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Talking Point - Hydropower


What impacts has hydropower had on water, energy and food security in developing countries?

How might climate change and other factors affect hydropower's performance in the future?

The Harnessing Hydropower study addresses questions such as these based on a literature review and three country case study visits (to India, Malawi and Nepal), during which a broad range of stakeholders in the hydropower sector were consulted.

The high-level findings of the study were that:

  • Hydropower is here to stay. Over the next 30 years the development of new schemes is likely to play a significant part in the economic development of many countries in sub-Saharan Africa and South Asia, and robust planning and management approaches will be critical to the level of benefits and sustainability achieved.
  • Strategic assessment must be undertaken, as a first step, to match the type and scale of investment options to the needs identified (with special consideration of access and equity for the poorest). A broad, accurate and transparent view of all possible costs, benefits, trade-offs and synergies is needed.
  • Private sector investment needs to be encouraged and supported to make up a shortfall in national funding. This can be a complex task requiring in-depth analysis of the energy sector as a whole and the political and economic incentives operating within it.

Detailed evidence from the three case studies supports the findings. For example, small community hydropower schemes in both Nepal and Malawi have been able to provide access to electricity far beyond the reach of national grids, and a range of co-benefits to the poor including local economic development and improved healthcare and access to information. Both countries are highly reliant on grid hydroelectricity, which has supported their development to date without too many drawbacks. Greater generation could have been achieved by improved cost recovery from electricity tariffs financing maintenance and investment- a common theme across all three case studies. There are also complex interactions with other sectors of the economy such as agriculture and forestry, which could lead to problems in the context of climate change and further development.

The State of Himachal Pradesh in India is generating grid hydroelectricity from large scale schemes in excess of its own consumption, providing it with a valuable revenue stream to support growth. There is evidence that climate change will increase river flows, providing an opportunity to capitalise by further investment in hydropower potential. It faces a number of political and economic barriers to developing its substantial remaining hydropower potential however, and India's electricity markets are not functioning as well as they might to maximise benefits from increased generation. This and other factors have deterred investors from developing hydropower concessions already awarded.

Nepal's historical investment decisions about grid-connected hydropower development have left it with relatively expensive electricity and a severe shortage of dry season (winter) electricity due to over reliance on run-of-river hydropower. It has undertaken a strategic review of the best options for developing storage-type hydropower which could address this shortfall but substantial financial investment is still required in what has until recently been a relatively unstable and therefore unattractive political and economic environment.
The examples above give just a flavour of the types of findings generated by this study, which is intended to be useful to Department for International Development (DFID) staff together with other development professionals and government officials interested in the performance and development of the hydropower sector and the trade-offs between water, energy and food security in the context of climate change.

Five reports are available through the Evidence on Demand website as outputs of the study:

1) Literature Review;

2) Nepal Case Study;

3) Malawi Case Study;

4) Himachal Pradesh, India Case Study; and

5) Synthesis Report.