Hydropower - The Sustainability Management Wiki

Authors: Tokula Enekwu-Ojo Josephine, Linet Kerubo Ogoti
Edited by: Michel Nhaca, Anda-Alexandra Dragomir
Last updated: May 18, 2026

Executive summary

Hydropower converts the energy of flowing or falling water into electricity, most commonly through run-of-river plants, storage reservoirs, and pumped-storage systems. Operators route water through intake structures and penstocks to turbines and generators, then return it to the river and transmit power to the grid. Because hydropower can ramp output quickly, it can provide dispatchable capacity, ancillary services, and flexibility that helps stabilize grids with growing shares of variable wind and solar generation.

Hydropower economics typically combine high upfront capital costs with comparatively low operating and maintenance costs because the “fuel” (water flow) is naturally replenished. Project costs vary widely by site conditions, civil works requirements, and existing infrastructure, while electricity prices depend on market design and system needs. Revenue models often rely on long asset lifetimes, power purchase agreements, and, for large projects, project-finance structures that blend equity and debt. Digitalization—such as real-time condition monitoring, predictive maintenance, and digital twins—can improve reliability, reduce downtime, and extend equipment life. Because dams are critical infrastructure, operators also need robust safety management, risk assessment, monitoring, and emergency preparedness to manage aging assets and changing hydrological extremes.

From a sustainability perspective, hydropower is a low-carbon option over its lifecycle, but impacts vary by project design and location. Key ecological concerns include river fragmentation, altered flow and temperature regimes, sedimentation in reservoirs, habitat loss, and greenhouse gas emissions from some reservoirs—especially in certain tropical settings. Effective mitigation can include environmental flow regimes, fish passage solutions, fish-friendly turbine designs, and sediment management measures such as flushing or bypass tunnels. Social outcomes also depend on governance: projects can create jobs, expand electrification, and support water security and flood control, but they can also drive displacement, affect Indigenous rights, and increase health risks around reservoirs. Strong environmental and social impact assessment, meaningful stakeholder engagement (including Free, Prior and Informed Consent where applicable), and long-term benefit-sharing mechanisms help improve equity and acceptance. Finally, stable policy frameworks and transboundary water governance are essential to balance energy goals with ecological integrity and community well-being, especially under climate-driven drought and flood risks.

1 Description and history

Hydropower, also called hydroelectric power, generates electricity by converting the kinetic energy of falling or flowing water. The term “Hydro“ comes from the Greek word for water.¹^,²^,³ Although there are other energy sources related to water bodies like tidal currents, temperature differences in seawater and ocean waves, hydropower is traditionally referred to as the power generated from damming rivers using turbines.¹ Many experts consider hydropower one of the oldest renewable energy sources exploited and used source of mechanical power.⁴ By 2015, hydropower had contributed between 15.4% and 20.3% of the world’s annual generated electricity serving as a vital and key renewable energy source.⁴

1.1 Components, classification and working principle

Electricity generation by hydropower technology can use different technologies, such as, run-of-river plant, pumped storage system or reservoir and hydroelectric dams.⁵ Typically, a hydropower plant system has storage, transport, mechanical, electrical and collection components.⁵ Water as the transport component, runs into the system through an inlet and flows out through an outlet.⁵ The inlet leads to the power station which holds the electrical and mechanical components for generation.⁵ Storage components, such as dams, are built for various reasons, including flood control, irrigation, public water supply, and hydroelectricity.²

The size classification of hydropower plants varies from country to country depending on the respective sites, where water source and sizes are considered.⁶ When considering the size, a hydropower plant can be classified as mini, micro, small or large depending on the generated power in kW or considering the vertical distance between the turbines and the water level as low, medium or high head.¹ With the basic components and classification in mind, the working principle involves falling water from the reservoirs or dams which forces the turbine blades to turn hence rotating the turbines.² The generator, connected to the turbine, consequently rotates and generates electricity as the generated electricity is then transmitted by power lines from the power stations.²

