Three gorges dam

Spartan95

Junior Member
PRC going green is certainly a good move. However, there is more than 1 way of going green. And several other ways of going green does not require the relocation of 1 million residents who have lived there for generations. Or submerging priceless heritage sites underwater.

Now, regarding the point about mitigating the environmental impact of TGD being a maintenance issue, as already mentioned in the article I posted, these problems were already highlighted in the planning stage of the project. Yet, it wasn't taken seriously that extra money is now required to be spent on it. Will this be one-off (as plawolf thinks)? Or will it be recurring? Time will tell. Afterall, it did take 5 years (completed in 2006) for these issues to be addressed.

Is 124 billion yuan a small sum? For comparison, the TGD cost an estimated 185 billion yuan to build.

While the TGD certainly has it benefits, the negatives should have been addressed from the very start of the project. Denying that there are negatives does not change the reality that they exist (to the tune of 124 billion so far).
 

solarz

Brigadier
PRC going green is certainly a good move. However, there is more than 1 way of going green. And several other ways of going green does not require the relocation of 1 million residents who have lived there for generations. Or submerging priceless heritage sites underwater.

Now, regarding the point about mitigating the environmental impact of TGD being a maintenance issue, as already mentioned in the article I posted, these problems were already highlighted in the planning stage of the project. Yet, it wasn't taken seriously that extra money is now required to be spent on it. Will this be one-off (as plawolf thinks)? Or will it be recurring? Time will tell. Afterall, it did take 5 years (completed in 2006) for these issues to be addressed.

Is 124 billion yuan a small sum? For comparison, the TGD cost an estimated 185 billion yuan to build.

While the TGD certainly has it benefits, the negatives should have been addressed from the very start of the project. Denying that there are negatives does not change the reality that they exist (to the tune of 124 billion so far).

First of all, hydroelectricity is probably the most cost-efficient green energy there is. In the West, "going green" is more symbolic than utilitarian, and that's the Achille's Heel of the environmental movement. Neither solar nor wind energy is more cost-efficient than fossil fuels, and that's the key if you want the market to use green energy instead of fossil fuel.

Secondly, how do you know that those problems weren't taken seriously at the beginning? There is really only so much that can be done. Just because the builders of the TGD did not address every problem in one shot does not mean they don't take those problems seriously! In the same vein as Microsoft releasing software that contains bugs that need to be patched later, the builders of the TGD left issues that can be addressed after the dam is built to, well, after the dam is built.

Finally, it doesn't matter how many times you repeat "124 billion yuan", it is still meaningless without knowing the income that TGD generates. So what if it cost 185 billion to build? If it takes 100k to start a business, and that business costs 80k a year to run, does that automatically mean it's a bad investment??
 

Hendrik_2000

Lieutenant General
Not to mention the prevention of flood and loss of life. People often forgot that flooding is the scourge of Chinese nation from immemorial time. Specially this year.
 

Spartan95

Junior Member
First of all, hydroelectricity is probably the most cost-efficient green energy there is. In the West, "going green" is more symbolic than utilitarian, and that's the Achille's Heel of the environmental movement. Neither solar nor wind energy is more cost-efficient than fossil fuels, and that's the key if you want the market to use green energy instead of fossil fuel.

Most cost-efficient by what measure?

Secondly, how do you know that those problems weren't taken seriously at the beginning? There is really only so much that can be done. Just because the builders of the TGD did not address every problem in one shot does not mean they don't take those problems seriously! In the same vein as Microsoft releasing software that contains bugs that need to be patched later, the builders of the TGD left issues that can be addressed after the dam is built to, well, after the dam is built.

Dam was completed in 2006. Problems acknowledged in 2011. That's not even taking into account the long construction process.

If that is considered taking it seriously, which takes 5 years for remedies start being implemented, that's fine by me.

Finally, it doesn't matter how many times you repeat "124 billion yuan", it is still meaningless without knowing the income that TGD generates. So what if it cost 185 billion to build? If it takes 100k to start a business, and that business costs 80k a year to run, does that automatically mean it's a bad investment??

Let's see:

Construction cost: 185 billion yuan
Annual operating cost: ~13 billion yuan (from 2009 annual report)
Annual profit: ~12 billion yuan

Based on those figures only, it will take TGD slightly over 15 years to recoup its cost (assuming no interest on construction cost if it is a loan, no increase in operating cost due to equipment getting old and no shareholder payout).

