1.5　Research Application and Achievement Transformation

1.5.1　Application of Research Achievements in Zhejiang Province

Firstly,two provisions on developing and managing hydropower resources were issued.To improve hydropower resources management in Zhejiang,and promote rational development and exploitation,Zhejiang Provincial Department of Water Resources published

Interim Procedures on Management of Transferring the Right of Developing Hydropower Resources in Zhejiang,which was intended to regulate the acts of transferring the right of developing hydropower resources and establish a just,fair,and open investment environment.In the procedures,it was clearly stated that the paid transfer system for hydropower resources would be implemented starting from 2002,and apply to the whole province.Based on that,in September 2003,Zhejiang Provincial Department of Water Resources and Zhejiang Development and Planning Commission co-published the Provisions on Consolidating Hydropower Resources Development and Management for the purposes of rationally developing hydropower resources,further normalizing hydropower construction process,better dealing with development and protection,and facilitating sustainable utilization of hydropower resources.Resources compensation,and economic and ecological compensations for externality in hydropower development were put forward in the procedures,and all relevant cities and counties(prefectures)were required to strictly implement these compensations.

From then on,the paid transfer system and compensation mechanism for hydropower resources development have been carried out across Zhejiang,targeting at fulfilling responsibilities of approval,strengthening supervision and acceptance of hydro projects,and regulating hydropower resources management.

Secondly,Suichang and Songyang County,were chosen for implementing pilot projects.To actively and reliably push forward the hydropower resources management and development right transfer,Suichang and Songyang were chosen as pilot counties respectively in 2001 and 2002,before full-scale operation.The two counties formulated measures and rules for developing and managing hydropower resources in combination of the actual situations in the counties,exploring and implementing ways of paid transfer and compensation mechanism.

Suichang piloted the market mechanism.It took the lead in exploring and implementing marketization of hydropower resources allocation and formulated a complete system of market competitive allocation.On April 10,2002,Suichang County Bureau of Water Resources hosted open tendering for developing hydropower resources to build hydro plants.It was a nationwide precedent set for selling the development right of hydropower resources by public auction.The paid transfer system for developing hydropower resources,promoted by Suichang for the first time,was of great significance to the systematic innovation for the management of state-owned natural resources and was listed as one of the Ten Firsts of Zhejiang during the 30 years of reform and opening-up.

Songyang piloted the agreement transferring.It published a set of normative documents to timely organize the paid transfer of hydropower resources.Due to the small installed capacity and high unit power investment cost,only a few developers would respond to the auctions.Therefore,agreement transfer was much preferred.By December 2005,the development right of 22 plants were auctioned in Suichang,and development agreements of 24 plants were transferred in Songyang.

Thirdly,the practices were extended over the province.Based on the pilot projects,local rules or legislation were promulgated in all parts of the province and optimal hydropower resources allocation mechanism was established.It was widely publicized as one of the Ten Water Events in the Tenth Five-Year Plan period,and was introduced on the China Water Newspaper issued on December 17,2005.Many counties rich in hydropower resources carried it out,including counties of Wencheng,Tonglu,Qingyuan,Jingning,Longquan,Jiangshan,etc.In July 2017,the provincial conference of hydropower work was held by Zhejiang Provincial Department of Water Resources in Lishui,which summarized the experience of implementing paid transfer practice and three compensation mechanism,and promoted further applications.By the end of 2012,the hydropower resources for over 200 hydro plants were transferred in Zhejiang,totaling payment of about 300 million yuan.The experience and practices on mechanism innovation was in the front row of China,providing useful references for the unified management and sustainable development of hydropower resources,widely accepted by the rural hydropower industry over China.

1.5.2　Transformation of Research Achievements

1.A batch of high-quality academic articles and published works

Altogether 63 academic articles on the paid use and three compensation mechanism for hydropower resources development were published on professional journals,like Water Energy and Electrification in China,Rural Water Conservancy and Hydropower in China,and Small Hydro Power.Five books were published,including Technology and System and Study on the Water Resources Allocation Mechanism for Watershed in China by China Water&Power Press in 2007 and 2009.These achievements summarized what had been done in the research and played a significant role in promoting hydropower development.

