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May 2020

IHA publishes 2020 Hydropower Status Report and Covid-19 paper

28 May 2020 

The Covid-19 pandemic has underlined hydropower’s resilience and critical role in delivering clean, reliable and affordable energy, especially in times of crisis. This is the conclusion of two new reports published today by the International Hydropower Association (IHA).

The 2020 Hydropower Status Report presents latest worldwide installed capacity and generation data, showcasing the sector’s contribution to global carbon reduction efforts. It is published alongside a Covid-19 policy paper featuring recommendations for governments, financial institutions and industry to respond to the current health and economic crisis.

“Preventing an emergency is far better than responding to one,” says Roger Gill, President of IHA, highlighting the need to incentivise investments in renewable infrastructure. “The events of the past few months must be a catalyst for stronger climate action, including greater development of sustainable hydropower.”

Now in its seventh edition, the Hydropower Status Report shows electricity generation hit a record 4,306 terawatt hours (TWh) in 2019, the single greatest contribution from a renewable energy source in history.

The annual rise of 2.5 per cent (106 TWh) in hydroelectric generation – equivalent to the entire electricity consumption of Pakistan – helped to avoid an estimated additional 80-100 million metric tonnes of greenhouse gases being emitted last year.

The report also highlights:

  • Global hydropower installed capacity reached 1,308 gigawatts (GW) in 2019, as 50 countries completed greenfield and upgrade projects, including pumped storage.
  • A total of 15.6 GW in installed capacity was added in 2019, down on the 21.8 GW recorded in 2018. This represents a rise of 1.2 per cent, which is below the estimated 2.0 per cent growth rate required for the world to meet Paris Agreement carbon reduction targets.
  • India has overtaken Japan as the fifth largest world hydropower producer with its total installed capacity now standing at over 50 GW. The countries with the highest increases in were Brazil (4.92 GW), China (4.17 GW) and Laos (1.89 GW).
  • Hydropower’s flexibility services have been in high demand during the Covid-19 crisis, while plant operations have been less affected due to the degree of automation in modern facilities.
  • Hydropower developments have not been immune to economic impacts however, with the industry facing widespread uncertainty and liquidity shortages which have put financing and refinancing of some projects at risk.

In a companion policy paper, IHA sets out the immediate impacts of the crisis on the sector as well as recommendations to assist governments and financial institutions and enhance hydropower’s contribution to the recovery.

The recommendations include:

  • Increasing the ambition of renewable energy and climate change targets which incorporate the role of sustainable hydropower development.
  • Supporting sustainable hydropower through introducing appropriate financial measures such as tax incentives to ensure viable and shovel-ready projects can commence.
  • Fast-tracking planning approvals to ensure the development and modernisation of hydropower projects can commence as soon as possible, in line with internationally recognised sustainability guidelines.
  • Safeguarding investment by extending deadlines for concession agreements and other awarded projects.
  • Given the increasing need for long-duration energy storage such as pumped storage, working with regulators and system operators to develop appropriate compensation mechanisms for hydropower’s flexibility services.

2020 Hydropower Status Report
hydropower.org/statusreport

IHA Covid-19 communications
hydropower.org/covid-19

 

 

Join the conversation

On social media use the hashtag #hydropower2020

Comment on the report in Hydropower Pro, our online community.

 

Media enquiries:

Will Henley, IHA Head of Communications
communications@hydropower.org

18 May 2020

In an unprecedented joint statement, 16 international and national organisations representing the global hydropower sector today set out guiding principles for energy infrastructure policy in the Covid-19 recovery.

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The organisations represent hydropower developers, operators, manufacturers, researchers and innovators including the world’s largest hydropower producers in China, the United States, Canada and Russia, among other countries.

Their statement, coordinated by the International Hydropower Association (IHA), sets out how the coronavirus pandemic has demonstrated hydropower’s resilience and critical role in delivering power and water supplies to communities, industry and essential services.

Widespread uncertainty and liquidity shortages have however put financing and refinancing of many hydropower projects at risk. In some regions, new and upgrade projects have also been halted, contributing to a fall in confidence regarding future investments and operations.

The 16 organisations call on policy-makers to recognise hydropower’s vital importance to the clean energy transition, due to the unique services it provides to integrate and support variable renewables such as solar and wind.

