Hydropower Investment Research Articles

Scenario Simulation and Efficiency Study of Hydropower Development to Promote Regional Sustainable Development: An Empirical Analysis of a Province in Southwestern China

Hydropower is a significant component of China’s contemporary energy framework, with its construction and operation critically contributing to the advancement of sustainable development in the region. However, the influence of hydropower development on regional sustainable development is not evident, and the course of its effect is not clear. In this work, on the basis of assessing the effect of hydropower development on regional sustainable development, a system dynamics (SD) simulation model was created, and 15 distinct development modes were set and tested. The relative driving efficiency of hydropower growth on sustainable development in a province in Southwest China under several scenarios was assessed using the super-efficiency-slacks-based measurement (Super-SBM), and an efficiency analysis was undertaken. The study’s findings demonstrate that: (1) Hydropower development had a complex driving influence on sustainable development in the province in 2015–2022. (2) The relative driving efficiency of the province over the study period exhibited a changing pattern and was at a high level greater than 0.7. (3) New hydropower investment and hydropower generation are the major factors impacting the relative driving efficiency of hydropower development on regional sustainable development in the province. The study’s findings provide a platform and reference for supporting regional sustainable development through hydropower development.

Impact of green finance on hydropower investments: A perspective of environmental law

With growing global environmental concerns and the commitment to sustainable development and stricter environmental laws, green finance has emerged as an important means of supporting renewable energy projects. Using data from Chinese provinces from 2015 to 2021 as the research sample, this study, through the lens of environmental law, explores the relationship between green finance, environmental regulation intensity, and hydropower investment. Results show that green finance is positively correlated with hydropower investment, and environmental regulation intensity positively moderates this relationship. Heterogeneity analysis reveals that the impact of green finance on hydropower investment is more pronounced in regions with higher education levels.

In and Out of Plain Sight: Interrogating Power in the Mekong Riverscape

The Mekong River has long conjured images of power: cascading waterfalls, impenetrable rapids, and pervading spirits. But power is always malleable and shifting, a fact not lost on the human and nonhuman agents who live with the river and its tributaries. Rises and drops in water levels that once fluctuated in accordance with the seasons have now become beholden to the electricity needs of urban centres like Bangkok: a shift from watershed to powershed. The emerging techno-political realities of the Mekong give rise to new ways of seeing and managing the river, often at the cost of long- held local understandings and configurations of power. The recent boom in hydropower development in the Mekong Basin has been alarming, and rapid change has had adverse impacts on the riparian peoples who depend on the river for their livelihoods. Despite the countless negative social and ecological impacts from dams, especially on the mainstream Mekong, hydropower investments and construction continue. New hegemonic scales and configurations of power have emerged in the Mekong Basin, but older local ones have not simply disappeared. Rather, power shifts in and out of plain sight. In this special issue, we trace the flows, scales, and reconfigurations of power from the management of Mekong water flows and the financing of hydropower projects through to the ruptures and (un) intended consequences of hydropower dam projects on living human and nonhuman worlds in the region. Through a multi-scaled and multi-sited lens, we bring to light emerging worlds in the Mekong Basin.

Cross-influence of Risk, Return, and Governance on Decision-Making in Hydropower Investments

The sustainable growth of an economy pivots on a robust financial system, particularly in the context of capital availability. This study analyzes the behavior of investors towards initial public offerings (IPOs), focusing on the hydropower development sector in Nepal. The research explores the multifaceted relationship between factors such as risk, return, and governance on investor behavior, considering elements like Idiosyncratic risk (IR), timing of issue (TIPO), Bandwagon effect (BE), expected return (ER), sectoral performance (SP), corporate governance (CG), pre-issue financial health (PFH), and marketability (MKT). Additionally, sociodemographic variables and their connection to investor behavior are examined. Employing a descriptive research design, the study involves a sample size of 392 individuals, selected through a convenient sampling method. The study's main finding documented that idiosyncratic risks, expected returns, and corporate governance stand out as crucial factors influencing investment decisions (P < 0.05). Notably, the regression analysis indicated the absence of a significant impact from market risks (P > 0.05), including the bandwagon effect and IPO timing, on investor behavior towards hydropower IPOs. This finding suggests that Nepalese investors prioritize returns and organizational governance over market risks, despite having significant concerns regarding idiosyncratic risk. The analysis also reveals significant associations between investor behavior and sociodemographic variables like age, education, occupation, and primary investment objectives (P < 0.05). This study offers valuable insights and implications for investors seeking to align investments with their goals. Hydropower developers should prioritize investor protection and transparency, while regulators must enhance disclosures, shareholder accountability, and project oversight.