Add in extra cost of 124 billion yuan to remedy problems identified puts the cost of TGD at 309 billion yuan. It also means that it will now take ~25 years to recoup the cost (assuming no interest on construction cost if it is a loan, no further problems that require remedy, no increase in operating cost due to equipment getting old and no shareholder payout).

Hence, from a purely financial perspective based on the above figures and assumptions, TGD is essentially a loss-making project for 25 years (quarter of a century).

In reality, operating cost will almost always go up due to:
1. Equipment wear and tear over time, which requires more maintenance or replacement
2. Pay rise for the people running the place (unless the people are employed with fixed wages for the entirety of their career there)
3. There is always interest to be paid on loans

Based on the 2009 annual report for TGD Corporation (link below), the profit margin has been decreasing from 60.34% in 2006 to 50.20% in 2009 despite increasing revenue. This points to a substantial increase in operating cost from 2006 to 2009 (~4 billion yuan in 2006 to 13 billion yuan in 2009). Whilst this trend coincides with an increase in installed capacity at TGD, it is nonetheless a worrying trend.

When the 2010 annual report comes out, it will provide a clearer picture whether the annual operating cost of TGD has stabilised, or is continuing to increase. The implication is that with a lower profit margin, TGD will take even longer to break even.

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solarz

Brigadier
Most cost-efficient by what measure?
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note the wind and solar energy costs.


Dam was completed in 2006. Problems acknowledged in 2011. That's not even taking into account the long construction process.

If that is considered taking it seriously, which takes 5 years for remedies start being implemented, that's fine by me.

What are you trying to argue? That they should have predicted every single ramification of the project before or immediately after construction? I didn't realize the Chinese employed Eldar Farseers.

That the TGD will have enormous environmental impact is widely acknowledged. The specific form of that environmental impact is difficult to predict. To take the software analogy again, finding problems and fixing them is an ongoing process, continuing long after initial release (or end of construction).

Let's see:

Construction cost: 185 billion yuan
Annual operating cost: ~13 billion yuan (from 2009 annual report)
Annual profit: ~12 billion yuan

Based on those figures only, it will take TGD slightly over 15 years to recoup its cost (assuming no interest on construction cost if it is a loan, no increase in operating cost due to equipment getting old and no shareholder payout).

Add in extra cost of 124 billion yuan to remedy problems identified puts the cost of TGD at 309 billion yuan. It also means that it will now take ~25 years to recoup the cost (assuming no interest on construction cost if it is a loan, no further problems that require remedy, no increase in operating cost due to equipment getting old and no shareholder payout).

Hence, from a purely financial perspective based on the above figures and assumptions, TGD is essentially a loss-making project for 25 years (quarter of a century).

Sorry, but no, you're confusing the terms. Annual profit of 12 billion yuan, with additional costs of ~12 billion yuan per year for fixing environmental problems means breaking even for 10 years. It does NOT mean it's a loss-making project for 25 years!

To take the business analogy again, if it cost me 309k to start the business, and I make a profit of 12k a year, it means that it'll take ~25 years to recover my investment, it doesn't mean I'm losing money for 25 years!
 

Spartan95

Junior Member
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note the wind and solar energy costs.

So, is the cost of resettling a million people included in that cost (since that projection is done by the US Department of Energy)?

What about the cost of fertile, arable land that is now permanently underwater? Land that can be used to produce food to feed PRC's population? Is that included in the cost?

What are you trying to argue? That they should have predicted every single ramification of the project before or immediately after construction? I didn't realize the Chinese employed Eldar Farseers.

That the TGD will have enormous environmental impact is widely acknowledged. The specific form of that environmental impact is difficult to predict. To take the software analogy again, finding problems and fixing them is an ongoing process, continuing long after initial release (or end of construction).

And you seem to continue to ignore the fact that the problems now acknowledged were already brought up during the planning process for the project in the 90s. So, if they were taking the negatives seriously, why wasn't anything done about potential problems that were identified until 5 years after completion?

Sorry, but no, you're confusing the terms. Annual profit of 12 billion yuan, with additional costs of ~12 billion yuan per year for fixing environmental problems means breaking even for 10 years. It does NOT mean it's a loss-making project for 25 years!

To take the business analogy again, if it cost me 309k to start the business, and I make a profit of 12k a year, it means that it'll take ~25 years to recover my investment, it doesn't mean I'm losing money for 25 years!

Huh?

If as you say, it takes 10 years of profit to pay for the 124 billion yuan cost of fixing the problems, there is still the original cost of 185 billion yuan that is not paid for yet.

