Drought from China to US hits hydro dams, slashing top clean energy source

China’s Three Gorges Dam is an awe-inspiring sight, a vast barrier across the Yangtze River that contains enough concrete to fill seven Wembley Stadiums and more steel than eight Empire State Buildings. Its turbines could singlehandedly power the Philippines.

But this summer, the world’s largest power plant was eerily quiet.

Three Gorges Dam in August. (Photo: Bloomberg)

On a late August visit to the facility, water on both sides of the dam was still. There was no sign of the white spray that usually rises from the the spillway or roar of water emerging from the the turbines. Scorching temperatures and a drought upstream have reduced the reservoir to a bare minimum, drastically reducing the plant’s ability to generate electricity.

The water woes of China’s iconic mega-dam are part of a global hydropower crisis that is being made worse by global warming. From California to Germany, heatwaves and droughts have shrunk rivers that feed reservoirs. Hydroelectricity output fell by 75 terrawatt-hours in Europe this year through September — more than the annual consumption of Greece — and fell 30% across China last month. In the US, generation is expected to fall to the lowest level in six years in September and October.

It’s a cruel irony that’s forcing utilities to reconsider the traditional role of hydropower as a reliable and instant source of green energy. Dams are the world’s largest source of clean energy, yet extreme weather is making them less effective in the battle against climate change. 

The cycle is “a warning signal in terms of designing power systems,” said Wenxuan Xie, a managing consultant with Wood Mackenzie Ltd. “You really have to think about the possibilities of extreme events, and that perhaps what you once thought was extreme might happen more frequently.”

A shoreline exposed by low water levels at the Roskreppfjorden dam in Sirdal, Norway in September. (Photo: Bloomberg)

The problem is there are few renewable alternatives as flexible or widespread. Globally, hydropower generates more electricity than nuclear and more power than wind and solar combined. In countries like Norway and Brazil, dams generate more than half of total electricity. Moreover, large dams have historically been more reliable, producing power on average about 42% of the time, compared to 25% for wind and 12% for solar, according to BloombergNEF data. And grid operators can use them as a dispatchable source — one that can be almost instantly switched on when it’s needed, similar to coal or gas. 

Except when there’s no water.

“Worsening drought conditions as part of climate change will start to limit the availability and dispatchability of hydro reservoirs and lower the capacity factor in places like Southwest China and Western US, ” said Xizhou Zhou, managing director for power and renewables at S&P Global Commodity Insights. That’s going to affect both the revenue that dams generate and the reliability of the grids they feed, he said. 

The worst drought in 1,200 years this year in the US West means parched reservoirs can only churn out half of the power they normally supply to California, increasing the risk of rolling blackouts across the state. Nationwide hydro generation fell to 17.06 terrawatt-hours in September and was expected to plummet further in October, according to the Energy Information Administration, the lowest since September 2016.

In Europe, dried-up rivers reduced September hydro generation to the lowest since at least 2015, according to climate think tank Ember. That’s forced utilities to rely more on coal and gas, using up stocks of fuel that the continent is trying to conserve to avoid a winter power crunch caused by supply disruptions from Russia

In Brazil, which typically relies on hydro for more than 60% of its electricity, a drought last year brought the country to the verge of power rationing and forced it to rely on increased imports from neighbors Uruguay and Argentina, or to buy expensive fossil fuels to make up the deficit.

Dam operators must also balance competing requirements for their water. Large dams provide irrigation for crops, water supplies for cities and navigation for ships. The primary purpose of the Three Gorges Dam, for example, was to control the annual flooding of the Yangtze that periodically devastated towns and farms downstream. This summer, as drought reduced the flow of water into the river, the dam had to hold back enough water to maintain navigation to Chongqing, central China’s largest city that is almost 2,000 kilometers from the sea. 