*Figure 1: Hydropower working principle*

1.2 History

According to ancient records, water power has been used as early as 4000 BC in Mesopotamia, essentially for farming, although the interpretation of evidence is ambiguous and insufficient.⁴ However, reliable evidence is found dating back to the I millennium BC found in a Greek poem dated 85 BC and some writings in Roman texts indicate that water power was used to pump water and grind grains.⁴ The development of water wheels in Egypt between the II and III centuries BC was recorded in Egyptian papyri.⁴ During the I century AD, China used basic wheels to drive mills and grind grains, and by the II century, Asia and Europe had adopted the use of waterpower wheels which were in use throughout to the 19th century, when hydro turbines were invented.¹ Hydropower had then gained more popularity, and by the 20th century, it was the most used form of electricity generation.¹ With the introduction of iron in England in the 18th century, advancement in more effective and reliable turbines which are still in use today was made.⁴

The very first hydroelectric power plant supplying electricity to multiple customers was commissioned on the Fox River in Appleton, Wisconsin, in the year of 1882, marking the beginning of the era of commercial hydroelectric generation.⁷ A few weeks after Wisconsin, a hydropower plant in Minneapolis was commissioned and later, small-scale projects in hydropower were implemented in Indiana, with its first plant in Darjeeling producing 130 kW.¹ Hydropower continued developing in the 20th century where it became the only large-scale commercial renewable energy source by late 1900s.⁴ Switzerland had commissioned 7,000 small-scale hydropower stations by 1924 which still contributes until date to the net hydroelectricity generation in Europe and to the World, although advancements in technology made it possible to develop large-scale hydropower plants as demand also increased.¹ By 2024, the installed capacity of hydropower was 1,443 GW based on data from latest World Hydropower Outlook report made available by the International Hydropower Association (IHA).⁸

1.3 Relevance

Hydropower is a significant form of renewable energy as it is cleaner compared to fossil fuels and is currently regarded as a cheaper source of energy.¹ Further, hydropower is categorized as a renewable energy source as it relies on sun energy where regenerative hydrological (water) cycles emanate thus their sustainability and renewability.⁶ Most of the hydropower plants in the early years were built to supplement nuclear energy to ensure it runs at full capacity and just as before, excess electricity during low demand periods is stored for utilization during high demand and currently for renewable energy balancing to the grid.⁴ Hydropower, among other renewable energy sources, has offered vital support in the reduction of carbon emissions, in comparison to energy from fossil fuel.⁵ Hydropower has supplied about 15–16 % of global electricity in recent years. There was a clear increase in global hydropower generation of about 10% in 2024, rebounding from 4,180 TWh in 2023 to 4,578 TWh, even though Latin America and southern Africa were challenged with severe droughts. In other words, this means that a total of 24.6 GW of hydropower capacity was added in the year 2024 alone. Despite this, hydropower is currently in fierce competition due to the quicker and lower-risk solar and wind projects, which are often chosen as complementary generation sources. An example is Ecuador, where the hydropower system faces great drought conditions, which have triggered electricity blackouts. Water is what 72% of the country’s power generation depends on, which caused the government to seek a solution in the form of solar projects, with a view to adding resilience. Moreover, the Kariba hydropower station reduced its generation because of drought, which created power cuts of up to 21 hours a day in both Zambia and Zimbabwe. Zambia is therefore exploring new supply options, which include an increase to 30% in the solar generation.⁸

The potential for hydropower is relevant, as it has many advantages over other energy sources and its estimated resource is about 5,000 TWh which is not restricted to resources depletion due to its promising and well developed technical and economic potential.²^,⁵ It is also estimated that with the utilization of hydropower resources to replace coal plants, an annual GHG emissions reduction of about 5,000 Mt of CO₂ will be achieved.⁵ Further, parts of the world, like Africa, have the greatest need for reliable and sustainable energy sources to support development.⁶ Hydropower poses some effects to the environment and the society despite the numerous advantages hence need for keen assessment to ensure sustainability and profitability.²^,⁵^,⁶

2 Economic performance

Many experts consider hydropower a reliable, crucial and efficient electricity source which can be quickly stopped or started depending on the demand that causes grid fluctuations.⁹ Hydropower projects promote economic expansions although large and small hydropower projects have different constraints.¹ Technology has played a major role in the reduction of hydroelectricity cost over the last decade where more development and market expansion has taken place.⁹ Hydropower is clearly an economically feasible technology: from a study carried out on 175 countries, out of which 150 of the countries have hydropower resources: 10 of the counties depend entirely on hydropower, 24 countries have 90% of their electricity from hydropower and 65 countries have 50% of their grid power from hydropower.¹

