This piece is long so here are the key takeaways up front: China’s hydropower installed base the largest in the world and is not just a substantial share of power generation in China, but globally. It is like most renewables somewhat variable and subject to the vagaries of weather and has been particularly so the last two years with very weak rainfall and low output. Hydro capacity utilization (utilization hours) can swing much more violently over longer periods than wind and solar - it was down 25% at one point in July or in overall generation share terms it went from ~17% to 13% of total generation.
Great research, Alex. I used to work in China’s hydropower industry. Another factor is snow melt off Tibetan plateau during summer months, biggest impact is in Yunnan, also Sichuan. Too much rain too fast can be bad as it gets released (wasted), instead of used by generators--so there’s a cap to usage ability based on water basin dams.
Hi Alex, your piece comes hot on the heels of the authorities in Yunnan province issuing orders for aluminum smelters in the province to cut electricity usage through the coming months. An interesting aside to this is that the cuts were based on the % liquid metal transfers each plant did. In 2022, the cuts came a month later but were across the board, uniform. Can I deduce from your data that perhaps these announced cuts aren't quite the catastrophe they look to be from inside the aluminum market? (After all, it's only 3 months since the smelters restarted from last years' cuts.) The metal industry tends not to look at the detailed data as you have, thinking only in terms of what it means to metal price. Your analysis suggests this is putting some eggs in the basket more than some sort of emergency measure.
A fantastic research / analysis effort
Great research, Alex. I used to work in China’s hydropower industry. Another factor is snow melt off Tibetan plateau during summer months, biggest impact is in Yunnan, also Sichuan. Too much rain too fast can be bad as it gets released (wasted), instead of used by generators--so there’s a cap to usage ability based on water basin dams.
Heard about this piece from Doomberg. Excellent work!
Great piece, amazing the scale of hydro there! I thought we had a lot of it here in Quebec...
I linked your post here:
https://www.libertyrpf.com/i/139721516/science-and-technology
Hi Alex, your piece comes hot on the heels of the authorities in Yunnan province issuing orders for aluminum smelters in the province to cut electricity usage through the coming months. An interesting aside to this is that the cuts were based on the % liquid metal transfers each plant did. In 2022, the cuts came a month later but were across the board, uniform. Can I deduce from your data that perhaps these announced cuts aren't quite the catastrophe they look to be from inside the aluminum market? (After all, it's only 3 months since the smelters restarted from last years' cuts.) The metal industry tends not to look at the detailed data as you have, thinking only in terms of what it means to metal price. Your analysis suggests this is putting some eggs in the basket more than some sort of emergency measure.
Paul
Hi Alex, great post. Would love to see a followup analysis / commentary to see any developments if you have the time!
Cheers.