Posted on 31 October 2023

Recommendations for sustainable development of renewable energy emphasize the importance of planning and implementing this development at the system scale (i.e., at the scale of the power grid). Through system-scale planning, projects can be identified that work together to achieve a power system that is “LowCx3” (low carbon, low cost and low conflict).

Yet the development of infrastructure, including hydropower, has long focused on individual projects. Where system-scale planning is lacking, incomplete or outdated, it is difficult to select the right projects - the ones that are most compatible with LowCx3 systems.

This paper - A bridge to sustainability: A project-based approach to achieving system-scale results - focuses on how to shift the typical project- by-project decisions about hydropower development toward ensuring that projects strategically “fit” within their surrounding context of energy, water resources, and land systems. That could mean, for example, projects that enable other renewables, that contribute to better management of water resources in a basin, and that do not negatively impact communities, protected areas or other key resources.

Specifically, we explore how application of the Hydropower Sustainability Standard (“the Standard”) could filter projects for their strategic fit, and thus adapt a largely project-scale mechanism into one that can achieve many of the goals associated with system- scale planning, contributing to the development of LowCx3 power systems.

These ideas are not meant to substitute for system- scale approaches, which remain the gold standard for achieving sustainable power systems (reviewed in Appendix 1 of this paper). Governments, power utilities and other stakeholders should still apply system-scale approaches to inform decisions, such as Integrated Resource Plans or Strategic Environmental Assessments. In fact, the outputs of these processes are extremely valuable inputs to the application of the Standard at the project level.

This application of the Standard as a bridge to system planning is intended to solve a specific challenge: in much of the world where hydropower development is occurring, the foundations for system planning—both in terms of information and governance—are lacking. Further, although hydropower can have large negative impacts, there are places where new hydropower dams will be built over the next few decades, and have to be selected from a very large pool of potential projects (e.g. in Nepal). Potential projects range widely in terms of their social and environmental performance, and some have a much better ‘fit’ with a LowCx3 system and are much more in the public interest than others.

In short: if the projects with the best fit could be prioritized, a LowCx3 system could emerge. However, in the absence of system planning information or governance, projects will continue to be selected somewhat randomly, preventing fulfillment of a LowCx3 power system.

Though implemented at the project scale, the Hydropower Sustainability Standard has the potential to achieve some or many of the desired benefits of system-scale planning. The Standard already contains a number of requirements focused on this strategic fit and that require a system-scale perspective. If applied rigorously, these criteria will make the Standard a useful tool for evaluating the strategic fit of projects.

Where the information foundation for system planning exists, the Standard can draw on these resources to assess a project’s strategic fit. The information foundation to support a LowCx3 power system should include a set of ambitious national strategic objectives and operational plans to achieve them. These plans should be consistent with a government’s national and international commitments, such as the Sustainable Development Goals, commitments on biodiversity and protected areas, and climate mitigation commitments (e.g., Nationally Determined Contributions).

At a minimum, such plans will have to provide pathways to:

• Universal access to affordable power;
• Net zero carbon emissions from the energy system, including replacing carbon-intensive technologies in heating, cooling, transport, and industrial applications with clean power;
• Healthy rivers that provide multiple social, environmental and economic benefits, through integrated water resources management that allocates river reaches and water volumes to sustain multiple uses and diverse values. Understanding implications of climate change is particularly important for planning of sustainable water management (including how shifting hydrology would affect future hydropower generation).
• Healthy landscapes that provide multiple social, environmental, and economic benefits, through spatial planning and appropriate land uses.

To be considered sustainable, a hydropower project should be able to demonstrate strategic fit with the operational plans above.

If the governance mechanisms for system planning do not exist (e.g., a planning process that guides project selection and licensing), then application of the Standard can act as the filter to inform decision makers about the strategic fit of a project. Where both information and governance for system planning are in place, projects will find it much easier to be certified as sustainable.

Where a foundation for system planning does not yet exist, the Standard could incentivize projects to demonstrate their strategic fit and push demand for improved planning. This outcome is only possible if application of the Standard drives developers to pursue additional sources of information and analyses to demonstrate a project’s strategic fit. In turn, developers will only take these steps if certification through the Standard is linked to project success in some way – e.g. by reducing risks related to permitting, access to finance and public acceptance.
Improved guidance, revision and expansion of the Standard, including but not necessarily limited to development of an Early Stage Tool, may be needed. The paper offers several recommendations for this, including establishing a working group of members of the Hydropower Sustainability Alliance, involving representatives of governments, developers, financiers and NGO, to explore these recommendations and options.

System-scale approaches remain key to achieving power systems that are LowCx3 and securing a sustainable energy transition. Yet system planning remains relatively uncommon and energy development is proceeding rapidly one project at a time. Thus, the pursuit of sustainable power systems needs to also find entry points at the project level. The potential of the Hydropower Sustainability Standard to achieve some of the benefits from system-scale planning, and to serve as a bridge to system planning, should be explored.