Look me in the eye10 July 2018
How can the hydro industry tackle concerns and emotions around proposed hydropower and dam developments? And how can it communicate the holistic nature and positive aspects of sustainable projects to opponents? Prompted by an impassioned plea from an amateur photographer’s experience in Iceland, IWP&DC asked industry representatives to share their thoughts on this historically controversial topic.
Hydropower development vs nature at her best
“My life changed forever in 2013 when I came from the UK and set foot in Iceland for the first time. Fifteen visits later, my love affair for this fabulous country gets ever deeper,” says Phil Nuttridge, a passionate amateur landscape and nature photographer from Buckinghamshire.
Inspired by the “wild and open landscapes of this magical island of ice and fire”, Nuttridge travels off the beaten track and has been drawn back to the Westfjords region which “remains unspoiled by the tourism gold rush hitting the south of the island”. Speaking about his last visit to Iceland, Nuttridge recounted a 75-minute hike in this remote area which led to the discovery of the most beautiful and powerful waterfall, on a scale he had never witnessed before.
“I think its magnificence is almost amplified by its remoteness,” he said. “Standing on the edge of that waterfall was a truly exhilarating moment; its power hit me almost like a physical blow. That moment made me forget that there is anything else that matters. But these memories are tinged with sadness,” Nuttridge added, “as this waterfall has an uncertain future.”
Describing investors as “salivating at the megawatts of power and the billions of króna that this water can generate through a planned hydroelectric scheme”, Nuttridge questioned whether hydropower is green energy.
“It is energy that will drain the falls of every last drop of water. The roar beneath my feet would fall eternally silent. Yes,” he says fervently, “they promise new roads bringing more tourists, and with them their hard currency which will help bankroll local businesses in post-crash Iceland. Yet is this not destroying the very thing that brings tourists here in the first place? Icelandic nature is the Icelandic USP; drain it and destroy it, and what is left?
“I would challenge those planning to build the hydroelectric station to walk with me, stand on the edge of that waterfall, absorb its power, and then look me in the eye and tell me they have the right to destroy it.”
Bridge the communication gap
Joao Costa, Sustainability Specialist, International Hydropower Association
Hydropower projects, as with any engineering infrastructure, provide an interface between society and environment. They protect humans from natural risks, such as droughts or floods. They also allow us to benefit from what nature offers – a renewable source of energy that can drive socio-economic development. Such projects inevitably influence the environment, either by affecting or improving existing conditions.
In other words, hydropower development results in both impacts and benefits, and these may not always be easy to grasp. In the face of incomplete information, we may have emotional reactions and raise unfounded concerns. The challenge for the hydropower sector is, in this case, to inform and communicate a project’s reality – and so allay fears.
A common language
Against this backdrop, the Hydropower Sustainability Assessment Protocol is a critical tool to help waterpower professionals bridge the communications gap with civil society.
The Protocol was developed over three years by social and environmental NGOs, governments, financial institutions and representatives from the hydropower sector, who worked together to agree on the topics that define sustainable hydropower. These multiple perspectives were decisive in making sure that the tool is globally accepted. In fact, a multi-stakeholder committee still governs the Protocol today, assuring that diverse viewpoints are included in every decision, guaranteeing its credibility.
The Protocol offers a means to assess the performance of a hydropower project against international good practice. In official assessments, an independent accredited professional uses the tool to understand if a project meets agreed sustainability principles. To do so, she or he inspects the site, interviews stakeholders and verifies documentation.
The assessment result is objective and transparent, thus providing a common language. Waterpower professionals can now communicate openly with civil society, governments and financial institutions.
Since 2011, the Protocol has been used in 29 official assessments in all five continents. Over time, a wider range of Protocol applications, including capacity building and self-assessment, have become available not only to developers and to operators, but to governments, financial institutions and donor organisations.
Expansion of the Protocol
The Protocol has now been expanded with a dedicated assessment topic on climate change. With a focus on climate mitigation and resilience, its criteria are supported by cutting-edge science around reservoir greenhouse gas emissions, using the G-res Tool, and the latest understanding of resilience and adaptation in hydropower.
Building on this foundation, the International Hydropower Association (IHA), with the support of the Protocol’s governance council, is now launching a new tool to support project gap identification and analysis: the new Hydropower Sustainability ESG Gap Analysis Tool.
A new tool for gap analysis
With a focus on environmental, social and governance aspects, the new ‘ESG Tool’ offers the opportunity for accredited assessors to carry out expedited, targeted assessments, while upholding the same standards of quality and transparency. The tool has a new feature in the gap management plan: where the Protocol identifies gaps against sustainability good practice, the tool goes a step further: it delivers an action plan that helps project teams to bridge those gaps within a reasonable timeframe.
