Speaker 1: Bloomberg Audio studios, podcasts, radio news.
Speaker 2: Earlier this month, China officially started construction on a massive
Speaker 2: hydropower dam in tibetan Yaoum. The dam, when completed, will
Speaker 2: be the biggest power plant on the planet.
Speaker 1: It's three times bigger than the largest power plant in
Speaker 1: the world right now. It's more than all of the
Speaker 1: power plants in Poland combined.
Speaker 2: Dan Mortor covers the energy industry for Bloomberg from Beijing.
Speaker 1: The amount of cement their estimating their need it would
Speaker 1: be enough to fill more than fifty Hoover dams, and
Speaker 1: the amount of steel. It would be enough to build
Speaker 1: one hundred and sixteen Empire state buildings.
Speaker 2: This mega project comes with a mega price stack one
Speaker 2: hundred and sixty seven billion dollars.
Speaker 1: This would be one of the most expensive undertakings for
Speaker 1: infrastructure in human history, more expensive than the International Space Station.
Speaker 1: You're looking at decades long projects like building the US
Speaker 1: Interstate Highway system before you get to comparable amounts of investment.
Speaker 2: China says the dam will provide a major source of
Speaker 2: clean energy. More importantly, it will boost the country's slowing economy.
Speaker 2: But the project carries huge engineering and environmental risks and
Speaker 2: could strain relations with two of its neighbors, India and Bangladesh.
Speaker 1: The Indian government has been worried about if China was
Speaker 1: able to build a dam, they would then be able
Speaker 1: to use sort of water access as a pain point
Speaker 1: if there was an eventual conflict between the countries. And
Speaker 1: there's going to be all of this human activity in
Speaker 1: a place that's been remote for most of its history.
Speaker 1: You hope for the best, but human history has not
Speaker 1: been very kind to the planet Earth, and you just
Speaker 1: have to wonder if they're going to be able to
Speaker 1: rain in people from not damaging that really area.
Speaker 2: This is the Big Take Asia from Bloomberg News. I'm
Speaker 2: Mini Kadoshi filling in for one half every week. We
Speaker 2: take you inside some of the world's biggest and most
Speaker 2: powerful economies and the markets, tycoons and businesses that drive
Speaker 2: this ever shifting region. Today on the show, China bats
Speaker 2: big on a new mega dam, Why the project is
Speaker 2: raising alarm with its neighbors, and what its construction could
Speaker 2: mean for China's economy and its green energy ambitions. When
Speaker 2: it comes to building hydro dams, China has got plenty
Speaker 2: of experience. It operates two of the world's largest dams.
Speaker 2: That includes the world's biggest hydro dam, Three Gorges, which
Speaker 2: opened in central China in two thousand and nine. This
Speaker 2: this new megadam will be built in Tibet, a mountainous
Speaker 2: region just north of the border with India.
Speaker 1: It's in this bend on the Arlansangwo River that they
Speaker 1: call like the Medor or Moto Gorge.
Speaker 2: And Bloomberg Energy reporter Dan Motor says the dam is
Speaker 2: in an area that till recently was very difficult to
Speaker 2: get to.
Speaker 1: It is a very, very very steep drop. The river
Speaker 1: drops about two thousand meters over a fifty klometer stretch
Speaker 1: as it curves and bends through the mountains of the Himalayas.
Speaker 1: The county that it's at is up until twenty thirteen
Speaker 1: didn't even have a highway that connected it. You'd have
Speaker 1: to walk a day, you know, or take a donkey
Speaker 1: or a horse to get to the river from the
Speaker 1: closest highway.
Speaker 2: Most dams, like the Hoover Dam, block the path of
Speaker 2: a river to create a reservoir. They then release the water,
Speaker 2: which turns turbines and generates electricity. This Yar Lungsangpo Dam
Speaker 2: is different.
Speaker 1: What they're trying to do here is a little bit
Speaker 1: more audacious. The idea is to drill a tunnel through
Speaker 1: the mountains down that steep, steep, steep gradient, and then
Speaker 1: divert some of the water from going around that big
Speaker 1: bend and instead go basically just vertically straight down the mountain.
Speaker 1: That steep gradient that this river moves on really allows
Speaker 1: you to get that water flowing at high enough speeds
Speaker 1: to be able to run the turbines to generate the electricity.
Speaker 2: At the groundbreaking ceremony earlier this month, Chinese Premier Li
Speaker 2: Chiang called the Yar Lungsanko Dam the project of the century.
Speaker 2: State engineers have said it has the potential to generate
Speaker 2: as much as seventy gigawatts of electricity. That's enough to
Speaker 2: power the United Kingdom.