“As the single largest source of renewable electricity with unique flexibility services to support the integration of variable renewable energy, hydropower will be vital to the future energy system. All countries that have achieved 100 per cent renewable electricity have relied heavily on hydropower.

“Furthermore, hydropower delivers vital means of managing freshwater, providing supplies for agriculture, homes and businesses, and mitigating the impacts of extreme weather events such as floods and drought.

“Yet hydropower’s contribution in maintaining system reliability has not been properly recognised, incentivised by policy makers or appropriately valued by the market," the statement reads.

The hydropower and generator associations set out the following principles for green and resilient infrastructure stimulus packages as they call on decision-makers to build more sustainable hydropower projects:

Call to action:

  • Ensure the recovery facilitates the development of sustainable hydropower projects as an essential part of the energy transition and wider development strategy to help kick-start our global economy. This should include modernisation and rehabilitation projects.
  • Focus on sustainable hydropower development to ensure that economically viable and shovel-ready projects can commence.
  • Where possible and within reason, fast-track planning approvals to ensure the development and modernisation of hydropower projects can commence as soon as possible to help stimulate the economy.
  • In regions where this applies, extend any construction deadlines for hydropower projects that have previously benefited from government programmes to secure the finance already committed.
  • Given the increasing need for long-duration energy storage such as pumped storage, work with regulators and system operators to develop appropriate compensation mechanisms that recognise and value all the attributes hydropower provides to the grid.
  • Not only maintain but increase the ambition of renewable energy and climate change targets which incorporate the role of sustainable hydropower development. This will instil much needed confidence in the sector.

The 16 organisations in addition stress the importance of all projects adopting good environmental, social and governance practices in line with the internationally recognised Hydropower Sustainability Tools.

Signatory organisations:

Country/region
 
Association:
 

Worldwide

International Hydropower Association (IHA)

Canada

WaterPower Canada

China

China Society for Hydropower Engineering

Colombia

ACOLGEN

Indonesia

Indonesia Hydropower Association

Kyrgyzstan

Small Hydropower Plants Association of the Kyrgyz Republic

Mexico

Mexican Association of Hydroelectricity

Mongolia

Small Hydropower Association Mongolia

Norway

Energy Norway

Norway

International Centre for Hydropower (ICH)

Poland

Polish Hydropower Association / TEW

Poland

Polish Association for Small Hydropower Development

Russia

Association "Hydropower of Russia"

Uganda

Hydro Power Association of Uganda

United Kingdom

British Hydropower Association

USA

National Hydropower Association (NHA)

Read the statement in full (pdf).

7 May 2020

Good practice guidance seeks Indigenous communities’ free, prior and informed consent for hydropower development

New sustainability guidance will give increased confidence to local communities, industry and investors that hydropower projects can be successfully developed while respecting Indigenous People’s lands, rights and culture.

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An Indigenous Peoples prayer ceremony at Nepal's UT-1 hydropower project

 

The Hydropower Sustainability Assessment Council, a multi-stakeholder group of social and environmental NGOs, industry, government and financial institutions, released the guidance as amendments to its Hydropower Sustainability Tools, which are used to assess and rate project performance. 

‘A bridge of faith’

Projects which achieve the Free, Prior and Informed Consent (FPIC) of affected Indigenous People will now be recognised as meeting international good practice in sustainable hydropower development. FPIC is a principle recognised in the UN Declaration on the Rights of Indigenous Peoples and is a condition of performance standards issued by the World Bank and International Finance Corporation.

Phurpa Tamang is an Indigenous People’s advocate who advised on the guidance as part of a specially appointed working group which included representatives of civil society and business. “Gaining consent is important because Indigenous People cannot be separated from natural resources due to religious, spiritual and cultural reasons and for livelihoods,” he said.

Phurpa helped facilitate a community consultation with Nepal’s Upper Trishuli-1 (UT-1) hydropower project, which successfully achieved the Free, Prior and Informed Consent of the affected Indigenous communities. “The FPIC process developed a bridge of faith and belief between developers and locals and became a kind of conflict management mechanism,” he said.