2.Several patents successfully applied

In all 10 patents were successfully applied,for instance,Geographic Information Management Software for Hydropower Resources Zoning(patent No.2011SR040736),Decision-making Support system for Optimal Active Load Allocation of Rural Hydro Plants(patent No.2009SR057111),Smart Decision-making System for Optimal Allocation for Rural Hydro Plants(patent No.2012SR012066),etc.They ensured in a great extent the technological upgrading and technical reconstruction for the sake of the research and study.

3.Several awards received

For the past fifteen years,many achievements made by the research group have been recognized and praised by the Ministry of Water Resources and relevant provinces.The study was subsidized by a special fund of Zhejiang Provincial Department of Water Resources,and a fund for key project of the science and technology plan sponsored by Science&Technology Department of Zhejiang Province.The awards received include the first prize of Dayu Sci-Tech Award of the Ministry of Water Resources,the first prize of Zhejiang Water Sci-Tech Innovation Award,the second prize of Zhejiang Best Academic Articles of Natural Science,the first prize of Best Academic Articles of China Small Hydro Forum and so on.Several articles were included in the Almanac of China's Water Power.For instance,Interim Procedures on Management of Transferring the Right of Developing Hydropower Resources in Zhejiang was introduced in the Almanac of China's Water Power(2001-2002),Volume 7.The Study on Ecological Compensation Mechanism for Hydropower Resources Development and the Study on Market Allocation System for the Development Right of Hydropower Resources,both written by Ye Zhou,were included in the Almanac of China's Water Power(2006),Volume 11.

4.Achievements adopted and promoted by the government

The paid use system and three compensation mechanism for hydropower resources were distributed by the provincial government in official documents.The Interim Procedures on Management of Transferring the Right of Developing Hydropower Resources in Zhejiang was issued by Zhejiang Provincial Department of Water resources with document No.ZSD〔2002〕18.Some Regulations on Strengthening the Development and Management of Hydropower Resources was co-issued by Zhejiang Provincial Department of Water resources and Zhejiang Development and Reform Committee with document No.ZSD〔2003〕17.Both were popularized over the province.At the Provincial Hydropower Conference held in Lishui July 2006,the paid use of hydropower resources and three compensation mechanism were summed up and applied widely in Wencheng,Suichang,Xianju,Songyang,and Jiangshan.Papers exchanged at the conference were all published in the tenth issue of the magazine Water Energy and Electrification in China in 2006.During the implementation of Zhejiang Small Hydro Project under the China Renewable Energy Scale-up Development Program,which was supported by a long-term World Bank Loan of USD 19.50 million to build or rehabilitate 18 small hydro plants,the Three-Compensation mechanism was fully on the stage.At the National Hydropower Conference held in Hangzhou by the Ministry of Water Resources on May 16,2009,Mr.Huang Jianzhong,then Deputy Director-General of Zhejiang Provincial Department of Water Resources,promoted to the whole country Zhejiang's experience in developing and managing hydropower resources.Mr.Chen Lei,then Minister of MWR,affirmed that the Paid Use System and Three Compensation Mechanism practiced by Zhejiang contributed to the hydropower resources development.Mr.Tian Zhongxing,Director of Bureau of Hydropower of MWR,introduced that the research achievements on hydropower resources development in Zhejiang had already been promoted to more than 10 other provinces.

5.Achievements reported by media

On October 28,2003,China Water Resources News published an article titled Zhejiang Introduced Policies to Strengthen Hydropower Resources Development and Management.

On December 17,2005,China Water Resources News introduced the Paid Use System and Three Compensation Mechanism as one of the Ten Top Water Events in Zhejiang during the tenth Five-Year Plan period.

On October 27,2006,China Water Resources News introduced the paid transferring of hydropower resources in a report titled Paid Transferring of the Development right of Hydropower Resources in Zhejiang—A Move to Success.

In July 2006,at the forum on resources allocation marketization held by Lishui Municipal Party Committee and Municipal Government,Mr.Zhou Ye was invited to deliver a keynote speech,Institutional Research on the Market-directed Allocation of Hydropower Resources—Sustainable Small Hydro Development in Zhejiang,which was reported on newspaper Lishui Daily.On November 28,2006,Lishui Daily published a documentary coverage titled Clean Energy in the Green Valley—Record of Resources Allocation Marketization in Lishui to introduce of the practices the market hydropower resources allocation.On May 15,2009,China Water Resources News placed a special interview with Mr.Tian Zhongxing,Director of Hydropower Bureau of MWR,Implementing the Scientific Outlook on Development and administering strictly according to Law—to Realize the Scientific and orderly Development of Hydropower Resources,where he introduced that the Paid Use System and Three Compensation Mechanism for hydropower resources initiated by Zhejiang were applied to more than ten provinces.