Speaker 1: It's three times bigger than the largest power plant in
Speaker 1: the world right now. It is a national, country level
Speaker 1: type of generating asset, but China's huge. China has about
Speaker 1: four thousand gigawatts of total generating capacity right now. Its
Speaker 1: peak demand is about one four hundred and fifty gigawatts,
Speaker 1: and so this project isn't going to have a huge
Speaker 1: world changing impact on China's power sector, but it does
Speaker 1: do a couple of different things that are going to
Speaker 1: be really beneficial to China's attempt to clean up its
Speaker 1: energy sector and will help China meet its energy transition
Speaker 1: goals of peaking emissions by twenty thirty and then reaching
Speaker 1: net zero emissions by twenty sixty.
Speaker 2: China still relies on coal power plants to back up
Speaker 2: its more sustainable energy sources like solar and wind.
Speaker 1: Wind and solar, while cheap and wall abundant, only generate
Speaker 1: when the wind blows, and it doesn't really allow them
Speaker 1: to replace coal plants because at the end of the day,
Speaker 1: you still need backup generation to make sure that when
Speaker 1: there's a period where there's no sun out and the
Speaker 1: wind stops, that people can still turn on their lights.
Speaker 1: What hydropower does that when solar don't do is it's
Speaker 1: what we call a dispatchable source. You can use it
Speaker 1: when it's needed, you can hold it back when it's not. Now,
Speaker 1: hydropower is not perfectly dispatchable, like if you're using a
Speaker 1: fossil fuel power plant, a gas or a coal power plant,
Speaker 1: you can really just sort of turn it off and
Speaker 1: on as needed hydropower. There's still some external things like
Speaker 1: whether there's a drought, if there's you know, too much water,
Speaker 1: If there's rain, you know, you have to open the floodgates.
Speaker 1: It's not perfect, but it is a clean power source
Speaker 1: that allows the grid to be a little bit more
Speaker 1: flexible in terms of, you know, generating when it's needed
Speaker 1: and not just when the supply is available.
Speaker 2: That reliability and flexibility are just two of the reasons
Speaker 2: why building a hydroelectric dam is so expensive. The Yarlung
Speaker 2: Sungpo Dam will cost one hundred and sixty seven billion
Speaker 2: dollars more than the International Space Day did, and Dan
Speaker 2: says the power it generates will be several times more
Speaker 2: expensive than any other energy source.
Speaker 1: If it ends up being about a segmenty gigawatt project,
Speaker 1: as we expect it to be, you're talking about two
Speaker 1: point four million dollars per megawatt. Now. That compares to
Speaker 1: an onshore wind plant right now that China would spend
Speaker 1: about six hundred thousand dollars per megawat on, or a
Speaker 1: solar power plant that China would spend about four hundred
Speaker 1: thousand dollars per megadon. China infrastructure projects never lack for lenders.
Speaker 1: But this is not a white elephant. This is going
Speaker 1: to be a hydropower project that sells a lot of electricity.
Speaker 1: That electricity has value, and so they're going to be
Speaker 1: able to code to their lenders and say, listen, over
Speaker 1: twenty thirty years, we're going to make a ton of money,
Speaker 1: and we're going to have the revenue to pay you back.
Speaker 2: Dan says, there's another reason the Chinese government has green
Speaker 2: lit the project, and that's the state of China's economy.
Speaker 1: The way I think about it is this is less
Speaker 1: of a hydropower project that's going to provide some economic
Speaker 1: stimulus and more of an economic stimulus project that at
Speaker 1: the end of the day will be able to produce
Speaker 1: some hydropower. We're in this new sort of era where
Speaker 1: China's economy has been stagnant since COVID people have been
Speaker 1: waiting for a kind of stimulus boost to recover it.
Speaker 1: Sectors like cement, like steel, like construction, those have been
Speaker 1: particularly hard hurt by the burst of the property bubble,
Speaker 1: and so you've got this perfect storm here where there's
Speaker 1: this project that requires a lot of those materials that
Speaker 1: used to be seen as maybe a little bit risky
Speaker 1: and costly to do, but now it kind of fits
Speaker 1: this dual need of both providing some economic stimulus for
Speaker 1: some hurting sectors while also eventually providing a really, really
Speaker 1: large source of clean energy.
Speaker 2: The project is estimated to generate two hundred thousand new
Speaker 2: jobs and boost China's GDP every year for the next decade.
Speaker 1: They've estimated that it's likely bigger than multiple different monetary
Speaker 1: policy actions that the Central Bank has taken over the
Speaker 1: past few years, so it could really help reflate the
Speaker 1: economy as they try to do their supply side reform
Speaker 1: over the coming years.
Speaker 2: How China plans to transmit all that clean energy, and
Speaker 2: what the dam's construction means for simmering tensions between Beijing
Speaker 2: and New Delhi. That's after the break. China has been
Speaker 2: talking about building a mega dam on the Yurlanngsungpur River
Speaker 2: for decades, but construction was approved only in December last year.