Transnational governance standards in ensuring sustainable development and operation of hydropower projects in transboundary basins

The notion of “transnational” law encompasses a sophisticated corpus of globally applicable rules, standards and safeguards, often informal in origin, which are widely accepted around the world and supported across a range of business sectors and civil society constituencies. The recent proliferation of such “transnational” law extends to the hydropower sector, where normative standards and safeguards increasingly apply to promote and certify sustainable practices in the development and operation of hydropower projects. Such projects are associated with significant environmental and social impacts and the projected increase in hydropower investments, mainly in emerging economies, will require effective supplemental regulatory tools. Many such projects will be located in, or impact upon, international rivers, thereby adding a further layer of complexity regarding their effective regulation and increased the risk of inter-State disputes over the equitable use of shared waters. Such complexity and risk will be exacerbated by increased uncertainty due to climate change. Thus, the existence of widely accepted transnational standards, which are relevant and applicable to hydropower development globally, can play a key role in building trust between watercourse States and in promoting greater transboundary water cooperation. This article explores the potential role of transnational standards in improved regulation of environmental and social impacts associated with hydropower projects located on international watercourses and the extent to which such standards cohere with established and emerging requirements of international water law. It thus examines the synergies arising between these informal and formal regulatory frameworks with a view to developing a better understanding of their interaction in practice. In so doing, it focuses on two key categories of applicable transnational regime: a sustainability certification and labeling scheme dedicated to hydropower projects and operated by the Hydropower Sustainability Council; and MDB environmental and social safeguard standards imposed upon major water-related projects, including hydropower projects, particularly those adopted by the World Bank and the European Bank for Reconstruction and Development (EBRD).

The Spatial Politics of the Tonle Sap: A Multi-Scale Analysis of Conservation and Development Challenges

Key resources of Tonle Sap Lake are fish, biodiversity and natural resources. Its governance has been casted as a central pillar in the development of Cambodia. Although there are considerable literatures and documents, supporting the protection and conservation of the lake, there are also policies and development frameworks promoting hydropower investments and infrastructure developments, affecting the TSL. Accordingly, this study questions how the water, fishery, and biodiversity and infrastructure developments are embedded in the conservation and developments of TSL. In answering this question, the study conducts the literature reviews and case studies in the Tonle Sap Biosphere Reserves, employing the political ecology approach. It concludes that TSL is food producing engines of Cambodia, the heartbeats of the Mekong River Basin, and a global biodiversity hotspot. The protection and conservation of the lake bring benefits to all at national, regional and global levels, but the complex interplay of actors, arranged at various scales and levels, has collectively created the challenges facing the lake, giving rise to confrontation between the conservation and hydropower, questions about the long-term sustainability of its resources and the livelihoods that depend upon it.

Energy transition paradox: Solar and wind growth can hinder decarbonization

The decarbonization of energy systems requires the deployment of intermittent renewables (wind and solar) with increasingly low costs. The growth of these renewables impacts power prices, which may influence hydropower investments and the adoption of fossil-fuel options for baseload electricity. It thus remains unclear whether deploying more intermittent renewables would reduce the net carbon emissions across energy systems in the absence of well-designed policy. This study first developed a techno-economic optimization model to explore the impacts of future projections of intermittent renewables on long-run electricity prices and the subsequent hydropower investments, using Hubei Province of China as a case study. The carbon emissions associated with the change in hydropower investment were then quantified. Results indicate that the new policy-driven renewables deployment reduces the electricity prices by 36 % on average over 2021–2100, compared to the case with the policy specified in the prior (13th) National Five-Year Plan. Without intervention, the lower electricity price could result in a 42 % reduction in hydropower investments by 2050. With increased intermittent renewables and decreased investments in hydropower, the energy system is expected to deploy more backup fossil-fuel options, which could increase carbon emissions by 45 %. Therefore, deploying more renewable energy would depress the investments in hydropower plants and further hinder decarbonization unexpectedly, suggesting a possible paradox in the energy transition. This possible paradox calls for a new, and robust policy to ensure the benefits of decarbonization are realized regardless of potential changes electricity prices.

