Foreword
    China is a country rich in small hydropower, with its hydropower potential ranking the first in the world. Under comrade Deng Xiaoping's proposal and with the support from the Party committees and governments at all levels, the rapidly developed rural hydropower has played a vital role, since China's reform and opening-up, in solving the problem of rural electricity consumption as well as promoting the poverty alleviation of peasants and the economic and social development of rural areas. Later into the new period, SHP-based rural hydropower won extensive praise from all social sectors for its exceptional role in ecological construction, environmental protection and energy-saving and emission-reduction project in mountainous areas. Especially in the low temperature raining snow and disaster in southern part and Wenchuan earthquake of the first half year of 2008, rural hydropower gave full play to its advantage as distributed energy, thus playing an important part in safeguarding the grid safety and disaster resistance and mitigation.

1. History of small hydropower development in China

    Prior to the reform and opening up, China's small hydropower featured slow development pace, small scale and scattered independent power supply with the installed capacity less than 7,000,000kW. After the reform and opening up, water departments at all levels engaged themselves in the building of small hydropower in combination with river treatment and electricity construction. The state also encouraged the building of small hydropower by the local governments and farmers. In 1982, comrade Deng Xiaoping noted during his inspection tour in Sichuan that "in the development of small hydropower, should the central government and the State Council submit a policy, both the masses and the country would be benefited. That is invigoration, or rather mind emancipation." It started up the path of rural electrification with Chinese characteristics. Up to now, China has become a well-deserved kingdom of small hydropower. China's success in realizing rural electrification by means of developing small hydropower has drawn the world's attention. In addition, China's technology and experience in developing small hydropower has been widely popularized in many developing countries with great success. To some extent, progress of SHP development since the reform and opening up is the epitome of rapid economic and social development in China.

1.1 Reform and opening up hastened parturition and pushed the development of rural hydropower

    China's hydropower generation began with small hydropower. At the beginning of last century, China's first small hydropower station Shilongba station was constructed in Kunming, Yunan. But due to financial, technological and institutional constraints, by the end of the 1970's, China's SHP didn't develop fast. Besides, owing to shortage of power, the state grid couldn't afford to be extended to the rural areas so that hundreds of millions of people in the rural areas lived without electricity.

    Demand for power increased after the reform and opening up. After the 3rd Plenary Session of the 11th CPC Central Committee, the Party shifted to focus its efforts on economic construction. The restoration of production and the surge of consumption capacity brought the problem of weak power infrastructure into light. Electricity limitation in urban areas and blackouts in rural areas severely crippled the improvement of people's living standards and the development of the national economy. At that time, the state financial standing and the technology level was far from meeting the ever-increasing power demand. It was the objective reality that required that the state must do something to change the power development model, fully mobilize the initiatives of all sides and speed up the power development and popularization.

    Construction of pilot counties of rural electrification of primary level started. In 1982, during his investigation and study at the grass-roots, comrade Deng Xiaoping spoke positively of the approach of "develop small hydropower self-reliantly and solve the local electricity problem", which started up the path of realizing rural electrification through developing small hydropower. By means of policy support, financial subsidy and technological training, the state built pilot counties of primary rural electrification and encouraged the local governments and farmers to develop small hydropower to solve electricity problem and start up a path of rural electrification with Chinese characteristics.

    After 30 years of unremitting efforts, by the end of 2007, China had built more than 45,000 small hydropower stations with a total installed capacity of about 50 million kW and annual generation of 150 billion kWh, accounting for 1/3 of the total hydropower nationwide. 1/2 of the territory, 1/3 of the counties and over 300 million people of the country had access to electricity through developing SHP. Rural hydropower, which was developed in the rural areas and in return served agriculture, countryside and peasants, was spoken highly positively by the CPC Central Committee and the State Council and meanwhile fully recognized by the local Party committees and governments at all levels. In addition, it not only gained the vigorous support from the masses, but also won extensive praise from the United Nations and the whole world.

1.2 Rural hydropower faces challenges

    From the end of the 1900s, the state began to deepen its reform in investment and power system and started its rural power grid refurbishment project, actively promoting the policies of "self-construction, self-management and self-consumption", "electricity for electricity" and "SHP should have its own supply area".

    At the same time, private capital flooded into the field of small hydropower development, bringing about the craze for SHP development. The involvement of private capital facilitated the transformation from hydraulic energy resources to electricity commodity. But due to policy and management blemishes, a series of problems came up. First, seizure of resources; second, illegal construction, which jeopardized the public security; third, deviation from the direction of supporting agriculture, which went against the interests of farmers; fourth, severe impact on the ecological environment. The above-mentioned problems served as a reminder that we should gradually perfect the policies of rural hydropower, strengthen the management, adhere to the direction of serving agriculture and pay attention to environmental protection while exploiting resources. In a word, rural hydropower development is facing tough challenges.