2.1 Hydropower cost and electricity price

Many experts consider hydropower an affordable power generation technology, despite its initial high cost as when compared to fossil energy sources that require continuous supply of expensive fuel, therefore having high operating costs.¹⁰ Combustion plants that require coal, oil or gas heavily depend on the cost of these fuel which is also the case for nuclear plants that depend on the cost of the nuclear fuel.¹⁰ On the other hand, hydropower plants depend on the water current flow which occurs naturally reducing the operation and maintenance cost of hydropower as compared to other energy sources.¹⁰ The cost of building a hydropower plant falls into capital investment which involves civil work, mechanical and electrical components, or operation costs involving subsidies, manpower and interest rates.⁹^,¹⁰ Hydropower has investment costs that range from less than 1,000 $/kW to 10,000 $/kW for small hydropower and 1,200 $/kW to 4,500 $/kW for large hydropower¹¹, which can also be as low as 500 $/kW where dams may already exist, noting that small hydropower may cost even more.³^,⁹ The implementation cost (Figure 2, below) of large hydropower plants (greater than 10 MW) depend upon location, local hydrological conditions, terrain, geology and existent infrastructure where civil works take about 50% of the total cost capital expenditure, while 30% of it goes to mechanical and electrical components, 5% to the Grid connection, and the remaining 15% accounts for costs with planning, project development, environmental impact assessment, permitting, land acquisition and social and environmental mitigation activities.¹¹

*Figure 2: Hydropower capital investment distribution.³^,⁸*

The cost of the electricity depends on maintenance and operating costs of the power plants together with the market prices determined by marginal cost of generators.¹⁰ By the end of 2024, the weighted-average cost of hydroelectricity was 0.057 $/kWh.¹² With time, renewable energy has had major effects on the electricity markets due to its high investment cost and low maintenance and operation cost while traditional power sources in turn have higher operation cost.¹³ Electricity cost has been used over time been used to determine the type of power plants to invest in through the extrapolation of market trend in consumption and prices across all relevant sectors.¹⁰

2.2 Growth and development of hydropower

2.2.1 Revenue growth

The growth of hydropower globally has been driven by the increasing energy demand and economic development goals since hydropower offer valuable output despite the indication s of low returns in the market.⁴^,¹⁴ In Cambodia for example, hydropower contributes to the economic growth as more investment in hydropower is done to reduce electricity price and avail power to rural areas.¹⁵ Another growth contribution by hydropower is the surplus energy generation for exportation in Laos.¹⁴^,¹⁵ Laos currently exports several thousand megawatts of electricity to Thailand, in fact over 5,600 MW of capacity through cross‑border hydropower interconnections. Moreover, it has established long‑term power purchase agreements targeting up to 9,000 MW of exports to Thailand by the mid-2020s, with additional planned increases to other partners from the Association of Southeast Asian Nations (ASEAN), reflecting export capacity rather than an instantaneous flow in gigawatts. Another partner is Vietnam, where a target of 5,000 MW is set to be exported by 2030.¹⁶ The growing demand in China has necessitated dam construction in Lower Mekong whereas countries in the Mekong Basin aim to produce more electricity for exports, job creation and revenue generation.¹⁴ Even though hydropower remains the largest single source of renewable electricity generation, its proportion in terms of the total renewable generation has fallen. This occurred because wind and solar capacity and generation have grown rapidly in the 2010s and early 2020s. As an example, by 2030, the International Energy Agency (IEA) reports that hydropower supplied around 47 % of global renewable electricity generation, with wind and solar together making up a growing share. Thus, electricity generation from hydropower alone is set to increase by 7% between the years of 2025 and 2030.¹⁷ Contributing about two-thirds of the world’s hydropower capacity are the United States, Russia, India, Canada, China, Brazil, and Norway.¹³

Figure 3 showcases the global and regional hydropower generation, as well as global share, plotted between the years of 2000 and 2022.¹⁸ It is clear that the global hydropower generation increased substantially, rising from about 2,700 TWh to around 4,200 TWh. This growth resulted from expansions in Asia, while Europe and North America faced constant output. The absolute production decreased from around 17% to below 15%, which matches the expectations broughtt by the growth in demand and alternative renewable technologies. Annual variability occurs, which is shown by declines in generation, marked using the vertical dotted blue lines, corresponding to hydrological shocks such as droughts.