The new guidance updates language in the Hydropower Sustainability Tools’ Assessment Protocol and ESG Gap Analysis Tool, which previously required no major opposition instead of consent during stakeholder consultation.

To achieve good practice, a project will now need to demonstrate FPIC following the principle of proportionality with respect to the affected Indigenous Peoples’ rights at risk. Developers will also need to establish that good-faith consultation with Indigenous Peoples’ institutions has been carried out through a culturally appropriate, two-way process, with a mutually-agreed disputes procedure. 

Led by David Harrison, a water resources consultant and former board chairman of The Nature Conservancy, the working group reviewed existing safeguards and standards from international financial institutions and commissioned a study on international law.

“FPIC is not just an outcome, it is an on-going process of good faith consultation and negotiation,” Mr Harrison said. “The amendments help to make FPIC practical and effective. The first, the principle of proportionality, brings in a balancing between the degree of impacts and the rights of Indigenous People involved. The second is the increase of emphasis on the procedural aspects.”

Eddie Rich, CEO of the International Hydropower Association (IHA), said: “We know that community consultation, especially of Indigenous People, is one of the most important aspects of planning and developing any infrastructure project. This guidance will help developers and Indigenous People to work together, recognising their rights, livelihood and dignity, and will mean sustainable projects receive the investment they deserve.”

Juergen Schuol, Head of Sustainability at Voith Hydro, an international supplier of hydropower plant equipment, said: “With the FPIC amendments in the Hydropower Sustainability Tools we now have clarity on the extent of consultation and consent required. This is a significant step forward for hydropower companies, assessors and most importantly the local stakeholders, especially Indigenous Peoples.”

Greg Guldin from Cross-Cultural Consulting Services, who was engaged by the International Finance Corporation (IFC) to facilitate the FPIC process on Nepal’s UT-1 project, said: “The new FPIC agreement puts the hydropower sector on the frontlines of an emerging new partnership paradigm of engagement with Indigenous Peoples.

“Hydro projects can turn FPIC and Indigenous Peoples policies into veritable project bonuses by increasing the likelihood that local communities will feel engaged and ready to partner with projects over the long term.”

Further information:

The Hydropower Sustainability Assessment Council, which governs the Hydropower Sustainability Tools, includes representatives of social, community and environmental organisations, governments, commercial and development banks and the hydropower sector. The International Hydropower Association (IHA) acts as the council’s management entity and is responsible for overseeing training and accreditation.

The Hydropower Sustainability Tools define and measure sustainability in the hydropower sector. The amendments related to Indigenous Peoples have been made to the Hydropower Sustainability Assessment Protocol, which is used to assess projects against social, environmental and governance performance criteria, and the Hydropower Sustainability ESG Gap Analysis Tool, which identifies gaps against good practice.

Learn more: hydrosustainability.org

Related links:

 

7 May 2020

In Nepal, the Tamang Indigenous People gave their free, prior and informed consent to a new 216 megawatt run-of-river project.

The River Trishuli flows down the steep Himalayas and enters Nepal with such force and speed that it was named after the trident of Lord Shiva, the most powerful of Hindu gods. Legend has it he drove his trident into the ground to create the source of the sacred river.

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Tamang people consecrating FPIC agreements  - credit Gregory Guldin and NEFIN

 

The river’s immense hydropower potential has for long been recognised, but to date has remained untapped. This year the Nepal Water and Energy Development Company (NWEDC) however aims to begin construction on a 216 megawatt (MW) run-of-river project, the Upper Trishuli-1 (UT-1). 

Providing electricity for up to nine million people, the hydropower station is central to Nepal meeting its growing energy demands. The project was approved after successfully consulting with affected Indigenous Peoples and gaining their Free, Prior and Informed Consent (FPIC).

FPIC – ‘a give and take tool’

FPIC is a principle recognised in the UN Declaration on the Rights of Indigenous Peoples and is a condition of investment performance standards issued by the World Bank and International Finance Corporation (IFC).

adibasi_janajati_advisory_council_translates_to_indigenous_peoples_advisory_council_-_credit_gregory_guldin_and_nefin.jpg

Adibasi Janajati Advisory Council (translates to Indigenous Peoples Advisory Council) - credit Gregory Guldin and NEFIN

 

The US$453 million UT-1 project in Rasuwa district has implications for the area’s Indigenous Peoples, most of whom belong to the Tamang community. The project will affect almost 80 hectares of land.

