Drought-induced hydropower loss and thermal power substitution: CO₂ spillovers and sustainability challenges in China’s power sector

Climate-induced droughts increasingly threaten the reliability and sustainability of hydropower-dependent electricity systems, particularly in highly interconnected grids where local supply shocks can propagate across regions. However, their system-wide implications for fuel substitution and CO₂ emissions remain under-quantified. Using monthly panel data of China’s provincial power generation mix from 2010 to 2022, this study examines how runoff deficits affect hydropower output, generation portfolio adjustments, and drought-induced CO₂ emissions within an interconnected power system. We find that hydropower responses to runoff deficits are time-lagged, non-linear, and dependent on installed capacity. On average, a 1 kWh reduction in hydropower generation leads to a 0.257 ± 0.024 kWh increase in local thermal power generation. Moreover, drought impacts propagate through interprovincial transmission networks. During the 2022 summer drought, reductions in hydropower output in upstream electricity exporting provinces, particularly Yunnan and Sichuan, increased thermal power generation in downstream load centers such as Guangdong and Jiangsu. In contrast, downstream drought-induced shortages did not produce statistically significant feedback on upstream generation, reflecting the unidirectional structure of the transmission grid and reliance on local thermal power compensation. Overall, the 2022 drought reduced hydropower by 149.4 (±9.94) TWh and raised thermal power by 54.15 (±3.16) TWh, leading to an additional 52.86 (±3.06) Mt of CO₂ emissions through local substitution (74%) and interprovincial spillovers (26%). These findings highlight how drought risk is transmitted and amplified through interconnected power systems, underscoring the importance of drought-resilient grid planning and the provision of low-carbon backup capacity.