃ higher than the same period in normal years. This situation continued in May.

After experiencing extreme heat and drought events in the Sichuan Chongqing region for 61 years last year, the water storage capacity of reservoirs and power stations was insufficient; Due to the influence of precipitation in the past winter and this spring, the main rivers have also received less water this year. According to the website of the Yangtze River Water Resources Commission of the Ministry of Water Resources, from November 2022 to May 2023, the inflow of water from the Yangtze River Basin continued to be dry.

Not only that, the meteorological department predicts that this summer there will be less precipitation and higher temperatures in the eastern part of Southwest China and central China, with most parts of Hubei, northern Hunan, eastern Chongqing, and northeastern Sichuan experiencing 20-50% less precipitation, which may lead to regional meteorological drought.

Ma Guangwen stated that under such circumstances, the energy supply pressure in Sichuan during summer is relatively high. To ensure the summer power supply, on the one hand, we need to increase local coal-fired power generation, and on the other hand, we need support from outside the province, including the support of northwest power entering Sichuan, as well as the requirement to increase the amount of electricity generated by the West East transmission in Sichuan.

On June 12th, Sichuan Province held work talks with State Grid Corporation of China. Sichuan Provincial Party Secretary Wang Xiaohui stated that in order to successfully achieve the annual development goals this year, the whole province needs to make extraordinary efforts and cannot do without the strong support of State Grid. Especially at the end of July this year, the 31st World University Summer Games will be held in Chengdu to ensure that there is no loss of electricity supply.

In response to the needs of multiple parties such as hydroelectric power generation in the Yangtze River Basin, on June 10th this year, the Yangtze River Committee of the Ministry of Water Resources released approximately 87 billion cubic meters of storage capacity below the normal water level for flood control in the controlled reservoirs included in the joint operation of the Yangtze River Basin, which is 16.5 billion cubic meters more than the designed flood control capacity.

The Minister of Water Resources, Jiang Wei, also stated that, taking into account the trend of drought being more severe than flood during the main flood season, the large capacity of reservoirs for regulating and storing floods, and the low water levels in the middle and lower reaches of the main stream and two lakes, in order to cope with possible drought and support the power grid to peak summer, reservoirs such as the Three Gorges, Xiangjiaba, and the cascade of the middle reaches of the Jinsha River have moderately retained more than 3 billion cubic meters of water, and water resource reserves have been prepared in advance.

Is thermal power experiencing a new wave of installation boom?

Under the influence of major hydroelectric provinces such as Sichuan and Yunnan, the national hydroelectric power generation has also significantly decreased. The national data released by the National Bureau of Statistics on June 15th showed that in May, hydropower decreased by 32.9%, an increase of 7.0 percentage points compared to April; Thermal power increased by 15.9% year-on-year, with a growth rate 4.4 percentage points faster than in April.

While hydroelectric power generation has significantly decreased, local thermal power in Sichuan and Yunnan has grown rapidly to supplement the gap in hydroelectric power generation and ensure power supply.

On the 19th, the Yunnan Provincial Bureau of Statistics announced that in the first five months of this year, thermal power generation in Yunnan Province reached 27.728 billion kilowatt hours, a year-on-year increase of 31.1%. Among them, thermal power generation in May reached 7.002 billion kilowatt hours, an increase of 141.5%, reaching a new high since November 2009. In addition, according to the database of the National Bureau of Statistics, the thermal power generation in Sichuan increased by 36.5% and 86.4% in April and May, respectively.

Lin Boqiang, Dean of the China Energy Policy Research Institute at Xiamen University, told First Financial that the decline in hydropower will lead to an increase in demand for coal thermal power. When hydropower output is insufficient, thermal power is the main force to fill the power gap.

On June 14th, the National Development and Reform Commission organized a national teleconference to arrange and deploy the 2023 energy peak summer work. The meeting comprehensively analyzed and judged the supply and demand situation of energy during the peak summer season, and made further deployments and arrangements for the work of ensuring energy supply during this year's peak summer season, making every effort to ensure the stable and orderly supply of energy and electricity during the peak summer season.

On June 16th, a teleconference on energy supply guarantee during the peak summer season in Shanxi Province was held. The meeting emphasized the need to focus on increasing coal production and ensuring supply, as well as ensuring peak power generation, grid safety and stability, natural gas production and supply, energy transportation security, and energy project construction. Various measures should be implemented and refined to ensure that power outages and restrictions do not occur.

In fact, there is a negative correlation between hydropower and thermal power generation. On June 12th, at the "Xinglong Lake Energy and Power Peak Dialogue - Construction of a New Power System under Extreme Meteorological Conditions", Shen Yanbo, the Science Director of the Wind Energy and Solar Energy Center of the China Meteorological Administration, introduced that last year, Sichuan and Chongqing experienced high temperatures and drought, and water and electricity were insufficient. Meanwhile, Shanxi, which is also a base for power transmission from west to east, "sold very well in terms of electricity prices.".

Lin Ting, Deputy Director of the Sichuan Provincial Energy Bureau, stated at the aforementioned meeting that Sichuan's social and economic development is in a stage of rapid growth, and energy demand, especially electricity demand, has been maintaining a rigid growth. The characteristic of Sichuan's energy system relying on nature is obvious, and the situation of tight energy and electricity supply in special times will continue to exist for a period of time.

After the high temperature power rationing event in Sichuan and Chongqing last year, Lu Zong and his colleagues from the Tsinghua University Energy Internet Think Tank Research Center put forward several policy recommendations to Sichuan regarding the single power supply structure of Sichuan's reliance on hydropower, including adding stable power sources such as thermal power in the load center to provide important power supply guarantee for the system in case of hydropower shortage.

The "14th Five Year Plan for Electric Power Development in Sichuan Province" released in May 2022 proposes that no new coal-fired power projects will be approved for construction during the 14th Five Year Plan period. However, the "Development Plan for Power Grid in Sichuan Province" issued on December 6th last year proposed to study and demonstrate a number of coal-fired power projects, fully unleash the coal production capacity within the province, expand the amount of foreign coal in provinces such as Xinjiang and Shaanxi, accelerate the construction of coal storage bases in Guangyuan and Dazhou, and enhance the power coal supply guarantee.

The latter plan clearly sets the target for 2025: the installed capacity of electricity will reach 165.6 million kilowatts, and the proportion of hydropower, thermal power, wind power, and photovoltaic power generation will be adjusted from 77.8%, 15.9%, 4.6%, and 1.7% to 64.1%, 16.6%, 6.0%, and 13.3%. The ability of multiple power sources to complement each other and water and fire to complement each other has been significantly enhanced.

According to a recent research report by Guosheng Securities, due to the current tense energy supply and demand situation and the urgent need for power balance and flexible resources in the power system, thermal power has ushered in a new round of installation boom. The high inventory of coal ports and power plants is rising, and the market coal prices are showing a clear downward trend. The long-term coal guarantee efforts continue to strengthen, and the cost pressure on power plants is being released. The profit recovery of thermal power plants is imminent. In addition, the electricity reform continues to deepen and fulfill the role of thermal power peak shaving and capacity support, and the peak summer season is approaching, highlighting the role of thermal power supply as a ballast stone.

Lin Boqiang stated that the shortage of electricity in China is only a partial issue, and ensuring the supply of electricity is to ensure residential electricity, while residential electricity only accounts for 15%. Therefore, squeezing a little from the industry can meet this demand. The investment volume in the energy system is very large, and it is impossible to be very generous in dealing with extreme events. If this becomes the norm under climate change, it will attract investment.