2. Small hydropower plays a big role

2.1 Raising the level of rural electrification

    From 1983 onwards, the State Council decided to construct rural hydropower-based primary electrification counties. From the "Seventh Five –year Plan" period to the "Ninth Five-year Plan" period, altogether 653 rural counties of primary electrification were set up, among which over 82% were in the central and western regions and 80% were remote and poor areas. During the "Tenth Five-year Plan" period, another 400 counties of primary electrification were erected with an average increase in installed capacity of 3,000 kW as well as annual generation of 100 million kWh for each county. Still another 400 counties of the "Eleventh Five-year Plan" are under going.

    After 30 years of painstaking efforts, there are currently 1500 counties or cities with small hydropower stations, among which 600 counties mainly get electricity supply through small hydropower, over 200 counties have a complete set of SHP grid and more than 3000 counties have self-supply area. As for the 400 counties of primary electrification during the "Tenth Five-year Plan" period, the annual power consumption per capita and annual power consumption for daily life per household reaches respectively up to 644kWh and 547kWh, an increase of 85.6% and 72% compared to that of the late "Ninth Five-year Plan" period.

2.2 Pushing the economic and social development in the rural areas

    Water resource is a competitive resource for the mountainous areas. Party committees and governments at all levels give prominence to the exploitation of water resource and development of rural hydropower so as to spur the local economic and social development and increase the revenues. In counties rich in water resource, the tax revenues obtained from rural hydropower accounts for a large proportion in its total fiscal revenues. Some counties, like Rucheng and Guidong counties in Hunan province and Ruyuan and Yangshan counties in Guangdong province, obtain half of its fiscal revenues from rural hydropower.

    Counties with rural hydropower are mostly located in those remote and poor minority regions. Through the development of rural hydropower, thousands of rivers are treated and reservoir storage capacity of 258.1 billion cubic meters is formed. The irrigation area is increased by 25 million Mu(15Mu= 1 hectare), which improve both the flood control and draught resistance capacity. Guidong county is a poverty-stricken county in Hunan province. After developing the local hydropower under shareholding system, the rural collective economy grew quickly with a salient increase in the per capita income of farmers. At present, the average per capita net income of farmers there exceeds 3000 Yuan (RMB), an increase by more than 5 folds compared to that of the year of 1999. In some villages, elders over 60 years can get a pension subsidy. The revenue from the development of hydropower also provides funds for the education, medical care, social security and other public welfares.

2.3 Improving farmers' productive and living standards

    Small hydropower featuring local exploitation, local grid formation and power supply for large areas helps solve the problem of electricity for those remote, dispersed and poor areas. Through developing small hydropower, the rural collective economy is consolidated and rural welfare undertakings are promoted. Moreover, the access to water and electricity in enclosed hilly villages together with accessible transportation and improvement of kitchen bring tremendous changes to farmers’ mental outlook.

2.4 Ensuring emergent power supply

    Small hydropower station is able to "black start", and has the feature of "locally exploited and supplying electricity to nearby places" to form SHP grid, most of which are able to operate isolatedly. When the main power network is broken and out of operation due to disasters, small hydropower stations will take its advantage of distributed power supply so as to resume the supply as soon as possible and safeguard the grid safety, thus effectively mitigating the loss caused by disasters. In the first half of 2008, in face of the two unexpected natural disasters, small hydropower has played a big role.

    (1) Medium and small hydropower props up a bright sky in the snow and ice disaster
    According to incomplete statistics, in the snow and ice disaster in January and February of 2008, power supply was ensured in over 200 counties and 2000 villages and towns during the Spring Festival and the period of main power network restoration by means of small hydropower. Besides, it played a crucial role in guaranteeing the smooth operation of Jingjiu, Yingxia, Yuhuan and Xiangqian railways.

    • Guarantee the smooth operation of railways
    Due to paralysis of the main power grid under disasters in the Tongren region of Guizhou province, Xiangqian and Yuhuai railway were out of operation. Under the leadership of the local government, the local power network consisting of 3 small hydropower stations implemented the "black-start", thus resuming the power supply within half an hour for the Dalong section of Xiangqian railway, which not only enabled the normal operation of the railway, but also provided electric source for the start operation of Dalong thermal power station.

    • Safeguard the urban stability
    Under the circumstance of disfunction of the State Grid and Southern Grid, electricity supply was not interrupted in the city proper and its 5 affiliated counties of Huaihua City, Hunan province by means of local SHP, and all townships and 80% villages in the SHP-supply area have resumed normal supply of electricity before the Spring Festival.