An Analysis of Approved Foreign Direct Investment in Hydropower of Nepal

Hydropower is the major economic sector of Nepal. This paper analyzed approved FDI in hydropower sector based on secondary data 2004-2022. Descriptive research design has been used. The quantitative data presented in tabular form. Bar-diagram and flow chart used as required in analysis. Domestic financial resources are not sufficient to generate electricity. Due to this government of Nepal realized FDI in this sector. The government promotes and facilitates FDI by introducing appropriate policies, legal and institutional arrangements to create an enabling environment for domestic as well as foreign investors. Foreign investors are playing important role for hydroelectricity generation. Upper Bhotekoshi and Khimti project are developed By FDI. This study shows that the status of approved FDI on hydropower sector is increasing since 2004 to 2022 (except 2004-05, 2006-07, 2016-17, 2018-19 and 2021-22) with respect to total approved FDI in Nepal. It clearly state that foreign investors are interested to invest in this sector but there are some obstacle for them. If the government provides more secure environment to foreign investors they will be highly encouraged to invest in this sector.

Hazard assessment of a pair of glacial lakes in Nepal Himalaya: unfolding combined outbursts of Upper and Lower Barun

Due to climate change, the future Glacial Lake Outburst Flood (GLOF) risk is more likely in the Himalayas. Despite several GLOF studies, little attention has been given to the combined surge that can result from a pair of upstream-downstream glacial lakes. We chose Upper and Lower Barun glacial lakes as a pilot study due to the region’s increasing population and hydropower investments and the possible outbursts of upper-lower glacial lakes. This study mainly considered four scenarios (100 and 50% breach combination of upper-lower lakes), using a two-dimensional dam break model and inundation propagation. Based on our observations, the glaciers in the study area shrank by 33 km2, and the two glacial lakes expanded by 2.06 km2 between 1976 and 2020. The modeling result suggests that the single flood triggered by Upper Barun cannot travel beyond 50 km; however, the combined flow from the lakes could reach over 85 km. Our results illustrate that at least 60 buildings, motorable bridges, and infrastructures of Arun hydropower along the river course have high damage potential. The study insights can be helpful for effectively planning and formulating various disaster risk reduction initiatives to mitigate the likely effects of glacial lake(s) outbursts.

Hydropower Development and the Neglect of Inland Capture Fisheries from a Food Systems Perspective

This paper addresses why food security implications of projected losses to inland capture fisheries due to hydropower development have been neglected in policy arenas. Drawing on the case of the Lower Mekong Basin, this paper applies a conceptual framework for analyzing this question as a case of fundamental food system change. Four inter-related axes of change – narratives, actors, institutions and resources – constitute the framework for analyzing and challenging the dynamics and values of food systems change. Despite substantial scientific evidence on the nutritional and food security significance of the fisheries, and the magnitude of negative impacts of planned hydropower development, there has been no discernible shift in hydropower investment and related policy. The lack of attention to this food production loss is due to a broader transformation in food systems, itself shaped by powerful interests and values. Addressing the neglect of fisheries requires challenging this trajectory of food system change.