*Figure 3: 2025 LCOE estimates for renewable energies.⁹*

The Levelized Cost of Electricity (LCOE) of different energy sources are comparable to hydropower LCOE particularly for the renewable energy sources that shows the revenue as compared to the investment.⁹^,¹⁰^,¹⁹ Hydropower has a lower LCOE compared to fossil fuel thermal plant of the same size where the estimated hydropower LCOE in 2018 was 0.047 $/kWh making it the most affordable electricity source in most markets.¹⁹ The LCOE of hydropower and geothermal increased as compared to that of biomass, solar PV, concentrating solar power, offshore wind and onshore that reduced when compared in 2017 and 2010 where hydropower still showed affordability among all sources.⁹ However, as seen in Figure 5, LCOE average estimates for 2025 for the renewable energies are: 60 $/MWh, 65 $/MWh, 62 $/MWh, 142 $/MWh, 95 $/MWh, 59 $/MWh for solar PV, onshore wind, geothermal, offshore wind, biomass and hydropower respectively.¹⁰

Thus, Figure 4 presents a 2025 comparison of LCOE across several main power generation technologies, such as hydropower, solar photovoltaics (PV), onshore and offshore wind, geothermal energy, and bioenergy. The bars are the mean LCOE values, while the ranges show the minimum-maximum full range. This can occur due to variable discount rates, capacity factors, capital expenditure (CAPEX), and other operational assumptions. Even though hydropower may not always have the lowest average LCOE, it has a stable cost performance in time, ending up as a reliable component for low-carbon systems.

*Figure 4: CO₂ emission among renewable energies in 2018.²⁶*

2.2.2 Market trends and expansions

The initial peak of hydropower in the market was early 1950s, followed by a leveling off and peaking once again in 1970s, yet much earlier in Norway between 1970-1974.²⁰ Due to hydropower‘s economic feasibility, investment in Many experts consider hydropower an international business as more projects in developing countries are now financed by foreign international companies.²¹ The market potential for hydropower globally has resulted in designing of environmentally viable turbines by many manufacturers.¹⁰ Hydropower market has been expanding and gaining popularity over time and by 2002, environmentally friendly turbines were already being tested.¹⁰ For future hydropower development, the estimated annual investment for dam construction is 220 billion dollars which does not include operation costs and returns.²¹

2.2.3 Economic effects of hydropower

Hydropower has several economic benefits like cheaper electricity provision and employment opportunities for revenue generation as it also brings regional cooperation, resource management and supports social, environmental and economic issues.²² The environmental impacts of hydropower have effects on the economic aspects where over time more investment is made to cater for environmental compliance which began in 1996 where 63.5 million dollars were used to mostly take care of fish passage.⁴ Laos, Vietnam and Cambodia use hydropower to address unemployment, high energy demand and exportation for revenue growth and lowering electricity price by encouraging growth of small enterprise especially in Cambodia.¹⁵ Employment creation comes from both end of direct opportunities like in material transportation and industrial employment.²²

Despite hydropower’s contribution to economic growth, it has negative effects on society and environment which has been recognized by the hydropower industry and plans to have turbine designs that favor the environment, technology and economy have been put in place.²^,¹⁵.

Another point is that hydropower dams are systems of critical infrastructure that need constant safety management during operational cycle periods. Thus, by increasing hydrological variability and the amount of precipitation due to climate change, previous design assumptions and failure risks could be potentially changed, unless reevaluated. Qualitative modeling proves that changes which originate from flood magnitudes play a big role in overtopping, as well as structural stress. What this means is that periodic reassessment of design flood standards must be accounted for, as proven by the study case for the Spanish Santa Teresa, located in the upper part of the Tormes River.²³ Safety management in the modern day relies on systematic risk assessment methodologies, among which are probabilistic risk assessment (PRA), fault tree analysis (FTA), and failure mode and effects analysis (FMEA). With the help of such approaches, operators are able to foresee failure mechanisms, observe likelihood and consequences, but also prioritize certain mitigation investments. In other words, frameworks based on being informed about risks can help improve transparency, supporting decision-making in the case of, for example, aging infrastructure. This would prove useful, for instance, in China, where difficulties and opportunities coexist to connect dam safety standard to the dam risk management system.²⁴