    • Ensure the power supply for the rural areas
    By means of small hydropower, 13 towns inclusive of Dabujiang, Longxingshi and Yangtang of Yongjiang county, Zhuzhou, Hunan province, resumed the power supply for all the towns and the nearby 100 villages without any electricity supply from outside channel. Among the 76 towns with power supplied before the Spring Festival, 51 towns obtained electricity from small hydropower stations and 25 towns recovered electricity supply through connecting to the grid.

    • Guarantee the operation of distribution network
    From the late January to the early March, due to damage of main passage
of the West to East Electricity Transmission project, the T-connected Guibei grid in Guangxi became disconnected operation. However, due to power insufficiency for lack of coal, more than 20 counties in Guibei ran with the help of power supply from small hydropower stations until the early March when the main power grid was resumed.

    • Ensure the emergent standby
    Nainbadu and Shuangxikou town in Zhejiang province are located in the mountainous area. On 30th, Jan., the two towns were fully black-out. As the main power grid couldn’t be restored within short time, upon receiving the notice of temporary power supply, staff of Xiaogangling and Laofoyan stations did their utmost in spite of harsh weather and difficulties in fixing up the damaged route and setting up the temporary power supply route. On 5th Feb., the two towns resumed power supply until the main power grid was resumed on 21st Feb.

    (2) Small hydropower lights up thousands of households after the earthquake
    After the May 12th earthquake, the main power grid in some heavily-hit regions suffered power loss so that people were suffering from darkness together with severe personnel and property losses. It definitely would take a long time to resume the power supply in the quake-hit regions, because the landslide blocked the transmission lines. Under such circumstance, the local people resumed power supply for many regions within short time by restoring the small hydropower stations and its distribution network, providing effective assistance for the disaster relief work.

    • Through emergent repair of Xiazhuang station nearby the county proper（12750kW）, power was supplied for the relief-work headquarter, hospitals and telecommunication since May 15th under isolated operation.
    • Qingchagou station(800kW) and Jingzhou station(320kW) were restored in no time under assistance of the Armed Police staffs and resumed power supply for the relief-work headquarter, hospitals, water supply companies and telecommunication under isolated operation. From May 12th to June 1st, 12 stations were restored in succession in Mao county, resuming power supply for 60% of the towns and villages.
    • Lixian station and Hongye II cascade station were restored after the earthquake and resumed power supply without delay.
    • Small hydropower guaranteed power for several towns in Pengzhou. Longcao hydropower station resumed power supply for daily life after restoration on May 25th, and the entire power supply was resumed at the beginning of June.

2.5 Promoting energy-saving and emission-reduction

    With small scale, storage capacity and little impact on the environment, small hydropower is a recognized green renewable energy.

    Small hydropower replaces fossil fuel energy and is effective in reducing the discharge of pollutants. In 2007, the total power generation by rural hydropower reaches 150 billion kWh, accounting by the standard coal consumption of thermal power plants 334g/kWh, effect of SO2 emission 5.7g/kWh and CO2 emission 1050g/kWh, in the whole country, it is equivalent to a reduction of 50 million tons of standard coal, 860,000 tons of sulfur dioxide and 160 million tons of carbon dioxide discharge.

    In the process of rural electrification, the project of "SHP replacing fuel wood" plays a vital role in improving people's livelihood and protecting the forest vegetation. Especially since 2003, the kick-off of the pilot project of "small hydropower replacing fuel wood" provided the farmers with cheap electricity, thus changing the traditional way of cutting woods for fuel, preserving the vegetation, enhancing the project of "return farmland to forest", avoiding water loss and soil erosion and regaining the green hills and water. Pilot project scored great success in 2003 and 2004, over 200,000 farmers use hydropower for fuel. 300,000 Mu farmland is returned to forest and 1,560,000 Mu forest is preserved. Currently, the extension of pilot project is in full swing.

2.6 Small hydropower in China pushes the development of global small hydropower

    The development of rural hydropower in China effectively realizes the balanced development among economy, population and resources in poor areas and is highly evaluated by the whole world. The international SHP organization, consisting of 62 countries and regions, more than 130 governmental and international organizations, is headquartered in Hangzhou, China. It is the first international organization set up in China under the legal framework of the Untied Nations law. The development of small hydropower in China will have significant influence on that of global dimension.