Value–Risk Calculator for Blended Finance: A Systems Perspective of the Nachtigal Hydropower Project

Hydropower as a renewable source can help many countries achieve their sustainable energy and climate goals, but large projects are challenging to finance because of their costs and risks. To fully realize the climate benefits of such projects, sponsors have recently fashioned complex financing arrangements that structure and allocate risks to reduce financing costs. This paper focuses on the blended financing approach adopted for the Nachtigal Hydropower Plant (NHP) in Cameroon. The purpose of the paper is to present a detailed systems analysis of Nachtigal’s financial arrangement to address the question of why the complex financing approach worked in practice. We accomplish this by creating a “financial simulator”—a computational model for evaluating risks and incentives embedded within the financing structure under different contract architectures and risk–event scenarios. Our simulator is a dynamic value–risk calculator that can be easily updated to study other climate-oriented projects that involve complex financial arrangements. We evaluated three aspects of the financing/contractual arrangements that made Nachtigal “bankable:” (i) guarantees that covered nonpayments, (ii) financial options on locally sourced loans; and (iii) an interest rate swap. We found: (i) the guarantees recovered project value threatened by four specific risks often associated with large hydropower investments (cost overruns, schedule delays, offtake risk, and low flow due to climate change); (ii) the mechanism significantly lowered interest rate charges; and (iii) private finance was mobilized—especially due to the options. The financial safeguards employed increased the likelihood of capturing the long-run sustainability benefits from NHP.

Afterlives of depopulated places

Abstract Emptiness appears as a condition of possibility of two common visions of rural development in Serbia—extractivism and rural tourism. This article investigates the underlying sociocultural mechanisms of this relationship. It compares two mountainous villages in Serbia that were depopulated during modernization of Yugoslavia and included in hydropower investment schemes during the current energy transition yet ended up within different models of development and contrasting articulations of emptiness. In Rakita, emptiness takes the form of yearning for defective or absent infrastructure and serves as an asset in extractive projects. In Dojkinci, rural tourism has emerged as an alternative to extractivism. While both local communities and institutions take it as the last hope for depopulated but naturally exceptional localities, tourism brings commodification and increasing social differentiations.

Regional Allocation Design and Efficiency Improvement of Rural Water Conservancy Project in China

Different development levels and speeds in different regions in China leads to the great difference in the allocation of rural water conservancy projects and the inefficiency. In order to improve the services function and configuration efficiency of rural China water conservancy infrastructure from water engineering, water supply engineering, reservoir engineering, the work chose the Chinese provincial panel data from 2017 to construct input-output indicator evaluation system with super-efficiency DEA. Then we designed the rural area of configuration of water conservancy projects for comparative analysis and China’s current rural water conservancy project region configuration system of geographical network coverage. Finally, based on the configuration in the grid lines, the method was proposed for efficiency. In order to analyze the regional difference in input-output efficiency of rural water conservancy construction, the panel data of 2017 was selected to establish the input-output indicator system of management efficiency. The results of super efficiency DEA show the general situation of input-output efficiency of rural water conservancy construction in China is not good, while there are some differences among input-output efficiency of rural water conservancy construction in East, West, Middle of China. Besides, Qinghai, Beijing, Hainan and Tibet are located in the last four. Finally, the four regions are all relatively effective with less than 100% super efficiency value, and four regions has redundant input in hydropower investment.

A Systematic Review on Investment Risks in Hydropower to Developing Sustainable Renewable Energy Systems

Hydropower is regarded as one of the most important renewable energy sources for the present and the future. However, hydropower projects are exposed to various risks and uncertainties, including economic, environmental, social, geological, regulatory, political, technological, financial, climate, natural, and safety concerns. Thus, to know the existing risks in the hydropower sector, a systematic literature review is conducted to find all peer-reviewed articles in English published between 2018 and 2022 that dealt with investment risks and uncertainties associated with hydropower. This systematic review paper considers 'Hydropower Investment Risk' critical to developing sustainable renewable energy systems. The keywords selected for the search are tailored to identify all the relevant articles related to 'Investment Risk in Hydropower,' where hydropower is referred to as mini, micro, and large hydropower. In addition, the keywords that correspond to investment risk in the hydropower sector are chosen. Two crucial databases 'Scopus' and 'Google Scholar' search yielded 6689 and 123,000 articles, respectively. Among 34 full texts, 31 primary source articles and 3 secondary source articles are reviewed. The many investment risks pertaining to hydropower investments obtained from the extensive review are: 1. risks related to climate change and hydrology 2. Risks related to environment and anthropogenic 3. Market risks related to credit, capital, and other financial risks 4. Risks related to substitution from renewable energy to fossil fuels 5. Risks related to socio-political and technological changes 6. Risks related to institution, policy, legality, and regulatory 7. Risks related to human capital development, and 8. Impact of climate change on hydropower's revenue generation.