The tool was approved by the Protocol’s multi-stakeholder committee, but it is not a Protocol replacement. On the contrary, its purpose is to broaden the range of Protocol uses, especially for smaller, lower-budget projects.
An important driver for the tool’s development was the clear demand from international investors who have requested a simplified screening mechanism to understand whether a hydropower project is eligible for green financing, such as climate bonds. The tool is therefore an important asset for boosting the confidence of both local communities and potential investors.
With the Hydropower Sustainability Assessment Protocol and the Hydropower Sustainability ESG Gap Analysis Tool, developers, owners and operators now have two powerful means of building a clear and objective picture of their project. This has huge benefits in terms of better informing and communicating with stakeholders, especially concerned communities, who rightly need to be persuaded of a project’s merits.
Managing social risks
Anton-Louis Olivier, Managing Director of Renewable Energy Holdings, a South Africa based developer, owner and operator of hydropower plants.
I have been developing, small and run-of-river hydropower projects in Southern Africa since 2003. During this period, I have probably assessed more than 150 individual sites. Of all these possibilities we have successfully developed, constructed and now operate three projects. This attrition rate comes at a high cost, a cost any developer would like to reduce. Whereas technical or commercial risks are relatively easy to identify and quantify, this is not the case with socially motivated vested interests or opposition to a development.
One of the most important skills required from a developer is to identify early on in a project’s development cycle any killer assumptions, that if proved incorrect could sink a project. Determining early on in the development process if a project will face opposition motivated by social or conservation concerns is, not only very difficult, but is very often impossible.
Even if a country wishes to promote hydropower as part of its energy mix it does not mean that all will go smoothly and all licences and approvals will fall into place. Trying to develop hydro in a country where there is no support from government is simply a waste of development funds and effort.
Internationally, a considerable amount of effort has gone into developing sets of guidelines and procedures to manage such social and environmental risks. Any developer who needs to raise capital from commercial lenders or development finance institutions (DFIs) will be familiar with the International Finance Corporation (IFC) Performance Standards and the Equator Principles. The International Hydro Power Association has developed a hydropower specific Sustainability Protocol to help address these issues.
These guidelines and development checklists serve a number purposes: firstly as a framework for the developer and secondly as a screening tool for financiers and other parties to assess the completeness of the development process. In addition, the involvement of conservation minded groups like The Nature Conservancy and International Rivers in developing the Sustainability Protocol, has matured and advanced the debate about when and under what conditions is hydropower acceptable and a preferable power generation technology.
In my personal experience, in developing small (less than 20MW in capacity) and run-of-river hydropower, it is relatively easy to avoid such obvious complications such as diverting flow away from a known waterfall or tourist site, the displacement of indigenous people or developing a project in a world heritage site. Avoiding the conflicts that result from local, project level expectations of rent or benefits, is far more difficult.
Many of the new hydropower sites being developed in Southern Africa are located in rural areas, where subsistence farming is the main economic activity. There is seldom outright opposition to a project in such a location. The benefits of infrastructure development, more stable power supply and increased employment is usually evident to all and welcomed. However, any new project, hydro or otherwise, brings with it the promise of jobs and compensation for land access and upsets the political and social structure in the project area. There will be haves and have-nots, those who gain compensation or employment and those who do not. Those who feel that they may lose out, will always have the incentive to try and be included and may resort to lobbying, media campaigns or in extreme cases to violence to achieve this. Managing these expectations is one of the most difficult tasks facing a developer. This is a process that starts from the first site reconnaissance and will continue well into the operational phase. Employing and training community liaison officers and implementing a communications strategy targeting all stakeholders is one way of managing this. But even the best-implemented plans may be wrecked by local ambitions.
In one case, we encountered opposition from local recreational and commercial water paddlers who started using a stretch of rapids on the proposed project site for water sports. It took two years for the parties to agree on an appropriate compensation plan and for the matter to be resolved. Not all projects or developers can sustain such a delay during development and still be able to proceed.
One of the principles of project finance is to identify and allocate risks as efficiently as possible. The developers and sponsors are never able to fully isolate a project from social risks, and therefore the management of these risks remain for their own account. The reward for managing these, and other risks, is the developer’s fee on financial close and the return on equity for the owners. Belief that they can manage these risks and achieve a positive outcome is what makes a developer.
Wining hearts and minds
Ian Cooper, Project Director, Black & Veatch
Oman's Wadi Dayqah water supply scheme offers insights into how a large-scale dam project can gain public support, even when centuries-old irrigation practices are affected.
