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17 June 2020

REN21’s Renewables 2020 Global Status Report (GSR) highlights the impressive growth in renewables over the past five years but points out that governments need to take further action now to ensure a clean energy future.

REN21’s annual report, to which IHA contributes data and analysis on the hydropower sector, is a comprehensive overview of the state of renewable energy. More than 200 GW of new renewable power generating capacity was installed in 2019, the largest increase ever, raising the total globally to 2,588 GW. Of this, hydropower capacity is 1,308 GW.

Renewables accounted for 75 per cent of the global power generating capacity additions. Solar PV appears at the top of the list with 57 per cent, followed by wind (30 per cent) and hydropower (8 per cent). The rapid growth in the installed capacity and penetration of variable renewable electricity (VRE) sources highlights the need for hydropower’s storage and flexibility services. 

Pumped Storage Hydropower (PSH) is the most developed energy storage technology in the world. According to the report, the global energy storage market reached 183 GW in 2019, with PSH accounting for 158 GW.

Hybrid systems have a prominent role in providing grid flexibility while decreasing costs and delivering technical benefits. The report presents examples of new hybrid projects of hydropower/solar in Brazil, the Philippines, Russia, and Uganda.

Despite the high growth of renewables in the power sector, REN21 cautions that this should be balanced against the continued growth in global energy demand and the low percentage of renewables in the heating, cooling and transport sectors. 

Covid-19 economic stimulus recovery packages provide a unique opportunity to make a systemic shift to a low-carbon economy, but only if governments prioritise “green” recovery measures. 

Such measures can deliver job creation and energy security, as well as reduced emissions and air pollution.

“It is clear, renewable power has become mainstream and that is great to see. But the progress in this one sector should not lead us to believe that renewables are guaranteed success. Governments need to take action beyond economic recovery packages. They also need to create the rules and the environment to switch to an efficient and renewables-based energy system. Globally. Now.” concludes Arthouros Zervos, President of REN21.

Eddie Rich, IHA’s CEO, says that there has never been a better time to reassess the global energy system: “It is vitally important that economic stimulus packages not only maximise the short-term benefits of infrastructure investment, but also accelerate the transition towards cleaner and lower-carbon technologies such as hydropower.”

Read more about IHA’s work to influence a green economic recovery

16 June 2020

Economic stimulus packages involving investment in sustainable hydropower among other renewables will be essential to Covid-19 recovery efforts.

This was the consensus view of senior hydropower industry CEOs and the head of the International Energy Agency (IEA) and International Hydropower Association (IHA).

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At a meeting convened by the IHA on 12 June 2020, eleven top energy executives discussed with Dr Fatih Birol, the IEA’s Executive Director, how hydropower can contribute to global recovery efforts.

Ahead of a special IEA World Energy Outlook report on sustainable recovery, Dr Birol emphasised the importance of hydropower to a modern, clean and secure energy future. The impact of Covid-19 on today’s energy sector is unprecedented and has highlighted the important role hydropower plays in providing electricity security and system flexibility, said Dr. Birol. 

“The voice of hydropower is not heard loudly enough in the energy and climate debate. It already represents 16 per cent of global electricity demand and 65 per cent of renewables-based electricity with significant potential to grow, including through modernisation or refurbishment of existing hydropower.” 

 

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Eddie Rich, IHA’s CEO, and the eleven CEOs and top executives from IHA’s membership, presented a united message on the need for sustainable hydropower as part of the energy mix for a green recovery. “Even more than other renewables, government policies and actions drive investment in the hydropower sector. A ‘green stimulus’ for low carbon technologies and hydropower infrastructure should be a key pillar of government-led recovery packages” he said.

Despite the worldwide need for hydropower’s flexibility and grid management services to support variable renewables, investment is stagnating. Improved market design to compensate for these services are necessary to incentivise investment in plants with storage, such as pumped hydropower. 

Yves Marie Giraud, Director of EDF-Hydro, France, said hydropower was the best way and the only way to store energy in large quantities and over long periods, but markets should be designed better to reflect this.

“Usually, we do not have the appropriate market design nor the mechanisms to support storage in general, and pumped storage plants in particular.”

