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Meeting global challenges while maximising values of river and energy

At the 2015 World Hydropower Congress, The Nature Conservancy promoted the potential for sustainable hydropower – particularly through system-scale approaches to planning and management – to result in more conservation of rivers and better outcomes for the people that depend on them.

Photo by Carlton Ward JrFor the 2017 Congress in Addis Ababa, Jeff Opperman and Michelle Lakly write about how the organisation draws from a 65-year history of providing evidence-based, bottom-line oriented solutions to demonstrate that this ‘Hydropower by Design’ approach makes financial sense for companies and economic sense for governments.

Let’s start with some context. 

The world confronts a series of intertwined global challenges: maintaining a stable climate, delivering ¬-energy to support prosperous societies and protecting healthy ecosystems. The solutions to those challenges read like a set of conundrums:

  • a continued rise in emissions of greenhouse gases (GHG) threatens to push the planet’s climate beyond safe and stable boundaries, and thus strategies to reduce emissions are needed urgently; 
  • the generation of electricity represents one of the largest contributors to global GHG emissions, yet electricity is also a fundamental driver of prosperous and healthy societies – and more than a billion people (17 percent of the global population) still have no access to electricity. 
  • a dramatic increase in electricity generation from sources with low GHG emissions is therefore the critical path toward achieving the goal of a stable climate while maintaining prosperous societies and increasing access to electricity to those who don’t have it;
  • hydropower is currently the world’s leading source of electricity with low GHG emissions, with large remaining technical potential. Further, hydropower is the leading mechanism for storing energy and stabilising grids—a service that will be particularly important as variable renewable sources, such as wind and solar, become a larger part of the energy mix; 
  • yet, hydropower causes significant negative impacts on resources that have great value, and these impacts – on sources of food or livelihood – tend to fall disproportionately on low-income rural communities and indigenous communities that often have few other options. A dramatic expansion of hydropower risks solving the climate crisis at the sacrifice of much of the world’s rivers and what makes them unique and economically valuable to, and loved by, people.

At the 2017 World Hydropower Congress, The Nature Conservancy and partners will share a new report – The Power of Rivers: A Business Case – that tackles these conundrums head on, showing that there are pathways that can navigate through them. Energy development and generation will always have some negative impacts. Tradeoffs are unavoidable.

Photo by Michael YamashitaIn this report, however, we will demonstrate that many impacts can be avoided or reduced, and that tradeoffs can be eased. Further, these solutions not only deliver value to the environment and communities, they also deliver value to governments, developers and investors. 

This reduction of impacts and easing of tradeoffs emerges by shifting the scale of the solution: decisions about how and where to build, or how to operate, can be moved away from the scale of individual projects and toward the scale of systems. In the business case, we will explore the potential for this system-scale approach – what we call ‘Hydropower by Design’ (HbD) – to achieve improved outcomes for people and nature during hydropower development and management. 

Recommendations for system-scale approaches are not new and have often been equated with lengthy, difficult processes that slow investment and/or produce unrealistic recommendations. We recognise that to make a difference, HbD must be seen as: 

  1. providing economic benefits to countries; 
  2. financially viable; and
  3. feasible to implement. 

This report is, therefore, organised as a ‘business case’, drawing on a series of quantitative case studies to demonstrate to governments, developers and funders that HbD can meet those expectations.  

  • Economic benefits to countries. In river basins across the world, hydropower development and management will interact with a range of water-management services, including water supply, flood-risk management and irrigation storage. Hydropower that is planned and operated as part of a larger system has the potential to increase the benefits from these services. However, hydropower that is not considered part of a system will tend to miss out on opportunities to benefit from these services and can, at times, even conflict with them. Further, new hydropower development is concentrated in those regions of the world where ecosystem services such as fisheries are most important to people, underscoring the need to find solutions that do not degrade one economic resource at the expense of another. HbD is focused on finding systems that minimise impacts to ecosystem services, and maximise opportunities for co-benefits with other water-management services. 
  • Financial viability. HbD approaches can provide financial value to investors in two ways. First, through ‘system design optimisation’, HbD can identify a set of system-level efficiencies, for flow management and infrastructure siting, that cannot be captured through a series of uncoordinated project-level decisions. Second, through ‘improved risk management’, HbD can guide site selection toward a portfolio of projects with a lower percentage of significant delays and cost overruns due to environmental and social risks.  
  • Feasible to implement. Countries facing urgent demands to increase electricity generation are understandably hesitant to embark on a strategic planning process if they believe it will delay the delivery of projects that can meet rising demand. By drawing on new modeling tools and promoting a process that brings together diverse objectives, data sources and families of models, HbD can deliver useful insights about development and management options in a relatively short period of time. Rather than delaying decisions or investments, these system-level tools and approaches may reduce project-level uncertainty and delay, thereby lowering investment risk. The financial benefits discussed above effectively provide a buffer which countries can use to pay for decisions that provide broader benefits or reduce environmental or social impacts. 

Overall, HbD aims to identify a strategic and sustainable system composed of bankable projects identified through an efficient process. We believe that demonstrating this business case – and spurring greater uptake and experimentation with system-scale solutions – can make an important contribution to achieving a world with a stable climate, prosperous societies and healthy rivers. 

We look forward to the conversation in Addis and finding new ways to partner across sectors to realise these broad benefits.

To learn more, and explore a series of quantitative case studies through download of the business case report, visit www.nature.org/powerofrivers