1.5.3　Domestic Application

Since Zhejiang initiated the Paid Use System and Three Compensation Mechanism for hydropower resources,the MWR has paid sufficient attentions to them and followed them up.It started to promote these practices in 2003.On October 28,2003,China Water Resources News published an article titled Zhejiang Introduced Policies to Strengthen Hydropower Resources Development and Management.On October 27,2006,China Water Resources News introduced again Zhejiang's experience in hydropower resources development.

Officials from the water resources administration of Hubei and Guangxi provinces were delegated to visit Zhejiang to learn from its practices.One delegation led by two Deputy Chairmen of Hu'nan Provincial People's Congress Standing Committee took part in a study tour arranged by Zhejiang Provincial Department of Water Resources and learned from the piloting practices on hydropower management.The development right of hydropower resources were identified and certified in Chongqing and Guizhou to normalize and institutionalize hydropower management.By 2009,the Paid Use System and Three Compensation Mechanism for hydropower resources have been practiced in over 10 provinces,autonomous regions or municipalities(Tian Zhongxing,2009).The standing committee of Hunan and Jilin Provincial People's Congress issued regulations on developing and managing hydropower resources;Guizhou Provincial Government introduced measures on paid transferring of hydropower resources development right;Chongqing,Xinjiang,Anhui,Hubei and Shaanxi clarified in their local regulations the pertinent principles of hydropower resources management;Seven provinces,including Fujian,Guangxi,Guangdong,Hebei,and Sichuan,issued regulatory documents on developing and exploiting hydropower resources.At the National Hydropower Conference held in Hangzhou by the Ministry of Water Resources on May 16,2009,Mr.Chen Lei,the Minister of MWR,affirmed that the paid use system and three compensation mechanism practiced by Zhejiang.Mr.Tian Zhongxing,Director of Bureau of Hydropower of MWR,introduced the research achievements on hydropower resources development in Zhejiang and promoted Zhejiang's experience in developing and managing hydropower resources to whole China.

By 2016,in all 20 provinces have been carrying out the paid use system and three compensation mechanism for hydropower resources,contributing to the normalization of hydropower resources development and the establishment of an orderly market.Taking Guizhou for example,the development right of over 80 hydro plants has been transferred,totaling 181 million yuan in payment.In particular,Wujiang Hydropower Co.,Ltd.[5]paid resources transfer fee of 115.66248 billion yuan.In other words,Guizhou furthered Zhejiang's practices by expanding them to hydropower resources development of different types,either large or small hydro,established or newly built hydro plants.In Jilin Province,both established and newly built hydro plants are required to pay the transfer fee for the use of hydropower resources.For instance,Fengman Hydro Plant,built in the Manchu State period and in operation for over 70 years,is required to pay resources transfer fee at a price calculated for fifty-year duration,that is to say,every year it would pay one fiftieth of the total transfer fee.

1.5.4　Oversea Application

1.Paid use and three compensation mechanism practiced in WB-financed Renewable Energy Scale-up Development Program

China Renewable Energy Scale-up Development Program(CRESP)financed by the World Bank and granted by Global Environment Fund(GEF)aimed to analyze the current renewable energy resources in China and promulgate policies on China's renewable energy development by referring to the experience abroad.The program was intended to gradually realize the scale-up development of renewable energy and provide the electricity market with high-efficiency commercial renewable energy power.

After several rounds of direct negotiation between the WB experts and the research group members and comprehensive investigations,the WB chose four piloting provinces,namely Inner Mongolia,Fujian,Jiangsu and Zhejiang,for CRESP in 2004.Zhejiang Small Hydro Project under CRESP consisted of 18 small hydro sub-projects,falling in two parts,newly-built hydro plants and rehabilitation or reconstruction of existing hydro plants.The 7 newly built sub-projects with total installed capacity of 15.8 MW and annual design power output of 42.21 million kW·h,attracted total static investment of 119.81 million yuan.The 11 rehabilitation sub-projects with original installed capacity totaling 40.25 MW and investment of 147.38 million yuan would expand overall capacity to 51.96 MW and increase the power generation by 52.94 million kW·h.Upon the completion of the Program,16 sub-projects were completed with installed capacity of 49.89 MW and annual design power output of 129 million kW·h.6 new hydro plants were built with installed capacity of 13.6 MW with annual design power output of 35 million kW·h;10 small hydro plants were rehabilitated with installed capacity of 36.29 MW and annual design power output of 94 million kW·h.The total investment for Zhejiang Small Hydro Project under CRESP was 253.05 million yuan,of which 17.68 million US dollars were financed by the World Bank.By the end of December 2010,the sixteen subprojects have gained obvious economic benefits,the cumulative power output reaching 432 million kW·h,and electricity sales revenue of 186 million yuan.