This view was echoed by Stephen Davy, CEO of Hydro Tasmania, Australia, who said: “Pumped hydropower investment is the easiest and most straightforward way to maximise solar and wind generation in the energy system. In Australia we are promoting the market measures required to properly value storage and flexibility.”

In developing countries where the fiscal response to the Covid-19 crisis is limited, multilateral development banks will be critical in financing or refinancing viable projects. 

Anton-Louis Olivier, CEO of REH Group, based in South Africa, said: “With the growing emphasis and prevalence of solar and lower cost but intermittent resources, we should not neglect the need for hydro to create the base on which these lower cost technologies can also enter into the market.

“My message to the IEA in dealing with the international financial sector and multilaterals guiding the future of the energy sector in Africa is to remember that hydro, large and small, can still play a significant role in the continent, and can contribute to a growing and decarbonised power sector.” 

Dr Birol acknowledged the points made by the industry speakers, including about the importance of storage, modernising plants, and keeping long-term policy support; as well as the multiple non-energy benefits of hydropower, such as flood and drought control, irrigation and climate resilience.

As well as feeding into this week’s IEA World Energy Outlook special report, the discussion will be considered for the IEA’s Clean Energy Transitions Summit on 9 July 2020. Dr Birol pledged to take the feedback from the meeting to the government ministers and policymakers attending the Summit.

Roger Gill, IHA President, said the meeting was very timely for the hydropower sector to outline the measures needed to spur sustainable hydropower and support the recovery, particularly relating to incentivising storage and modernisation projects.

“Sustainability must be at the heart of our response to the crisis,” said Mr Gill.  “Over the coming weeks and months IHA will continue to offer our assistance to the industry and press home our message on the role of sustainable hydropower development to support the recovery, boost jobs and to help build low-carbon, resilient economies.”

Other contributions to the meeting included:

“Increased hydropower investment will support the economic revival in China. It is expected that we will start construction of a project involving investment of around USD20bn in the second half of this year. In other parts of the world there is a need for increased investment in hydropower to recover from the crisis.” WU Shiyong, General Manager, Yalong River Hydropower Development Company, China

“I believe that in the recovery from Covid-19 we should be sure to do it in a sustainable way and thinking not just of electricity but also of water. These two needs are very important in the world right now.” Irene Cañas, CEO, Instituto Costarricense de Electricidad, Costa Rica

“We hope the IHA and IEA can support hydropower sustainable development and help in setting up national energy policies so that we have tax incentives, green bonds, and fast-track approval by the authorities; and also potentially look at internationalising the renewable energy certificate initiative.” James Ung Sing Kwong, CEO, SEB Power, Malaysia

“A good measure done by the Brazilian govt was the declaration of suspension of financing and debt service payments for projects being done by the federal bank for up to six months. This could be followed by other countries.

“Brazil is not building any hydropower at this time. Getting even basic engineering design and environmental studies required for the licensing takes between two to three years. We should urgently resume the preparation of projects.” Gil Maranhao Neto, Chief Strategy, Communications & CSR Officer, ENGIE Brasil, Brazil

“One of the main concerns is the low cost of electricity around the world, it will be very difficult to finance hydropower projects. We see that sustainable hydropower projects are competing with wind and solar for example with green subsidies. It’s important to find ways to get the right long-term market conditions to support hydropower development.” Hörður Arnarson, CEO, Landsvirkjun, Iceland

“This technology of hydro has proven you can run it during a pandemic situation so if you look through the lens of future modernisation, how do we pandemic-proof our hydro plants? How do you minimise the impacts?” Herbie Johnson, General Manager, Southern Company, US

“It is important to focus on maintaining the existing capacity of the hydropower fleet through refurbishment activities. We would also like the IEA to support a long-term framework for the future.” Hilde Bakken, Executive Vice President, Statkraft, Norway

A recording of the meeting can be viewed here

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 2019 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

 

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Join the conversation

On social media use the hashtag #hydropower2020

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

 

Visit IHA's Covid-19 communications centre: hydropower.org/covid-19

Watch our video on Twitter and LinkedIn

 

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.

Watch our video on Twitter and LinkedIn

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).

 

hydropower.org/covid-19

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:

 

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