Explaining Chinese SOEs’ risk tolerance in the developing world: Evidence from Chinese hydropower investment in Cambodia

In recent years Chinese state-owned enterprises (SOEs) have become a major source of development finance in the developing world. Although some Chinese SOEs are risk averse, others endure high risk as a result of public backlash from projects they conduct in host states. Why are some Chinese SOEs more risk tolerant than others when engaging in investment projects in the developing world? In order to explain this variation, the author explores the domestic political economy underlying Chinese SOEs’ overseas investment decision-making, arguing that SOEs with increasing overseas market share are less likely to pursue risky projects, acting as responsible stakeholders in developing countries. To illustrate this hypothesis, the author investigates Chinese-financed hydropower projects in Cambodia, drawing upon original research records gathered in China and Cambodia between 2017 and 2020. Comparative case studies yield the following findings: First, SOEs with increasing market share are less likely to engage in hydropower projects with significant environmental and ecological impact; second, SOEs are less likely to take on risky projects with financing from Chinese policy banks. This article indicates that variation among Chinese SOEs will ultimately result in diverse outcomes for and reactions to Chinese state-sponsored infrastructure projects in the developing world. It also sheds light on the need for more effective regulation from the Chinese government to ensure Chinese SOEs’ responsible overseas investment.

Risk evaluation of energy investment projects along the Belt and Road based on cloud model and evidence theory

China's major energy projects along the Belt and Road are characterized by large-scale capital investment, long construction cycles, and complex investment environments, making it more difficult to assess project investment risks. Based on the PESTEL theory, a risk evaluation index system is constructed for energy enterprises' investment projects along the Belt and Road. In view of the uncertainty of energy investment projects, a risk evaluation method combining a cloud model and an evidence theory is proposed. To examine the developed index system and risk evaluation method, an overseas hydropower investment project is chosen and the risk factors are analyzed. The results suggest that the risk level of the enterprise's project is highest, the political and environmental risks are both high, the economic and project risks are both at average level, and the energy risk is relatively low, which verifies the effectiveness of this information fusion method. The method can be used to solve the problem of linguistic ambiguity and uncertainty in multi-attribute decision problems and is applicable to similar investment projects, thus providing a new technical path to assess the investment risks of energy enterprises along the Belt and Road.

Can renewable energy investment reduce carbon dioxide emissions? Evidence from scale and structure

Many countries have invested a lot in renewable energy to reach “carbon neutrality”. However, whether renewable energy investment effectively reduces carbon dioxide emissions still needs to be verified systematically. This paper examines the impact of renewable energy investment on carbon dioxide emissions by considering both scale and structure. It uses data from 13 countries that have made large investments in renewable energy from 2010 to 2019. A parallel multiple mediator model is used to analyze the impact of renewable energy investment scale on carbon dioxide emissions, in which multiplier effect, technique effect, and structure effect are identified as mediation effects. A chain multiple mediator model and a parallel multiple mediator model are integrated to identify the effect of renewable energy investment structure on carbon dioxide emissions, in which allocation effect is also considered. It concludes that, on the whole, increasing renewable energy investment scale can increase carbon dioxide emissions. Specifically, increasing renewable energy investment scale can indirectly reduce carbon dioxide emissions through the technique effect and increase carbon dioxide emissions through the multiplier effect. However, the structure effect on carbon dioxide emissions caused by renewable energy investment scale is not significant. Moreover, increasing the proportional investment in wind energy can reduce carbon dioxide emissions. Meanwhile, increasing the proportional investment in solar energy and bioenergy can increase carbon dioxide emissions. This paper also finds that increasing the proportional investment in renewable hydropower does not significantly affect carbon dioxide emissions.

