Lessons Learned from the Three Gorges Dam
Commission on Dams
From: Kou Reming, Vice President and CFO of Yangtze Power Company
Our company, Yangtze Power Company, is
the entity responsible for supplying energy to the region. We agree with the government officials that
the Three Gorges Dam will greatly assist in the sustainable development of
China. We urge you to consider the
following factors when you write your case study report:
- Yangtze Power Company main responsibility is to make sure that
China’s energy needs continue to be met as the country grows and
prospers. We must do everything
possible to make China energy efficient.
- We realize that there were some hard environmental choices to make
when considering the Three Gorges Dam.
However, we were impressed with the exhaustive work of the Canadian
feasibility study team and agree with their assessment that this dam was
the best option for the country.
Environmentalists agree that hydroelectric power is much preferred
over coal and other nonrenewable sources of power. Not only do we have a renewable energy
resource for years to come, but the quality of our air will be preserved
at the same time.
- At Yangtze Power Company we are aware that some opponents of the dam
have been pushing alternative energy sources such as solar and wind
power. However, it is our opinion
that these alternative sources will not be enough to meet China’s energy
demands. Only a dam the size of
the Three Gorges Dam seems logical when China’s future needs are taken
- We must look at the financial costs of building the Three Gorges
Dam. Yes, this dam is very
costly. However, if we had waited
another ten or fifteen years from now and decided to build the dam then,
would be even more costly. With
the assistance of loans from countries throughout the world, can have
arranged to pay back our loans over several years. The profits generated from the dam will
allow us to quickly repay our creditors.
We believe our rates to be
the lowest in China -- and proof that the other Three Gorges hydropower
generators will be offering a similarly competitive tariff compared to
coal power stations.
- We will bring generous
cash dividends to our shareholders, not like some listed companies which
give investors nothing but a pile of paper by issuing new shares
recklessly." When all 26 sets of generators are in operation by 2009,
84.7 billion kilowatts, or 100 billion kilowatts of electricity will be
generated in a year, or approximately 5 percent of forecasted national
consumption. The Yangtze Electric
Power estimates that it will generate over $3 billion each year in
- Construction has so
far been smooth and I maintain that strong support from the state will
make sure that all the jigsaw pieces fall into place. The Three Gorges project has been
following a strict timetable for the last nine years. It will bring
enormous benefits to shipping and flood prevention. No quality problem has
occurred in the construction and the budget is well under control. Judging
from the current progress, the total investment for the project will not
surpass RMB180 billion, 20-plus billion less than the original budget.
- We do regret the fact that over a million people will have to be
resettled because of building the dam.
However, we have worked with the local residents and the Chinese
government officials to make the transition to their new land as smooth as
possible. Also, locals who wish to
do so are welcome to apply for job training to help construct and operate
the dam. As the region’s official
energy supplier, we must search for the best energy solutions for the
entire country; however, we will work with the local people so their
lifestyle is disrupted as little as possible.
Yangtze Power Company is excited about
our role in China’s energy future. By
building the Three Gorges Dam and successfully operating it, we will generate
even more opportunities for improvement loans from outside lending
sources. In addition we feel with this
success, China has become a model for other developing countries to follow.