Constant monitoring of the structure can also be effective to detect early abnormal behavior. Integrating monitoring systems, such as combining deformation, seepage and structural response data, makes safety evaluations more reliable and allows maintenance before certain critical thresholds are reached. Catastrophic consequences occur when disaster strikes, an example being the 2018 failure of a subsidiary dam at the Xe-Pian Xe-Namnoy hydropower project in Laos. As a result, about 13,000 individuals were stranded and over 6000 residents were displaced, in the aftermath of the rapid-onset flooding.²⁵ If such a catastrophe is to be avoided, it is essential to utilize emergency preparedness, such as qualitative dam-breach in great storm cases, providing mapping for downstream inundation. Emergency Action Plans (EAPs) should be informed, including notification protocols and evacuation procedures. One idea is to run regular drills and have coordination with local authorities, communicating with affected communities to provide trust. Therefore, robust dam safety serves as fundamental to hydropower development.²⁶

2.2.4 Transboundary water governance for shared economic development

Countries sharing water resources (from rivers, basins or lakes) often need to set coordination or cooperation frameworks for the exploitation of such resources for the management of activities such as hydropower generation, irrigation or even general water supply to nearby communities. This allows a fair and balanced exploitation of the water resources to ultimately aid economic development.

An example of the importance of transboundary water governance occurs in The Mekong river basin, which is a typical example of economic integration preceding institutional integration. Similar to Europe, the Greater Mekong Region states (Cambodia, China, Thailand, Myanmar, Vietnam and Laos) share the commonalities of deep and profound economic, historic and cultural ties together with a desire, fueled by the past trauma of wars, to turn the battlefields into a common market place. While cross-border, transnational trade and economic cooperation burgeoned, a clear deficiency in the region became evident: the lack of a strong Regional Coordination Mechanism (RCM) for water management has limited the ability of the Greater Mekong states to utilize the river for hydropower, agriculture, and other purposes in an equitable and environmentally sound manner.²⁷

Since 2015, the Lower Mekong Region has been going through an extreme drought period characterized by reduced flow in rivers and less than average precipitation.The drought has tested pre-existing regional water governance mechanisms like the MRC, the Mekong River Commission. Meanwhile, development plans for building more hydropower dams along the Mekong river are causing increasing concern among environmentalists and local activist groups. However, the MRC, the one of the institutional bodies that is tasked with overseeing project development plans has been unsuccessful in exerting true authority over the project approval process, due to limited power to impose restrictions or bans on large-scale, potentially harmful infrastructure projects.²⁷

2.2.5 Digitalization in hydropower

Hydropower digitalization enables comprehensive smart monitoring through the strategic deployment of IoT sensors and advanced data acquisition systems. These technologies continuously gather real-time operational data across the hydropower facility. Subsequent big data analytics transform this raw data into actionable insights, facilitating predictive maintenance algorithms and significantly enhancing the efficiency and reliability of equipment management, thereby reducing downtime and operational costs.

A cornerstone application involves the development and utilization of digital twin models. These sophisticated virtual replicas of physical hydropower plants integrate real-time sensor data with historical performance metrics. This integration allows for accurate simulation of operational scenarios, enabling critical functions such as predictive equipment health assessment, optimized remote maintenance planning, and dynamic, real-time energy dispatch optimization, ultimately maximizing plant performance and lifespan.²⁸ A digital twin model for hydropower plants leverages massive data from modern power systems to digitally represent physical entities, events, and their interrelationships, thereby enabling large-scale data fusion and mining. To address the complexity and nonlinearity of power systems, a data-driven framework for model construction and application is usually proposed.²⁸

2.2.6 Financing hydropower

The financing of a hydropower project typically involves a mix of actors and financial instruments, which can be combined in various ways. All financial packages are a mixture of equity and debt in some combination, but there is no single financial structure or mix of actors universally applicable to all projects. Large hydropower projects are generally financed using project finance. Project finance (or limited recourse finance) refers to a financing mechanism where the project itself, rather than the assets of the wider company owner, serves as collateral. This is only possible when the lender can easily step into the borrower’s shoes and continue the project in the case of the borrower’s default.²⁹ To create such a set-up, several watertight arrangements detailing the duties and obligations of each party in various ‘what if’ scenarios – such as the concession and power purchase agreements – need to be in place for the construction period as well as for the operational phase, particularly during the debt service period. All required licenses and permits, insurance policies and other important contracts must be drawn up in such a way that the lender has suitable redress or, in an extreme case, can take over the project in the event of default.