Or are you using double accounting where 12 billion yuan of profit can be used to pay for 12 billion yuan of problem fixing + 12 billion yuan of the cost of construction?

By the way, in case you haven't realised, I have not factored in inflation for simplicity's sake. If inflation is factored in on the original 185 billion yuan cost of construction, it will take even longer for the TGD to reach the break even point.

Just to illustrate this point, assuming the cost of 185 billion is in 2006 dollars, and assuming inflation averaged 3% per year from 2006 to 2011, the cost of construction in 2011 dollars would have been 270.68 billion yuan.
 

solarz

Brigadier
So, is the cost of resettling a million people included in that cost (since that projection is done by the US Department of Energy)?

What about the cost of fertile, arable land that is now permanently underwater? Land that can be used to produce food to feed PRC's population? Is that included in the cost?

And what about the value of flood control, saving thousands of lives and billions of dollars of property from damage each year?


And you seem to continue to ignore the fact that the problems now acknowledged were already brought up during the planning process for the project in the 90s. So, if they were taking the negatives seriously, why wasn't anything done about potential problems that were identified until 5 years after completion?

They were brought up, but were they identified specifically enough to come up with an actionable plan?


Huh?

If as you say, it takes 10 years of profit to pay for the 124 billion yuan cost of fixing the problems, there is still the original cost of 185 billion yuan that is not paid for yet.

Or are you using double accounting where 12 billion yuan of profit can be used to pay for 12 billion yuan of problem fixing + 12 billion yuan of the cost of construction?

By the way, in case you haven't realised, I have not factored in inflation for simplicity's sake. If inflation is factored in on the original 185 billion yuan cost of construction, it will take even longer for the TGD to reach the break even point.

Just to illustrate this point, assuming the cost of 185 billion is in 2006 dollars, and assuming inflation averaged 3% per year from 2006 to 2011, the cost of construction in 2011 dollars would have been 270.68 billion yuan.

What's so hard to understand? 2009 profits are ~12 billion yuan. Assuming this profit stays the same for 10 years, that's enough to finance the 124 billion needed to fix environmental problems identified.

What's the hurry is recovering the construction cost? The TGD is a state project, and China is currently sitting on trillions of USD in foreign reserves, so it's not like China had to go into debt to finance the project.

Finally, electricity prices also tend to rise with inflation.
 

Spartan95

Junior Member
And what about the value of flood control, saving thousands of lives and billions of dollars of property from damage each year?

And TGD was the only way to control flood?

The massive water diversion project isn't a way to control flood?

Also, the value of the arable land is going to be keenly felt in the years ahead:

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China to import grain to meet domestic needs: Standard Chartered
08:55, January 07, 2011

China will have to import grain to meet its domestic needs in the near future, which will mark the end of the country's self-sufficient policy on grain products, Caijing.com.cn reported Wednesday, citing a Standard Chartered report.

Standard Chartered said that there are concerns about China's grain output because of the slow development of cultivated land due to fast process of urbanization, the aging tendency of rural labor force and water scarcity. Though the transgenic technology will help China's productivity, the country will still have to import grain.

China's most severe grain shortage will involve corn, which the country will have to import from Brazil, Argentina and the US.

Statistics from the General Administration of Customs show that, from January to July last year, China imported 38.47 million tons of grains, up 20.5 percent year-on-year. The quantity of corn imported was 56 times the amount of the same period in 2009. The National Grain and Oils Information Center also said that China produced 14.5 million tons of soybeans in 2010, but imported 47.5 million tons from abroad.

Li Guoxiang, a researcher at the Rural Development Institute of the Chinese Academy of Sciences, said that the central government has adopted a new understanding of food security compared with the previous "self-sufficient strategy". China will gain supplies from both domestic and international markets, changing the current passive grain product import to fulfill shortages to active import to improve diversities of supplies. And the country will ensure its general self-sufficiency in cotton, sugar and vegetables - and a more than 40 percent self-sufficiency rate in vegetable oil.

Source: Global Times

The value of lost food produce from the arable land was only accounted once, when the TGD was built. This is not accurate as the land can produce food every year. The value of lost food production should should be counted as an annual recurrent cost to better reflect the benefit-cost of TGD.

They were brought up, but were they identified specifically enough to come up with an actionable plan?

And you say this because?

When the potential problems were identified, they were steamrolled over (its mentioned in the original article). Once they were steamrolled over, even if there was an actionable plan proposed, it will hardly be implemented now, will it?

