The Covid-19 pandemic will reset our society and economy in ways we cannot yet imagine. When we recover from this crisis – and we will recover – we can expect to see significant new approaches to global governance, economic development, environmental and social sustainability and energy systems. There will be a rethink about our critical infrastructure and interconnections between countries. 

The words above are from a blog written by Eddie Rich, CEO of the International Hydropower Association (IHA), and they perfectly sum up the mood in the industry at the moment.  There have been clear impacts on the hydropower industry over the past few weeks he said, such as supply chains being hampered and projects delayed or being declared uncompetitive. But still, the industry goes on – ensuring the lights are kept on in many countries to provide essential health and other services. 


Rich was the main presenter in the Webinar “Hydropower Market Update by IHA", hosted by Norwegian Energy Partners (Norwep). Other speakers were: Tron Engebrethsen, SVP International Hydro, Statkraft; Eliseo Ana Jr, EVP Africa and Latin America, SN Power; Fred Kanton, Project Director, Tinfos; and Tor Berntsen, Chair of the Board, Malthe Winje.

During his presentation, Rich said that the situation for hydropower is varied for different countries. He believes we are seeing more certain pictures emerging from China, who are starting to think about the post COVID-19 environment. Its unsurprisingly a mixed picture. There has been a big ramp up in coal fired power stations, but there has also been a reintroduction of hydropower development, particularly pumped storage, into its five year development plan. 

At the same time, however, in places like Brazil the demand has gone down so much there has been a cancellation of a new round of energy auctions. But this is likely to be a short term issue.

One of the most interesting developments, he said, however, is what has recently occurred in India – perhaps the largest electricity experiment the world has ever seen. Prime Minister Narendra Modi called for Indians to switch off their lights for nine minutes at 9pm on 5 April, to express solidarity amid the Covid-19 pandemic

While the Prime Minister’s aim was to unite citizens during a time of crisis, the move presented a huge challenge for power operators, who are charged with managing grid stability.

India’s Power System Operation Corporation (POSOCO) had anticipated a much smaller reduction of 12,000 to 14,000MW in the nine-minute period than the 31, 089MW which ultimately took place.  

Following Modi’s announcement, the state-owned company reportedly held a conference call with all state load despatch centres and major hydropower stations on 4 April, and began mock exercises on hydro ramping almost immediately.

As the country reached closer to the lights-off vigil, hydropower generation was maximised. When people began switching lights off between 8.45pm and 9.10pm, hydropower generation was then quickly reduced from 25,559 MW down to 8,016 MW to match the demand reduction.

Thanks to hydropower’s unique flexibility, the stations were then able to ramp up within seconds to meet the increased demand, as Indian households began switching their lights back on.

“I think that is quite an interesting lesson that hydropower is able to meet this kind of demand, and these are the kind of stories we need to get out there,” Rich said. “We’ve never really seen that kind of large-scale testing of hydro capacity.” 

Rich said the picture he was trying to paint is that COVID-19, one way or another, is presenting the world with a statement that hydropower is an essential service. The people who are working in those power stations are often as essential as nurses and health care workers. 

Post COVID-19 energy sector

Rich said it was too early to say what a post COVID-19 world would look like in terms of the energy sector – particularly with the recent oil price crash. He did say that however that there undoubtedly be a transformation of the energy sector. 

“What we are likely to see as part of the recovery is massive stimulus packages,” he said. “We are likely to see an opportunity that we have never seen before for hydropower to position itself. I think having the voice of hydropower at the table when governments are making these decisions about how they are going to stimulate the economy is more important than ever.

“This year is going to lay the foundations to how we set out the decades ahead,” he commented.  “When there have been oil crisis or financial crisis previously, the return to fossil fuels has happened very quickly. We can’t let that happen this time if the targets set in Paris are going to be met. This is an important time to advocate for renewable energy.”

The IHA have been trying to position three key messages going forward. Firstly for the industry to have shovel ready plans in place for the post-Covid 19 economic stimulus plans. Secondly, Rich said he believes the industry is going to come under unprecedented scrutiny for its environmental and social and governance criteria. Making sure your projects have been assessed against the Hydropower Sustainability Tools from the IHA would be a good way to demonstrate their sustainability.

 Thirdly, this is a good opportunity to demonstrate how hydropower, solar and wind can work together. It’s time to demonstrate coordination through hybrid projects such as solar PV or pumped storage alongside solar or wind power. Together these would demonstrate to the world that hydropower is future proof and can be relevant in the changing economic and climate environment.