The most widely used financing instruments may be classified broadly into five categories as follows:²⁹

• Equity finance (private or public);
• Commercial lending;
• Concessionary finance;
• Credit enhancement facilities (guarantees);
• Export credit agencies.

Equity finance involves investing funds to construct a hydropower project in exchange for a share of ownership and thus a share of any future profits. Equity investors are prepared to assume some risk in return for higher rewards than lenders, making equity investment more expensive than debt.

3 Ecological performance

Notably, in the mid-2010s, hydropower accounted for roughly two-thirds to three-quarters of global renewable electricity generation, meaning it actually made up most of the renewable power output rather than total electricity generation. As a result, this reflects its dominant role among renewables at that time. For instance, hydropower produced about 61% of renewable power in 2019, referring to the renewable subset, rather than the entire electricity mix.³⁰ With the growing demand for electricity, construction of dams with five times the current capacity is crucial in providing about half the projected demand by 2040.²¹ Developing hydropower was technically viable since the 1970s where the industry shifted to developing countries and put up huge hydropower projects.²¹^,³¹ Despite the importance of hydropower, these developments have ecological impacts like deforestation, destruction of rivers‘ ecology, greenhouse effects, population displacement, and loss of aquatic lives.³¹

3.1 Ecological performance in comparison to other alternatives

3.1.1 Environmental performance

Despite hydropower renewable energy technology being one the lead, it has adverse environmental effects like river fragmentation resulting to the restriction of organisms’ movement, change of water current flow and temperature profile, altering the quality of water and consequently affecting agriculture, deforestation, and flooding at low altitude areas.²¹ With the construction of large dams, hydropower affects the ecosystem which might cause the migration of aquatic life, wildlife and human beings.¹³^,²¹

Sedimentation has worldwide effects for reservoirs, which both causes a progressive loss in terms of storage capacity and affects dam safety, due to its interfering with the safe operation of dam outlets. The rate of sedimentation varies globally and depends mainly on the reservoir and catchment characteristics, with the average rate estimated in the range of 0.5 to 1%.³² Various methods to manage sedimentation can be implemented should improve environmental sustainability and sustain economic performance in the long term.

One solution consists of applying hydraulic flushing. Modelling research shows that successful flushing operations depend on both careful hydraulic design and numerical modelling, aiming to predict the capacity of the sediment transport, optimizing the timing of gate operation in the process. It is possible that a poorly designed flushing strategy might cause excessive sediment downstream, but optimized hydraulic modelling can improve sediment evacuation performance.³³ Another idea, mainly implemented in Switzerland, Japan and Taiwan, focuses on the use of sediment bypass tunnels (SBTs), which aim to divert flood flows heavy in sediment around the reservoir. This should keep the downstream sediment continuous, at the same time lowering the chance of in-reservoir deposition. Numerical modelling proves that the efficiency of this method has several factors influencing it, such as operational timing, discharge conditions, and tunnel configuration, which can significantly reduce the accumulation of sediment, thus prolonging the service life of the reservoir. In fact, SBT operation is highly effective in reducing the amount of sedimentation by 89%, when compared to the no SBT operation. It should be mentioned that this solution is of interest to countries in the Asia-Pacific region, where sedimentation issues are severe.³²

Greenhouse effect of hydropower was considered a challenge in 1990s and later in 1993 traces of methane gas emitted by reservoirs and dams were noted.³⁴ While countries with existing hydropower technology experience these ecological adversities, prioritizing dam construction on already fragmented rivers, as opposed to free-flowing ones, can reduce these effects since hydropower remains a vital clean energy source. Hydropower is not considered a truly zero‑carbon source of electricity, but rather a low‑carbon one. In fact, lifecycle greenhouse gas emissions usually fall in the range of tens of grams of CO₂‑equivalent per kilowatt‑hour generated, which can vary depending on the site and reservoir conditions. Examples of emission sources are construction, operation, and from methane and carbon dioxide released by reservoirs. Despite this, the overall lifecycle emissions remain much lower than those from fossil‑fuel‑based generation.³⁵