What's so hard to understand? 2009 profits are ~12 billion yuan. Assuming this profit stays the same for 10 years, that's enough to finance the 124 billion needed to fix environmental problems identified.

What's the hurry is recovering the construction cost? The TGD is a state project, and China is currently sitting on trillions of USD in foreign reserves, so it's not like China had to go into debt to finance the project.

Finally, electricity prices also tend to rise with inflation.

1. You are not taking into account inflation, asset depreciation, etc. Given the rate of inflation in PRC over the last decade (much more than the 3% I used), and compounding it over time, it is actually quite possible that the cost of the construction (not including the 124 billion needed to fix the problems) will never be recouped. If this is the case, it means that the net cost of TGD exceeds the net benefit (not taking into account the loss of annual food production from the flooded arable land).

2. Sitting on massive reserves does not mean that the country should undertake projects where it is difficult (or impossible) to recoup its investments.

3. Electricity rises with inflation. So does the outstanding loan. Can operating costs be capped? If not, its a vicious cycle where the outstanding loans will grow so fast that it is not repayable without drastic measures.
 

Player 0

Junior Member
Not wanting to restart a flame war or anything, but i think this issue is too complex, interesting and warrants some really serious discussions that can't be understated.

Here's an argument for the pro-dam camp.

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Will the Three Gorges Dam Stand the Test of Time?


FLOOD DEFENSE: The Three Gorges Dam on July 31. In this year's flooding season, the dam, China's largest flood-control project, stored 15 billion cubic meters of floodwater (ZHENG JIAYU)


After successfully containing the biggest flood this century, the Three Gorges Dam, on the upper reaches of the Yangtze River in central China's Hubei Province, has encountered another flood, that of public opinion: Will this dam be able to hold floods that are "once-in-10,000-years" or "once-in-1,000-years" or "once-in-a-century"? Should numerous hazards this year, including land and mudslides and mountain torrents, be blamed on accumulation of sediment caused by the construction of the Three Gorges Dam? To get answers to these questions, journalists from Xinhua News Agency interviewed Cao Guangjing, Board Chairman of the China Three Gorges Corp., the operator of the Three Gorges Dam.

Netizens have collected several articles about the flood-control capacity of the Three Gorges Dam. In these articles, its capacity was differently described as tackling flooding "once-in-10,000-years," "once-in-1,000-years" or "once-in-a-century." Can you give the specifics of the flood control capacity of the dam?

Cao Guangjing: "Once-in-x-years" is a statistical concept based on the hydrology records of the Yangtze River and other historical information. For instance, the so-called "once-in-10,000-years" refers to flooding with peak flow as much as 113,000 cubic meters a second, while "once-in-1,000-years" is 98,800 cubic meters a second and "once-in-a-century" is 83,700 cubic meters a second. But "once-in-a-century" doesn't mean a flood of a given size would occur exactly every 100 years but means, over a very long period of time, it happens every 100 years on average. The peak flow this year reached 70,000 cubic meters a second, which can be termed "once-in-15-years."

The Three Gorges Dam itself was designed to a standard of containing flood "once-in-1,000-years" and was tested at a standard of 1.1 times of a flood "once-in-10,000-years." That's to say, even facing a flood of such a magnitude that it occurred only once in 10,000 years, the main body of the dam would still be safe. When facing a flood of the size of "once-in-1,000-years," the dam would ensure safety of the downstream Jingjiang River valley by adjusting discharge. Even if facing a "once-in-10,000-years" flood, the dam would function together with the Jingjiang flood-diversion area to ensure the safety of the Jianghan Plain area.

In the past few years and also at our press conference on July 19, we have been elaborating on different anti-flooding effects the dam would have in the circumstance of "once-in-a-century," "once-in-1,000-years" and even "once-in-10,000-years" floods.

What was the anti-flooding effect this year?

Practice this year shows the Three Gorges project has been very successful. In 1998 Yangtze flooding, the flow peaked at 63,000 cubic meters a second and the government had to provide more than 10 billion yuan ($1.47 billion), millions of people and hundreds of thousands of servicepersons to fight the flood. This year, the biggest flow into the Three Gorges Reservoir was 70,000 cubic meters a second on July 20. The dam discharged water at about 40,000 cubic meters a second, and residents in the downstream area handled it with ease. With the dam adjusting and reducing discharge, water levels never rose above alert lines in the middle and lower reaches of the Yangtze River. By rough estimation, it avoided the necessity for hundreds of thousands of people to patrol the river, which saved tens of millions of yuan in loss of work time and food allowances. Meanwhile, only one third of the flood-control capacity of the Three Gorges Reservoir was used and the situation did not become critical.