One of the project’s lenders, IFC, employed Greg Guldin, an expert from Cross-Cultural Consulting Services to facilitate the process of achieving FPIC with the affected Indigenous People alongside Phurpa Tamang, an Indigenous People’s advocate and a project-affected person who was appointed by NWEDC.

According to Phurpa, the Tamang people have a deep connection to the Trishuli River and cannot be separated from it for religious, spiritual and cultural reasons. “When a project is in operation, our water, forest and land will be disrupted or lost,” he says. “But this can be mitigated through FPIC, a give-and-take tool for Indigenous Peoples by which we can make compromises with project developers and co-plan our future.”

Good faith negotiations

Under the community consultation process that was implemented, the Adibasi Janajati Advisory Council (AJAC) was created to support decision-making, consisting of 85 representatives from 10 villages.

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CEO receives consecrated [FPIC] Consent Statement - credit Gregory Guldin and NEFIN

“The FPIC process required by the international financial institutions was initially met with a lot of scepticism by critics, who feared failure and said written and signed consent was nearly impossible,” said Greg. “But it was achieved in six months.”

The FPIC process was accomplished through good faith negotiations between the Indigenous Peoples organisations, the company’s management, and the project’s lenders, Greg says. “The more engaged the Indigenous Peoples felt, the less likely there were to be misunderstandings and conflicts.”
NWEDC went on to receive the signed consent of the AJAC from its chairman, a former critic of the project, on 2 November 2018.

The UT-1 project will deliver a benefits package for local communities including new infrastructure, such as roads, schools and health services. The local Tamang will also be offered share options, allowing them to become equity shareholders in the project. 

“UT-1 was started 12 years ago, but there were no signs of success and few local Tamang supported it.” Phurpa added. “With FPIC, a new door has opened for both the project and the Tamang community to achieve a ‘win-win’.”

Read more about Indigenous Peoples and FPIC.

Sustainability assessment tools have been enhanced to better align with ESG requirements set by international financial institutions such as IFC and the World Bank. 

Use of the Hydropower Sustainability Tools will mean hydropower developers better understand how their project can achieve the performance standards required by major investment banks for all types of infrastructure projects.  

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The tools comprise the Hydropower Sustainability Assessment Protocol, which is used to assess projects against 26 social, environmental and governance performance areas, and the Hydropower Sustainability ESG Gap Analysis Tool, which identifies gaps against good practice and produces a gap management plan.  

Commissioning an independent assessment using these tools can help prepare project developers to meet lender requirements.

The tools offer a scoring framework specific to hydropower, and in some areas go beyond the requirements of international financial institutions by covering topics such as climate change and hydrological resource. 

“The tools can help high-performing projects demonstrate why they merit investment and ensure the best outcomes for the environment and local communities” said Eddie Rich, CEO of the International Hydropower Association (IHA). “At IHA, we encourage our members to sustainability test new projects and are pleased to offer training to strengthen institutional capacity on delivering good and best practice.” 

The changes include an update to assessment guidance on consultations with Indigenous Peoples, meaning projects will need to seek the Free, Prior and Informed Consent (FPIC) of affected Indigenous Peoples to achieve international good practice. This brings the assessment tools into line with IFC performance standards and the World Bank’s environmental and social standards. 

Other changes to the HESG relate to its structure and section titles. For example HESG section 4 is now titled Community Impacts and Infrastructure Safety, more closely relating the Word Bank’s ESS4 standard on Community Health and Safety. 

The tools are governed by the Hydropower Sustainability Assessment Council, whose members include representatives of organisations such as the World Bank, The Nature Conservancy, the International Union for Conservation of Nature, WWF, the Inter-American Development Corporation, hydropower companies and governments.   

The International Hydropower Association (IHA) acts as the council’s management secretariat and is responsible for overseeing training and assessor accreditation. 

To enquire about training or to identify an accredited assessor please contact sustainability@hydropower.org

Download the assessment tools: 
 
Hydropower Sustainability Assessment Protocol
 
Hydropower Sustainability ESG Gap Analysis Tool
 

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