3.1.2 Available resources

Hydropower relies on the availability of water and it is largely affected by dry seasons as it performs really well during seasons with high precipitation and reliable water flow.¹³ Decision-makers often evaluate this resource from the economic perspective as opposed to the ecological impact this will have.¹³^,¹⁵ With the different ecological impacts of renewable energy sources, resource distribution differs all over the world with an example of Africa that has significant energy potential ranging from hydropower capacity, solar irradiation, and wind resource.³⁶ Africa’s solar irradiation is one average higher when compared to other regions of the world, with Namibia for example having as high as 2500 kWh/m2 of annual potential, although this has not been fully exploited yet.³⁷ Wind resource potential is reliable in the Southern, Northern and Eastern African regions whereas geothermal along the Great Rift Valley of Kenya, Ethiopia and Uganda.³⁷ On the other hand, Ethiopia and Congo hold high potential in hydropower: Ethiopia for instance, has currently an installed hydroelectric capacity of 4,064 MW, plus 9,506 MW of planned capacity. Congo, heavily relies on the Grand Inga Hydropower project, currently being designed to achieve up to 42,000 MW (in a phased-development approach) until 2063, according to the African Union’s 2063 Agenda for Flagship projects.³⁸^,³⁹

3.2 Evolution of hydropower ecological impact

3.2.1 Aquatic ecosystem

The aquatic ecosystem has been affected by unfavorable conditions caused by the venture into hydropower where dams influence water current flow thus oxygen level and temperature.⁴⁰ Reservoirs often cause warm temperatures which reduce the concentration of oxygen that does not support the aquatic community.¹⁵ The unconducive environment affects fish migration, reproduction, and inadequate habitat as seen in Cambodia following dam construction that also affected the community that depend on fishing for income.¹⁵^,⁴¹ Hydropower has affected the water quality through emissions which risks the existence of aquatic life together with the community depending on it.¹⁵ Dam construction in areas like Congo, Amazon, and Mekong which are rich in biodiversity, pose a risk to high-value to fish.⁴² Changes in the water flow disrupts the whole ecosystem by altering the water quality and favoring algae growth.⁴³^,⁴⁴ Hydropower development has negative ecological effects like decreased fish population, algae growth, and deforestation, calling for sustainable measures in plan and implementation to reduce these impacts.⁴¹ However, efforts to control erosion and aquatic life depending on the area of reservoir construction are being made in the hydropower industry to maintain water level for habitats conservation.⁴¹

To mitigate both ecological fragmentation and biodiversity loss, a significant point to consider is the integration of environmental flow regimes and fish passage technologies into the design and operation of hydropower. Environmental flows are the quantity, timing and quality of water flows which are needed in order to sustain freshwater ecosystems. They help mitigate downstream habitats, sediment transport, as well as migratory pathways, when they are incorporated into licensing of dams and rules of operation. In addition, adaptive environmental flow management can prove to be e source of reduction in terms of ecological degradation, at the same time maintaining the efficiency of energy generation.⁴⁵

There are several solutions to improve the ability of migratory species to navigate dams. Examples cover nature-like fishways, technical fish ladders, fish lifts, and downstream bypass systems. There is an overall low efficiency of passage facilities, which should lead the path to improvements to sufficiently mitigate habitat fragmentation. This should be done both for the complete fish community and across a range of environmental condition.⁴⁶ Moreover, certain advancements in the area of fish-friendly turbine design, for example minimum gap runners and optimized blade geometry, are factors that count towards the reduction of mortality and injury. For instance, aiming downstream migrants, a test was conducted at a hydropower plant located in Freedom, Maine, where groups of 140-170 fish belonging to the Alewife Alosa pseudoharengus species were released into the Restoration Hydro Turbine (RHT), and then recaptured with the help of a trap at the turbine outlet. The experiment resulted in 48-hour survival rates of 98% for the juvenile alewife during these controlled tests of passage, thus showing the positive effect and potential of carefully engineered turbines.⁴⁷ These are the kind of innovations into hydropower planning that would improve sustainability in the long term, being beneficial for the purpose of biodiversity conservation.