Balancing smart irrigation and hydropower investments for sustainable water conservation in the Indus basin

Indus River Basin (IRB) region of South Asia is severely water-stressed with irrigation receiving 90–95% of total surface water allocations and depletion of fossil groundwater reserves of more than 30 km3/year. Simultaneously, many supply-driven hydropower reservoirs, are planned in the basin. The reservoirs constructed upstream inflict severe environmental damages and reduce water availability for irrigation downstream. Policymakers promote smart technologies as a demand-based solution to reduce water consumption in irrigation. However, the effects of such technologies are not yet well understood, and unintended consequences (such as irrigation efficiency paradox and other nexus externalities) have recently begun to appear. Therefore, we use an integrated assessment model to analyze the proliferation of smart technologies in the IRB. The analysis suggests that if the Indus countries adopt a demand-based approach and irrigate their land completely using smart technologies, surface and groundwater withdrawals are indeed reduced. However, this reduction comes with a 33% increase in total expenditures, an increase in consumption across water and energy sectors, and higher withdrawals from fossil groundwater reserves. On the other hand, we find that if the countries were to balance their investments between smart and hydropower technologies it would not only reduce the increment in expenditure to 28%, but would also conserve irrigation water while avoiding the increased multi-sectoral consumption and environmental degradation. Thus, balancing investments between smart irrigation and hydropower projects can significantly reduce the economic and environmental (including conservation of water resources, meeting environmental flow targets, among others) costs of multi-sector water conservation in the IRB.

Delivering an off-grid transition to sustainable energy in Ethiopia and Mozambique

BackgroundOff-grid and decentralized energy systems have emerged as an alternative to facilitate energy access and resilience in a flexible, adaptable way, particularly for communities that do not have reliable access to centralized energy networks both in rural and urban areas. Much research to date on community energy systems has focused on their deployment in Europe and North America. This paper advances these debates by looking at how community energy systems can support energy transitions in Africa. Specifically, it asks: what role can community energy systems play in the energy transition in East and Southern Africa?ResultsThis article investigates the potential for community energy to foster sustainable and just energy transitions in two countries in East and Southern Africa, namely Ethiopia and Mozambique. To do so, it explores transformations in Ethiopia and Mozambique’s energy systems through the lens of energy landscapes. This concept enables us to situate energy transitions within recent developments in energy governance and to understand current and future possibilities for change through the involvement of communities that currently lack access to reliable and clean energy. Our results show that when countries face the prospects of lucrative energy investments in natural gas or large hydropower, renewables are often deprioritized. Their suitability to address energy challenges and access gaps is de-emphasized, even though there is little evidence that investment in large-scale generation can handle the energy needs of the most disadvantaged groups. Initiatives and policies supporting community-focused renewable energy have remained limited in both countries. They tend to be designed from the top-down and focused on rural areas when they exist.ConclusionsEnergy transitions in Ethiopia and Mozambique, and many other countries with significant gaps in access to centralized energy systems, require putting inclusivity at the forefront to ensure that energy policies and infrastructure support the well-being of society as a whole. As long as investments in off-grid energy continue to depend on international organizations’ goodwill or development aid programs outside the ambit of national energy plans, energy access gaps will remain unaddressed, and there will not be a genuine and just transition to sustainable energy.

How does coal consumption constraint policy affect electrical energy efficiency? Evidence from 30 Chinese provinces.

In recent years, energy efficiency has been considered an extremely cost-effective way to reduce greenhouse gas emissions. China is a country with the world’s largest coal consumption and heavy reliance on thermal power generation. Therefore, the relationship between the coal consumption constraint policy (CCCP) in China and electrical energy efficiency is a topic worthy of study. Based on the panel data of 30 provinces in China during 2005–2016, this paper employs the difference-in-differences (DID) to examine the impact of CCCP on electrical energy efficiency in China. The results indicate that the implementation of the CCCP reduces electrical energy efficiency in the pilot provinces. Based on the mechanism tests, the cost effect outweighs the innovation effect, which is why CCCP decreases electrical energy efficiency. The results of the heterogeneity analysis show that the influence of CCCP is more significant in the provinces with weak law enforcement and small hydropower investment and northern provinces. This study suggests that the Chinese government can promote corporate technological innovation by improving the environmental compensation system and increasing environmental law enforcement to improve electrical energy efficiency. Meanwhile, renewable energy projects should be the focus of future investment.Supplementary InformationThe online version contains supplementary material available at 10.1007/s12053-022-10023-2.