Lake Mead irrigates hundreds of thousands of acres of crops. (Photo: Bloomberg via Getty Images)

Lake Mead, the reservoir behind the Hoover Dam on the Colorado River in the Western US, provides 90% of Las Vegas’s water supply as well as feeding cities such as Los Angeles and irrigating hundreds of thousands of acres of crops. The lake’s level fell so low this summer that that human bones were unearthed from the lake bed, launching police investigations.

No country has built more dams though than China, where the worst drought in at least 60 years in Sichuan, a province the size of Germany, cut generation by 50% in August just as air-conditioning demand soared to counter a heat wave. Officials had to shut off power to many local factories for nearly two weeks, disrupting supplies for manufacturing giants including Apple Inc. and Tesla Inc.

“When such an event takes place, it does two things — it reduces power supply and enhances power demand, so there’s a double whammy,” said Li Shuo, an analyst with Greenpeace.

Even after Sichuan’s drought ended in late August, the effects are lingering. In neighboring Yunnan province, aluminum smelters are being forced to operate at reduced capacity to conserve power and give reservoirs a chance to refill before the drier winter months, when electricity supplies could be tested again by high demand. To meet the energy shortfall, China has had to rely more on polluting coal and gas, even as global costs of the fuels soared to records.

“An extended severe drought such as we’ve seen this year can have a crippling effect,” said David Fishman, a Shanghai-based analyst with The Lantau Group. “Reservoirs take progressively longer to refill and be ready to generate again.”

Short of reverting to using more coal or gas, nations grappling with less reliable supply from hydro turbines can invest in nuclear power or battery storage for wind and solar. Another option is to build more power lines to spread the load over more power sources in different regions. 

Floating solar panels on hydro reservoirs can help too, generating power when it’s sunny and slowing evaporation, said Lei Xie, energy policy manager at the International Hydropower Association. “The combination of hydropower together with solar works well,” she said, and the Chinese government has employed the strategy to increase the flexibility of hydro installations. 

A floating solar farm, operated by EDPR, on the artificial lake beside the Alqueva Dam in Alqueva, Portugal, on Tuesday, June 7, 2022. (Photo: Bloomberg)

Yet extreme weather can affect all clean-energy sources. Wildfire smoke and dust storms dim solar panels, while plummeting winter temperatures can freeze up wind turbines. Europe’s drought curbed output from nuclear plants that rely on river water for cooling.

Concern about the reliability of dams as the planet warms is compounding growing resistance to new hydropower projects in many countries. Dams have been blamed for disrupting ecosystems, loss of wetlands and the extinction of aquatic species. Big projects displace local populations to make way for reservoirs — more than 1.3 million people in the case of the Three Gorges.

Those headwinds mean that hydropower is unlikely to keep its lead role in clean power for long. BloombergNEF expects an 18% increase in global hydropower capacity between now and 2050, compared to a more than 8-fold increase for solar and at least 3-fold rise in wind power.

In fact, hydro development may be shifting to what was once a niche role in the industry: pumped storage. For these, water is pushed back up into the reservoir during times of excess electricity generation and then allowed to flow down through the turbines when more electricity is needed. The technology can be paired with intermittent wind and solar power to provide carbon-free electricity around the clock. Because pumped systems operate on a closed loop, they're less affected by droughts, according to the hydropower association.

China may develop 270 gigawatts of such projects by 2025, according to the top state-owned dam builder, compared to the nation's plans to add 60 gigawatts of traditional hydro generation over the same period.

Hydro's struggles underline the difficulty of building a robust renewable energy network to replace fossil fuels, especially in developing nations that must also contend with soaring electricity demand as per-capita consumption rises. At the same time the drought issues underscore the need to speed up efforts to curb rising temperatures as the cost of making the energy transition mounts, said Greenpeace’s Li.

“If we don’t address the issue at the root of climate change and reduce emissions, then we need to admit there will be things we can’t plan for or are too expensive to plan for,” he said. “There will be catastrophic losses.”