The Sultanate of Oman has few permanent surface water resources. Wadi Dayqah is unique in that there is flow throughout the year. The wadi has for centuries been the source of irrigation from a system of aflaj, open irrigation canals fed from a diversion structure across the wadi. Aflaj are an important heritage illustrating the determination of Omanis to build a civilisation in a harsh environment. Some aflaj date back more than two thousand years.
Wadi Dayqah Dam is the Sultanate’s tallest. The project comprises a roller compacted concrete main dam, rockfill saddle dam, water treatment works, pumping station and water transfer pipelines to supply local towns and to supplement the supply to the capital, Muscat.
Through form and function the Omani government has sought to help the public embrace the project. From inception it was made explicit that the ancient aflaj system would be fed from the new reservoir and assured of a continuing supply.
In such an arid region, the potential of a sizeable man-made body of water to attract visitors was recognised and used as an asset. The design made provision for the dams to function as a tourist attraction, by providing parking, shaded outdoor eating areas, toilets, and a coffee shop. The visitors' centre, spread over 1,281 m2, affords a birds-eye view of the whole site. The dam was promoted from the outset as a public amenity, with its own page on the Sultanate of Oman’s official tourist website.
To further popularise the project the dams are used as a focal point for public events. They provide the backdrop for a stage of the Tour of Oman cycle race. To communicate the value of water in a desert state, Oman’s government has used the Wadi Dayqah project as the centre piece of high-profile events to mark United Nations World Water Day. The opening ceremony was led by H H Sayyid Fatik bin Fahar al Said, secretary general at the Ministry of Heritage and Culture, with a significant media presence in attendance.
Mother Nature has also lent a hand. Run off from Cyclone Phet led the reservoir to rise from 158masl to a peak of 177.75masl in approximately six hours. Even for engineers accustomed to seeing spillways in operation, the sight of the spillway at the peak of the flood left a lasting impression. In the days following Phet the spectacle caught the public attention. Under the headline "When Wadi Dayqah roared," the Oman Daily Observer reported, "[the dam was] transformed into a breathtakingly striking waterfall attraction, the likes of which Oman has never witnessed before.”
Visitors flocked to the attraction, and still they come. International travel website Trip Advisor ranks Wadi Dayqah seventh on a list of 111 things to do in Muscat Governate. This 'tourist attraction' also makes 35Mm3 of water available annually, for the irrigation of agricultural land and to augment water supplies to the cities of Muscat and Quriyat. Thus the Wadi Dayqah project shows that with foresight, imagination – and committed political and financial backing – critical infrastructure projects can also win hearts and minds.
Strategic siting is paramount
Kate Lazarus, Environmental and Social Hydropower Advisory Team Lead, International Finance Corporation
Before any hydropower project breaks ground, companies and officials should consider the irreversible footprint the dam will have on the riverine environment and communities where the project is situated. Within this context, strategic siting of the dam should be trasparamount in hydropower planning. The decision to situate a dam on a mainstem river could be modified to a targeted location in an area (e.g. a tributary) that may already be altered, where for example a cascade of hydropower dams pre-exists, and the impacts would be incremental then in pristine environments. By considering the siting of dam with environmental and social values well-thought-out upfront, our rivers’ environmental and social significance can be better preserved.
To ensure hydropower dams are sited appropriately, officials and investors need information. Often the focus at the early stage is on the technical feasibility of projects, and does not consider environmental and social data. Later in project development, this becomes a problem when a developer enters an area with limited information and when projects are already designed. Whereas most countries require an Environmental and Social Impact Assessment (ESIA), which is an important task in the project development cycle, including environmental and social information early on, even at the pre-feasibility stage, is not regularly practised. This results in lack of interest by companies to change project designs as they feel it is too costly. Had they considered E&S early on, they could have ensured that their project took these risks into consideration upfront, reducing later costs and burdens.
Country-wide strategic environmental assessments are one place to begin to improve decision makers’, investors’, hydropower developers’ and other stakeholders’ knowledge. A strategic environmental assessment gives an overview of environmental and social risks in a river basin. The study can help investors and decision makers evaluate where would be the best location for the proposed hydropower plant, avoiding areas with a unique environment or critical biodiversity, significance cultural value, or areas that are experiencing conflict. By thinking through project location carefully, officials and investors may avoid confrontations with opponents that stall projects, and will improve the sustainability of the project’s operations.
We need to change the way we approach hydropower development. We should start thinking beyond one hydropower project and approach risk mitigation and management cumulatively at a larger scale. Governments and companies should think from a cumulative, or landscape perspective and take into consideration all development planned for one river basin. Stronger guidelines or regulations on cumulative impact assessments would help the sector tremendously but it is in the way in which they are implemented which is crucial for success.