3. Withhold the principle of serving agriculture, countryside and peasants, firmly promoting the reform and development of rural hydropower

    In June of 2006, Premier Wen Jiabao gave special instruction. He is quoted as saying that the development of small hydropower should go hand in hand with preservation of farmers' interests, local development, environmental protection and ecological construction in a scientific, orderly and sustainable way. It has been clearly pointed out in the No.1 documents of the central government for several years that we should consolidate the administration of rural hydro energy resources and environmental protection, promote the construction of rural electrification, expand the scale and execution scope of "small hydropower replacing fuel project", step up input and loan support for the development of rural hydropower and further conduct rural grid refurbishment. It is clearly put forward in the report of the 17th CPC National Congress that we should accelerate the social building focusing on improving people's livelihood, building up ecological civilization and forming the basic industry structure, growth and consumption patterns of conservation of energy resources and environmental protection. Recently, the "Three Fix Schemes" by the State Council clearly define the responsibilities of the Ministry of Water Resources, namely conducting hydro energy resources investigation, guiding the development of hydro energy resources in rural areas and guiding the work of hydropower based rural electrification and the "small hydropower replacing fuel wood" project.
Rural hydropower is an important content of "water development for people's livelihood" and a great strategy related to the improvement of productive and living conditions of mass people in the hilly areas, and construction of harmonious society as well as building of new countryside. In accordance with the requirements of water development for people's livelihood by the central government and Ministry of Water Resources , we should study and put into practice of the scientific outlook on development and well perform the following work earnestly in the future:

3.1 Enhance the hydro-energy resource management

    China is rich in hydro-energy resources with exploitable SHP potential of 128 million kW, among which 37% has been exploited. Small hydropower resource in China covers 30 provinces (autonomous regions and municipalities) and over 1600 counties, mainly in the central and western areas, which is coincidence with the distribution of poor population and water and soil loss areas. In accordance with the requirements of scientific outlook on development, we should consolidate the planning and management of rural hydro-energy resources, actively promote the paid utilization of hydro-energy resources and its marketing allocation, realize the limited, orderly and paid development of hydro-energy resources and gradually establish the management system and mechanism of hydro-energy resources in rural areas in accordance with the requirements of socialist market economy.

3.2 Firmly guarantee the public security

    We should firmly guarantee the public security through formulating policies and regulations, strengthening the planning and administration work, standardizing the development process of rural hydro-energy resources, guiding social capital in the development of small hydropower in a fair, safe, orderly, environmental-friendly, technology-oriented way and reinforcing rural hydropower industry management centering on safety supervision to ensure the public security.

3.3 Stick to the principle of serving the farmers

    The origination and development of rural hydropower should be attributed to the efforts of farmers. So is the fruit. In line with Premier Wen's instructions, we should rationally utilize the regulatory measures related to finance, tax, power price, etc. and formulate laws and regulations beneficial for the farmers, with the aim of developing the local hydro-energy resources, improving the ecological environment and benefiting the local farmers. In addition, we should actively strive for the public financial input, guide the local sector to increase input and encourage the participation of various social entities in the rural hydropower for eventual formation of a sound development model of mutual promotion of SHP development with farmers' income raising, local development, environmental improvement and river treatment.

3.4 Expand the scale of the project "small hydropower replacing fuel wood"

    In accordance with the No.1 document of the central government in the continuous several years, the Ministry of Water Resource has completed the compilation of the 《National Small Hydropower Replacing Fuel-wood enrineering Project plan from 2009 to 2015》and will get it approved soon. We will actively coordinate and pay close attention to its prompt approval and implementation as soon as possible. The institutional system of the small project of the small hydropower replacing fuel-wood project needs further improvement and farmers' right in using electricity from the fuel-wood replacement project and obligation in preserving the forest vegetation should be clarified. A long-term mechanism of "state subsidy, market operation, farmers' involvement and social supervision" should be established.

3.5 Develop distributed energy

    Local development and nearby supply of electricity of SHP should be supported. It should be proposed that small hydropower should be included in the emergent power supply system. In the various stages of power system planning, construction and operation, we should take into full account the special advantage of distributed power source small hydropower in emergent power supply, and give full play to its roles in safeguarding grid safety and disaster mitigation.

3.6 Promote the advancement of the rural hydropower technology

    With the rapid development of distributed energy technology and expansion of information, energy storage and bio-energy technology, rural hydropower will usher in a new era of technological upgrade. The replacement of new high efficiency turbines and generators for out-of date hydro-generator units will increase output by more than 10%. The secondary electric equipment of hydropower plants constructed 10 years ago needs upgrading. More unmanned and remote controlled hydropower stations will be erected. New types of distributed power distribution equipment and highly efficient power storage devices will enable more distribution grid to be capable of isolated operation. The green energy system composed of hydropower, wind, solar energy and bio-energy is expected to form. The advancement in technology and equipment will enable rural hydropower to play a bigger role in serving the agriculture, countryside and peasants and promoting the development of renewable energy.