Speaker 2: Bloomberg Stan Mertor says that's largely because the challenges to
Speaker 2: the project are so formidable.
Speaker 1: In past conversations I've had with people, they were a
Speaker 1: little bit iffy on whether it would ever get built.
Speaker 1: Because this is an incredibly remote site. It's very very
Speaker 1: far away from any major population centers, and so you
Speaker 1: have to transport millions of tons of cement and sand
Speaker 1: and aggregate and tens of thousands of workers up to
Speaker 1: this remote area.
Speaker 2: The project site is in a seismically active area. That
Speaker 2: means engineers will need to ensure that the dam is
Speaker 2: strong enough to withstand earthquakes. And then there's the question
Speaker 2: of how to get the power generated by the dam
Speaker 2: to the places that need it. Beijing, Shanghai, Hong Kong.
Speaker 2: They're all thousands of miles away, which means this isn't
Speaker 2: just one massive infrastructure project, it's two.
Speaker 1: Earlier this year, when China announced this project as part
Speaker 1: of their work plan for this year, they not only
Speaker 1: said we're going to try to develop hydropowered the is
Speaker 1: Ensemble River, but they said we're going to try to
Speaker 1: build a power line from Tibet to the Hong Kong,
Speaker 1: guangzhosh and Jen Bay area to transmit some of that.
Speaker 1: That itself is going to be a major undertaking. It's
Speaker 1: going to require lots of copper and aluminum steel itself.
Speaker 1: City Bank has estimated just the transmission alone could be
Speaker 1: another seven hundred billion yuan about one hundred billion dollars,
Speaker 1: and so that will also be a difficult thing.
Speaker 2: The domestic considerations in building this mega dam are considerable,
Speaker 2: but they might be overshadowed by international complications. Downstream from
Speaker 2: the site. The Yar Lungsangpu River flows into India and
Speaker 2: then into Bangladesh and is critical to livelihoods in the region.
Speaker 1: When China first announced back in December that there was
Speaker 1: going to go forward with this, the Indian government reach
Speaker 1: out to the Chinese government. They raised alarm bells, an
Speaker 1: Indian minister set in March. This was part of discussions
Speaker 1: the countries had in January. The Chinese government clearly thinks
Speaker 1: that they've told the Indian government the downstream areas won't
Speaker 1: be affected, and they think that they've convinced Indian officials
Speaker 1: that this is not a project that will harm the ties.
Speaker 2: The relationship between China and India has worsened in recent
Speaker 2: years after a long history of border disputes in the
Speaker 2: Himalian region.
Speaker 1: It is too early to say how this is going
Speaker 1: to develop. Already, India has mooted building its own hydropower
Speaker 1: station across the border from this plant where they would
Speaker 1: be able to at least put in a little bit
Speaker 1: of their own control over the flow of the water
Speaker 1: and produce their own electricity.
Speaker 2: There's another complication. Tibet is a highly sensitive area. The
Speaker 2: region has long endured intense social security and religious controls
Speaker 2: under Beijing's policies, and though China has denied them, allegations
Speaker 2: of mass labor systems and repression persist.
Speaker 1: Tibet is a politically sensitive area. It's been in the
Speaker 1: sort of global crosshairs for decades. Tibet and the Beijing
Speaker 1: government have a very long and fraught history, and you know, frankly,
Speaker 1: as a foreign journalist, Tibet is an area that I'm
Speaker 1: not allowed to visit.
Speaker 2: It's not just the political situation in Tibet. There are
Speaker 2: significant concerns around the environmental implications as well.
Speaker 1: This is a really really fragile area. It's really unique there.
Speaker 1: You know, you have this dry mountain air coming down
Speaker 1: from the Himalayas meeting up with this humid, warm air
Speaker 1: coming up from the Indian Ocean. It's one of the
Speaker 1: most uniquely biodiverse spots in the world. And the idea
Speaker 1: of bringing tens of thousands of workers. Plus However, many tens,
Speaker 1: if not hundreds of thousands of more wolves will pop
Speaker 1: up to create like the restaurants and food trucks and
Speaker 1: bars and karaoke and stuff to service these people. The
Speaker 1: idea that there's gonna be all of this human activity
Speaker 1: in a place that's been remote for most of its history.
Speaker 1: You hope for the best, but human history has not
Speaker 1: been very kind to the planet Earth, and you just
Speaker 1: have to wonder if they're going to be able to
Speaker 1: rain in people from not damaging permanently. It's really eigue area.
Speaker 2: This is The Big Take Asia from Bloomberg News. I'm
Speaker 2: mad A Kavoshi. To get more from The Big Take
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