Rich finished his presentation by stating that the IHA’s role is advancing sustainable hydropower. He said the organisation is going to work globally to improve hydropower’s image.

”We hope we can create enabling environments for hydropower, so we are going to work with governments on policy and regulation,” he said.  “We also have to make sure the markets value hydropower fairly.  The many benefits of hydropower need to be taken into account beyond just electricity generation – in terms of things like flood control, irrigation, clean water and so on. We need to empahsize these projects are long term. And of course we need to emphasises hydropower’s role in supporting other renewables through storage and flexibility.”

At the end of his presentation, Rich was asked the questions on how long he thinks the industry will take to recover from the COVID-19 situation. He pointed out that while he wouldn’t know the answer to that given the uncertainty, would he would say is that hydropower is probably in a better position than the other energy sectors to recover. 

“The case in India recently for example shows what it means in terms of flexibility. Where we have seen lots of cases of the other viariable renewables being shut down we see hydropower going on. We see oil and gas prices going down and being very volatile. We see potential lobbying about coal prices. We see a lot more discussion than ever before about whether oil and gas subsidies, and fossil fuel subsidies in general, should be removed. All of that is happening in those other energy sectors.

“Hydropower has been able to stand up in this period and say that we’re your reliable ones. We have all these technological advances taking place that we can now demonstrate. We fit so well to get the most out of those other renewable energy sources. We are better placed if we get the messaging right, but this will not happen by itself. People need to take their place at the table.”

Views from firms operating internationally

The webinar offered the opportunity to hear from Norwegian firms who are operating internationally. First up was Tron Engebrethsen, SVP of International Hydro at Statkraft, Engebrethsen said that their current operating hydropower plants are continuing to operate, and even though there are strict restrictions in many countries, it is still possible to run these plants. Many governments are granting exceptions for hydropower workers to be transported around, even though that is not commonly allowed. He said that if this situation goes on for a significant amount of time there may be problems with maintenance, but Statkraft has seen no immediate problems with operating.

The company has however had to temporarily stop construction work on two projects – the 100MW Tidong hydropower project in India and the 52MW Los Lagos hydropower project in Chile. Construction work on another project it is building – 184MW Moglice hydropower project in Albania – is however continuing.

Work was temporarily suspended on the Tidong project in India

At the Tidong project, all Statkraft staff and contractors’ personnel were informed and a hibernation plan was put in motion by the project team on Saturday 21 March.   Civil works at the Los Lagos site were also paused, and a hibernation plan executed. While both projects are on hold, adequate emergency and security staff remain on site.

In Albania, the Moglice project has been able to continue as it is moving towards its final stage. The company has been able to commission the first unit at the plant with the second unit planned to be commissioned by end of April. Civil works are expected to go on for a few months.

Engebrethsen said that what the company has planned now is a six month stop on the Tidong and Los Lagos plants, which is expected to cost about US$4 million.

With regards to the projects the company is planning, there are a number of problems, including restrictions on the supply chain, as there is no way of knowing when this will be up and running again. And of course, he said, even in the early stages of a project you need to have people travelling in and out of countries and that is very difficult now.

Eliseo Ana Jr, EVP of Africa and Latin America at SN Power, said that the company has been monitoring the situation since its development in China. The company has its largest operations in Asia, specifically the Philippines, it also has operations in Sub-Sahara Africa and one in central America. In terms of preparedness, the company was able to learn from what its Philippines operations was doing regarding safeguarding. The company implemented several steps in terms of securing the sites, and making sure it was able to operate its plants from the onset.

At this point, barring any difficulties in hydrology, all the company’s plants are operating, said Eliseo Ana Jr.

In terms of demand, he said the company said they had seen a significant decrease in countries where they operate. He also pointed out that the lowering of oil prices were affecting spot market prices, in some countries equating to a drop of 20-40%.

Eliseo Ana Jr explained that the company’s portfolio in power is a combination of revenue generated from the spot market but it is also covered with long term PPAs, so are buffered a little in terms of the immediate impact in terms of prices.

The company is trying to get projects as shovel ready as possible, but of course negotiations are much more difficult to undertake because face to face meetings are not possible. He did say however that he believes that the industry is learning how to deal with these things a little bit differently, allowing the company to continue to move forward with business development projects.

Fred Kanton, Project Director of Tinfos, says the company has three projects being constructed in Norway which are currently ongoing and on course for the final construction date at the end of 2020. It is also developing three projects in Indonesia which are in the pre-qualification stage. Staff are currently working from home on prequalification.