When the flood peak was over, we could see trash floating everywhere in the reservoir. It's reported this will threaten the safety of the dam. What's the real condition?


SHARP CONTRAST: Thanks to the Three Gorges Dam, the Jingjiang section of the Yangtze River is now under much less pressure when dealing with flooding. The top picture was taken on July 22, 2010. The picture below was taken in 1998 (XINHUA)


It's an international problem dealing with floating trash in reservoirs on waterways. Floating trash has a great influence on quality of water as well as on navigation and power generation. But it won't affect the safety of the Three Gorges Dam. In every flooding season, floating trash would appear in the Three Gorges Reservoir or nearby tributaries of the Yangtze River whenever there was a deluge. This year, after the flood peak, the flotation area in front of the dam exceeded 10,000 square meters. Every year, the China Three Gorges Corp. deploys a large quantity of manpower and capital to clear the trash.

On July 19, Chongqing upstream from the Three Gorges Dam encountered its biggest flood in history, and Chaotianmen Wharf in the city's downtown area was inundated. There were rumors the situation in Chongqing was related to floodwater storage and detention at the Three Gorges Dam during the flooding. What is your comment?

When building the dam, we used the alpine landform of the upstream and relocated residents below the designated water line to form a certain capacity for the reservoir. On July 19, the water level reached 185 meters in Chongqing, while the water level in the dam was about 150 meters. The backwater of the reservoir didn't even reach Chongqing. So the flood detention didn't have any impact on flood discharge in the city.

The middle and lower reaches of the Yangtze River are flat and have a large population. If they were submerged, there would be a huge loss. The upstream is mostly mountainous areas, which has larger areas to handle flooding. The anti-flooding function of the Three Gorges Dam is mainly to protect the middle- and lower-reaches areas.

The Yellow River turned into "an overground river" after the construction of the Sanmenxia Dam in the 1950s due to sediment deposits. As a result, the problem was the center of discussion before building the Three Gorges Dam. How serious is it?

The basic solution for sediment deposits is to adjust the discharge. We followed the problem closely during experimental water storage of the reservoir. Recently, with reservoir construction and soil conservation efforts in upstream areas, the amount of sediment in the reservoir has decreased greatly, and is now only 40 percent of the expectation during the dam's designing. We previously estimated the capacity of reservoir would be 85 percent of the original amount after being used for a century, but judging from the current condition, it may be more than 90 percent.

Some foreigners said, "China used to say the water line is 180 meters and the reservoir capacity reaches about 20 billion cubic meters. But the final water line is just 175 meters and reservoir capacity exceeds 22.1 billion cubic meters." How do you explain the differences?

There were several proposals about the water line during feasibility studies, such as 180 meters, 170 meters and 160 meters. In the final plan, which was approved by the Central Government in 1992, it is 145-175 meters according to needs of flood control. The reservoir's flood-control capacity, which is 22.1 billion cubic meters, is strictly calculated based on that plan.

In this flooding season, there were many hazards in the Yangtze River valley, including rainstorms, mountain torrents, land and mudslides, and urban flooding. Some people have attributed this to the water storage of the Three Gorges Reservoir. Is it true?

The Three Gorges Dam is partly blamable for landslides along sections of the Yangtze River and some tributaries affected by water storage. Rainstorms and mountain torrents have nothing to do with the dam. It's a bias of interpretation to connect these hazards with the dam.

Before the dam was built, hundreds of thousands of dams had been built around the world. Although having the largest power generation installed capacity worldwide, the water storage capacity of the Three Gorges Reservoir ranks only 22nd in the world. Operation of large reservoirs in the past shows, in the early period of water storage, areas around the new reservoir were unsteady. During that time, geological hazards happened frequently. After years of water storage and drainage, these areas stabilized gradually. We can say that no country in the world has done such comprehensive reconnaissance of and planning for the conditions of geological hazards alongside a reservoir and paid such a price for managing them as China. Since the first water storage in 2003, although there have been a few landslides, there have never been casualties or huge property losses. This is a marvelous achievement.
 

Player 0

Junior Member
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Also anyone ever thought of the viability of dredging as a solution?

China hardly wants for food security either, if this is an issue to consider.

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As according to this UN report China maintains a 95% level of self-sufficient agriculture.
 
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