Hydropower developers need practical tools to help guide their work. IFC has several, including:
- Good Practice Handbook on Cumulative Impact Assessments: this six-step process assists companies in emerging markets to identify their contribution to cumulative impacts and guide them in the effective design and implementation of measures to manage such cumulative impacts. The GPH is available in numerous languages.
- Good Practice Handbook on Environmental Flows for Hydropower Projects: provides guidance to practitioners on selecting an appropriate environmental flows assessment level for hydropower project development.
- Good Practice Note on Environmental Health, and Safety Approaches for Hydropower Projects: a technical reference document that has been developed for IFC clients and other private sector companies and their consultants intended to be used in conjunction with IFC’s Performance Standards and gender EHS guidelines to identify, avoid, mitigate, and manage EHS risks and impacts in hydropower projects
Whereas hydropower projects impact the environment where they are situated, project developers can put in place a number of measures for affected communities. For example, by adhering to good international and industry practices, companies can invest in ecosystem services such as setting up fish hatcheries, protecting a spiritual or cultural site, ensuring downstream crops have access to water, or improving the quality of water in a river that may have been previously heavily polluted.
Hydropower companies and government can also ensure that benefits from hydropower projects are shared among affected communities. There are only a few countries that have benefit sharing policies and practices in place and more understanding and implementation is required. This can include fiscal mechanisms such as sharing part of the revenue generated by the operation of the hydropower project with local communities by:
- (i) Direct payments
- (ii) preferential electricity rates and free electricity;
- (iii) payments to establish a community development fund,
- (iv) Equity investments/sharing - where communities receive an equity share in the project.
Non-monetary benefits can include:
- employment and training to local people;
- preferred procurement of local good and services;
- community development and environmental enhances such as skills training, alternative livelihoods, education, health and watershed protections;
- project infrastructure and electrification such as improved roads and bridges, public services and electrification.
Hydropower development, as with any major infrastructure development, is a trade-off. With over one billion people without access to electricity, the need to generate power is clear. Likewise, it is important that we move away from energy generated from coal and explore more renewable options that, with good international and industry practices in place in combination with new technologies, can lower environmental and social risks.
Reconciling human needs and environmental concerns
Dr Karl Kolmsee, CEO Smart Hydro Power Ltd.
The South American Amazon is sometimes called the green lung of the planet. Whoever has been there admires the giant trees, the natural rivers and water falls, and the rich variety of species populating the forest. All, minus some hard-hearted timber merchants, do agree that this unique area should be protected against destructive exploitation.
But the Amazon is also homeland for approximately 30M people. Some of these are from indigenous groups following a traditional way of life in accordance with their natural habitat. But the vast majority tries to live in such an extreme natural environment. They desire air condition, potable water, light and internet. They desire electricity to improve their lives and not be left behind economically and socially by their compatriots in Sao Paulo, Lima or Bogota.
As the construction of a power plant and distribution lines jeopardises the environmental equilibrium, there is an obvious conflict between environmental integrity and human dignity. While this conflict cannot be overcome it can be softened by choosing alternative infrastructure. The traditional infrastructure is a central large power plant with an elaborated grid structure leading to the last household to supply electricity. Central power plants and ramified grids are well established and cost-efficient technologies. Bringing generation closer to the demand – so called distributed generation – is an alternative which has recently become more popular, advanced and cost competitive.
Pico and micro hydropower plants with installed capacities have been for years a solution for remote houses and villages far away from the central grid. Using standardised components and new materials like composites from glass fibre and HD polyethylene, helps reduce costs for turbine and installation in a way that even small plants with 5 to 50kW capacity and plants with low head are technically and economically feasible. Kinetic hydropower plants which do not require any infrastructure but float in rivers complement the existing product portfolio.
While large hydropower plants are designed to take the water capacity available, micro hydropower often works with a fraction of an existing water stream and the natural topography. This makes micro hydropower plant generally more environmentally and fish friendly. As all hydropower plants these products offer baseload generation without the need to rely on photovoltaic (PV) and batteries which under the conditions of the rain forest are a highly volatile generation source.
In practice, complementary generation sources like PV-hydro offer the most reliable and cost-effective system. Modern micro grid design offers a reliable and stable distribution even with limited generation capacity installed and extremes peaks in the demand profile. An elaborated load management replaces the necessary over-capacities known from traditional grid operations.
This does not mean that micro hydropower does not impact the natural habitat. The conflict between environmental concerns and human needs cannot be easily resolved. But it can be softened by a different approach designing smaller distributed systems close to the demand.
Hydropower as traditional renewable energy has not lost its merits. Even in the world’s green lung small hydropower plants allow local villagers to benefit from electricity for their social and economic development – with the least environmental impact possible.