Prior to the COVID-19 outbreak the company was also looking at operations in Macedonia, but Kanton said that he thinks it will be some time before the company is able to have operations there, particularly as the outbreak has delayed elections in the country until next year.

Tor Berntsen, Chair of the Board at Nordic based engineering company Malthe Winje, spoke about activities in East Africa where the company develops small scale hydropower up to 30MW. Berntsen explained how the company was able to finish and commission one project on 18th March in Rwanda, with the company’s two test engineers able to return to Norway two days before the airports shut. That project is now in operation running quite well, Berntsen said, noting that the company has an advanced remote control system installed, allowing for remote service and follow up from Norway.

At another project in Rwanda the company signed a PPA in December and is now negotiating with lenders trying to complete financial closure on the project by June. However, as things are moving much slower as a result of COVID-19, the company has also sent an application to the authorities asking for an extension, referring them to force majeure. The lender is however still active, and Berntsen said he believes you need to be proactive to achieve progress on the projects.

The company is involved in two projects in Kenya were it was aiming to sign the PPA at the end of March, that was postponed with no indication as to when that will conclude

With regards to future incomes, Berntsen said the company only goes for projects with a firm PPA fixed tariff, but has experienced the trend that customers expect a reduction of the tariff, as such the company is expecting that in negotiations. “We don’t expect it to be any easier to get bankable PPAs signed on the projects we are persuing,” he said.

Securing the future of projects

The impacts felt by the hydropower industry have in some cases been hard hitting and are likely to go on for some time. In the UK, the British Hydropower Industry wrote a very detailed letter to Kwasi Kwarteng MP,Minister of State for Business, Energy and Clean Growth in April, which clearly highlights the effects of COVID-19 on the country’s industry. 

While the association highlights the work undertaken to deliver The Feed-in Tariffs (Amendment) (Coronavirus) Order 2020 on Monday the 30 March, providing an extension to FIT deadlines by six months for schemes whose accreditation end-date falls before 30 September 2020, it says this measure does not alleviate critical threats of delays to at least 58 hydropower projects in progress in the UK, amounting to a combined total 35MW of capacity, with investment capital at risk of £150 million. 

The vast majority of these schemes, the letter says, have a commissioning deadline of March 2021, which is now less than a year away. The Association asked the Minister to implement a second emergency Statutory Instrument to delay the completion deadline for hydropower schemes which have a commissioning deadline before April 2021 [or before October 2021 in the case of some community schemes] by a further 12 months. 

The letter points out that while hydropower schemes have a two-year build window under the FIT Order, the first year of developers’ time is taken up with, amongst many things, meeting pre-commencement conditions imposed by the abstraction license and planning consent, negotiating the implementation of the grid connection and dealing with many other stakeholders, as well as raising the required finance.

There are also a number of seasonal constraints which could impact the construction programme, such as golden eagle nesting and Atlantic salmon migration and spawning. This means that work could stop during these events, and work gets delayed further, with developers not able to catch up later in the year. There have also been situations where 

public and charity sector landowners have either stopped developers from working or are refusing to let work begin. All this means developers will have a very limited time to build a project and in some cases they will not physically be able to meet FIT deadlines.

Added to this is the issue of the supply chains globally. Supply chains are now so integrated that nearly every project relies on at least some key components from abroad. Many turbines, generators, control panels, pipe and components of the grid connection are internationally sourced including Austria, Germany, France and Czech Republic. Even those primarily sourced in the UK typically contain international components. All suppliers (including those in the UK) are warning of delays but are unable to quantify the delay until the duration of the effects of Covid 19 are known both in the UK and internationally.

The larger items (particularly turbines) are bespoke items on long lead times (8-12 months). Scheduled delivery is normally relatively close to the commissioning date as the site is not ready earlier; therefore there is very little slack in the delivery window.

At a more local level, prior to the closure of the sites, all developers were experiencing problems in obtaining construction materials such as concrete, steel reinforcement and structural steelwork.

Projects will have some slack between planned commissioning dates and FIT deadlines. These are typically in the range of 2-4 months and may be required to meet other delays to programme encountered during construction. Failure to qualify for the FIT would mean revenues would be less than 50% of those projected and would kill all projects.

Should construction recommence it may be possible to accelerate some work at additional cost but this would be difficult to achieve whilst social distancing measures were in place.