Both NDRC and MWS recommended to the World Bank Zhejiang's practices of paid use and three compensation mechanism for hydropower resources,believing that they were more suitable for the WB-financed program.Pre-reviews were required for all sub-projects in this case.Zhejiang Provincial Hydropower Management Center(the Center)submitted due diligence report of each sub-project to WB for its pre-review.Based on the submitted due diligence reports,environmental impact assessment(EIA)reports,resettlement action plans(RAP),reports of independent dam safety panel and procurement plans,WB carried out preview work in accordance with its preview index framework where the threecompensation(resources,economic and ecological compensations)were included as technical indicators(see Table 1-4).During project implementation,the newly built hydro plants were required to abide by the paid use system established in Zhejiang.As seen from the project evaluation form below,EIA,number of resettlers,number of affected people,land requisition was all taken into assessment.

Zhejiang small hydro project learned from the World Bank's advanced project management experience.Taking the real situation in Zhejiang into consideration,it explored and practiced a package program management mode for WB-financed program.The three compensation mechanism was improved in several ways,including the public consultation and disclosure of environmental impact assessment,better indicator system and due diligence procedures for evaluating ecological impacts of dams and reservoirs.

The Project proved that small hydro rehabilitation could bring forth good economic,social and ecological benefits,and account greatly for capacity expansion,efficiency upgrading,energy saving and emission reduction.It also served as a good example for the World Bank to better practice ecological management and resettlement action in promoting hydropower development over the world.

2.Two study tours for delegations of Vietnam

Two delegations of Vietnam visited Zhejiang in 2006 and 2009 to learn from the experience of hydropower development and management.[6]

On March 27,2006,the delegation led by Mr.Le Tuan Phong,deputy director of Energy and Oil Department,Ministry of Industry,Vietnam,consisting of 11 members,carried out a one-week study tour in Zhejiang(See Figure 1-2).Chen Chuan,the director general of Zhejiang Water Resources Bureau,Huang Jianzhong,the vice director general of Zhejiang Water Resource Bureau,and Ye Zhou,director of the Center,received the delegation and introduced to them the hydropower resources allocation mechanism in Zhejiang and the implementation of WB-financed project.The delegation also had a profound discussion with the research group members on resources development policies,electricity fed-in price,rehabilitation technology,developer selection,and ecological protection in cascade hydropower development.A field trip to Anji,Huzhou was arranged for the delegation to enable better understanding the hydropower development in Zhejiang.

In August 2009,the delegation consisting of 13 members from the Ministry of Industry,Ministry of Finance,National Bank of Vietnam,and Bank for Foreign Trade of Vietnam conducted a one-week study tour in Zhejiang.A symposium was held on the hydropower development.The research group introduced to the delegation the small hydro in Zhejiang and the progress of WB-financed project.Experts of the Center and Zhejiang Design Institute of Water Conservancy&Hydroelectric Power also introduced hydropower technology,ecological protection and resettlement policies.The delegation did a field trip to Laotian Hydro Plant in Anji,Huzhou.Further exchanges were also made on institutional environment,pricing policies,and developer selection with the plant staff.

3.Visit of World Bank official on Zhejiang small hydro

On June 5,2006,Ms.Wu Junhui,Director of World Bank Energy Department,held a meeting with Mr.Chen Chuang and the research group on the small hydro development in Zhejiang and the preparation for WB-financed project.It was known that one of her visit goals was to find a way of promoting Zhejiang mode of hydropower development to the WB-financed projects in other countries.That meant the small hydro development,management and institutionalization in Zhejiang had been recognized by the World Bank.

Ms.Wu Junhui fully affirmed the achievements on hydropower development and research in Zhejiang.She also sufficiently exchanged ideas with experts and our research group on loan guarantee,environmental protection and project due diligence,and hoped that breakthrough be made on regional small hydro resources development and management and good experience be accumulated for further promotion(Figure 1-3).