View of the Huaneng Huaiyin Power Plant in Huaian, east Chinas Anhui province. Energy providers China Huaneng Group and China Huadian Corporation failed to pass the environmental impact assessment of two hydroelectric projects. Photo by Imaginechina: AP

In 2008, China’s Environmental Protection Ministry made an unprecedented move: it halted two giant hydroelectric projects.

The two projects, located on the middle stream of the Jinshajiang River, were operated by two of China’s biggest power giants companies, Huaneng Group and China Huadian Corp. The combined output from the two projects was nearly 4 gigawatts. By stopping the two hydro projects, the EPM challenged a traditional way of doing business in the power industry – starting a project first and applying for environmental permission later. And even though the EPM ordered construction to stop, the two projects did not come to a halt until June.

The projects were permitted in 2007 by the local governments who have been eager to collect the huge taxes. With the easy passes from the local governments, the companies immediately started the projects. By the time the EPM stopped the projects, the companies had built the induction tunnels and intercepted the river, and a total of $4.3 billion had been invested. Under the pressure from the EPM, Huaneng and Huadian admitted that they had violated environmental protection laws and agreed to temporarily stop the projects. The companies then started to investigate the details of the project, start the environmental impact statements, and look at flood prevention and human migration. However, since so much work done and money spent, a permit from EPM will almost certainly be granted.

According to Ma Jun, the director of the Research Center for Public and Environment, an edict signed by the all-powerful National Development and Reform Commission (NDRC) indicated that the initiation of hydroelectric power plants, including construction of roads and even induction tunnels, only needs the permission from the local governments. Permission from EPM is needed only for water interception and dam construction. Many such power projects have not applied for environmental permission until the water interception was almost finished and all of them were permitted at later dates. Under such circumstances, EPM cannot do much and is powerless and meaningless, said Ma Jun. The promotion of EPM from the Environmental Protection Bureau hasn’t helped to build a stronger environmental protection agency.

The contradictions between environmental protection and construction of hydroelectric power plants have long been headaches for the central government. China has the most abundant hydropower in the world and has the great potential to develop hydroelectric power. By the end of 2008, the hydroelectric capacity in China was over 170 GW and accounted for 21.6 percent of the national power capacity. By comparison the US draws only 7.7 percent of its electricity from hydroelectric plants.

It is expected that China’s hydroelectric capacity will reach 200 GW by 2010 and over 300 GW by 2030. However, there are no clear guidelines, policies or regulations that explain which agencies are responsible for the overall planning, who has the authority for environmental evaluation, and how to protect the environment.

On the one hand, hydroelectric power is desperately needed for the development of the local economy; on the other hand the ecosystem is damaged, land is occupied, and millions of people are displaced. Moreover, everyone can find a reason to build their own hydroelectric power plants. The results of this chaotic permitting environment is obvious: without any integrated planning and regulatory scheme, more hydro plants will be initiated without an EPM permit, since the local governments always give green lights to businesses that can pay handsome taxes (and often bribes).

This situation goes beyond the hydroelectric sector. Some coal fired power plants have also been built by following the same path – build first and get environmental permission later. By some estimates, over 100 coal-fired power plants are now under construction, and none of them have permits from the EPM.

The punchline here is obvious: environmental protection – particularly when it comes to China’s booming electric power industry -- still has a long way to go.