There is a distinct risk of projects being terminated to avoid further expenditure, (e.g. stage payment on turbines, grid etc.) once the point is reached when it’s unlikely that they can be completed in time without an extension to the FIT deadline.

Funding is another issue, Investors, including banks, can see all of the problems faced by the industry and are understandably reluctant to put more money in to projects without clarity on a FiT extension that they can be confident will get the projects all the way to completion and successful FiT accreditation.

Funders often require a programme buffer between commissioning and the FIT deadline. If this is not programmed as being achievable, funding will, in many cases, be withheld so self- funding or expensive bridging finance would be required. On bigger projects this would be impossible.

The Barr River project being developed in its entirety by the Morven Community and would be the largest community hydro project in the UK at 1.6MW. It was due to be reach financial close on Friday 31st March. To date that has not happened and the lack of certainty over meeting the FIT deadline is a significant factor.

Impacts of COVID-19 – Working remotely

Remote working is considered a key tool to combat the spread of the virus. Automation company ABB said it is accelerating remote connectivity for customer operations during the COVID-19 crisis

“During the COVID-19 crisis, governments and companies are having to make difficult choices, balancing people’s safety with economic livelihood. ABB is committed to supporting both: protect people, while helping businesses to stay operational during these challenging times,” said Peter Terwiesch, President Industrial Automation, ABB. “Remote services and digital solutions can make a major contribution to keep people safe, production running, and critical supply chains and economic livelihood preserved.”

As businesses are being directed to limit site work, the need remains to ensure that assets continue to operate across utilities, energy, process, hybrid and maritime industries, safeguarding food processing, power generation, water management, tissue production, data centers and the transportation of goods.

ABB is working with customers to ensure the access to field operators and service engineers who cannot be on-site at this time, by delivering control room livestreams, operational insights, process data and plant key performance indicators to users sheltering at home.

To ensure continuous operations, customers can access a suite of ABB remote-enabled solutions, including remote condition monitoring of critical assets; augmented reality maintenance support; online tools for training and spare parts stocking; and self-diagnoses that mitigate risk to assets, processes and security.

Many of these services are delivered to customers through ABB Ability Collaborative Operations, a suite of digitally enabled solutions and services, and its network of Collaborative Operations centers located around the globe. With 24/7 access, ABB domain experts and data scientists use digital technologies to help customers monitor assets, processes and risks; jointly derive insights from data; suggest mitigating actions; and provide critical remote assistance to help customers to keep production running.

Terwiesch continued: “We are committed to support our customers to run their operations safely, to keep the lights on, keep people connected, and help us all to weather this storm, together.”

In mid April, to support infrastructure engineering ecosystems working from home, Bentley Systems announced that it was opening up full access to its ProjectWise 365 cloud service and waiving subscription fees through to September 30

ProjectWise 365, leveraging Microsoft 365 technology and office productivity tools, extends the reach and accessibility of BIM and infrastructure engineering data to facilitate collaboration and design review across the ecosystem of project stakeholders. As an “instant-on” cloud service accessed through a web browser to simplify design review, transmittals, RFIs, information sharing, and issues resolution, ProjectWise 365 is perfectly suited for quick adoption while working from home, eliminating the need for combinations of generic technologies such as drop boxes and PDF.

“The enterprises using ProjectWise Design Integration for work sharing, which include 74 of the ENR Top 100 Design Firms, have been telling us that they credit ProjectWise for sustaining their project productivity over the forced transition to work from home,” said Dustin Parkman, VP, Project Delivery for Bentley. “Now, by broadly and immediately opening up access to our new simplified ProjectWise 365 cloud service, we’re extending ProjectWise advantages in collaboration and design review to infrastructure engineering project teams at every scale. By fully ‘digitally’ enabling every infrastructure professional, we hope to support their resilience in surmounting this crisis.”

Gregory J. Ellwanger, P.E., Project Engineer for BLA, Inc. said, “The present work-from-home conditions and coordination with multiple parties highlight how critical it is to our business and our role as prime consultant on projects, that our project teams always stay connected and productive. ProjectWise 365 cloud services enable us to rapidly deploy a common BIM collaboration environment that avoids the data silos, coordination delays, and the other limitations we’ve experienced while using network drives, file-sharing services, and email. ProjectWise 365 allows us to coordinate designs more quickly and reduce risk in contractual exchanges, regardless of the location of project participants, adding resilience to our design practice and increasing our ability to deliver high-quality projects on schedule.”