3.2.2 Climate change

Hydropower reservoirs contribute to climate change through release of greenhouse gases, particularly carbon dioxide and methane whose intensity vary with location.²¹ Future dams in tropical areas are likely to have higher initial emissions due to high decomposition rate of submerged organic matter releasing these greenhouse gases.¹⁹^,²¹^,³⁴ These emissions that are still lower than fossil fuels happen mostly during construction although studies have suggested that emissions may be more than those of fossil fuels for bigger reservoirs.¹⁹^,³⁴ However, on average hydropower releases about thirty times less of these greenhouse gases compared to coal with hydropower emitting averagely 21g CO₂ eq/kWh that is less as compared to biomass, geothermal, solar, gas, and coal.¹⁹^,²¹ According to data from the National Renewable Laboratories of the United States of America (NREL), after verifying data from the lifecycle analysis assessments of more than 3,000 studies for different generation technologies, the presented (in Table 1) average lifecycle greenhouse gas emissions per technology were found Hydropower generation however is vulnerable to climate change as precipitation changes and drought effects water availability.¹³^,¹⁵ Despite these effects, hydropower plays a role in the reduction of emissions associated with fossil fuel and grid stabilization hence a balance must be made between its importance and impacts on the environment.²¹

Another important point is that hydropower generation depends on river discharge and reservoir inflows, which causes it, in turn, to become sensitive to variability introduced by the climate. Global modelling studies show that climate change will modify the patterns of precipitation, runoff regimes, snowmelt timing, but also how often or rarely drought and flooding occur. Global hydropower production could change by -6 to +6% by the mid-21st century, with strong regional disparities occurring. For instance, in some high-latitude regions there might be better runoff and greater generation potential, while many areas in Southern Europe, the US and regions of Africa could potentially face a decline in hydropower output due to a lack of water availability.⁴⁸ Additionally, regions where a reduced output occurs should focus on a higher investment in alternative generation capacity, since supply security must be kept constant. Examples of ideas include robust spillway capacity for extreme flooding cases, hydrological modelling having scenarios as basis, and adaptive reservoir operating rules.⁴⁹ More recent assessments showcase that power generation infrastructure is, in fact, quite vulnerable to changes in water resources more specifically risking electricity production in drought scenarios. Several adaptation strategies should be taken into account, for example improved reservoir management, diversification of water sources, as well as flexible operational rules, as these factors could result into a more reliable overall system.⁵⁰

Table 1: Average life cycle green gas emissions for selected generation technologies. Adapted from⁵¹

Generation Technology Average Life Cycle Green Gas Emissions [g CO₂ / kWh] Biomass

Solar Photovoltaic

Hydropower

Wind

Natural Gas

486

Generation Technology Average Life Cycle Green Gas Emissions [g CO₂ / kWh] Oil

840

Coal

1001

3.2.3 Human beings

Although hydropower affects human beings positively through employment and water supply, it has adverse effects on the community like loss of life and property during floods, displacement, and increased exposure to natural disasters.¹⁵^,²¹ For instance, as from research study in Cambodia, people settled along Se San river experienced severe food insecurity, loss of income, loss of property and life after floods during Yali Fall test.¹⁵ The effects of hydropower to water quality cause health problems to the community and limits access to clean water.⁴¹ When dams are constructed, indigenous communities displaced from their land lose touch with their traditional resources leading to social inequalities.²¹ Due to nontransparent dam construction approvals and environmental insights, especially in tropical areas, hydropower affects the ecosystem that in turn affects agriculture and jobs.⁴² Through human interventions in planning and studies, modern efforts on water improvement techniques to ensure reduced negative impacts of hydropower to the community have explored.¹³

In summary, hydropower has ecological impacts ranging from deforestation, destruction of subsistence resources, destruction of the aquatic ecosystem, emission of greenhouse gases and displacement of people.¹⁵^,²¹ To prevent these negative impacts, proper planning and technological advancement is crucial for the conservation of aquatic species and widespread ecological damage, and to ensure the development of hydropower for sustainable energy goals to replace fossil fuels without affecting the ecosystem and social well-being.²²^,⁴²

3.2.4 Water and food energy nexus: the case of the Zambezi River Basin

The Zambezi River Basin is a vital resource for southern Africa, providing water for food production and energy generation. Hydropower generation has historically been the largest economic use of water in the basin, with an average annual generation of 30 terawatt hour (TWh). Assuming a value of 60 $/MWh, this corresponds to 1,800 million $/year. Hydropower has also been a major driver of regional integration, with the establishment of the Zambezi River Authority (ZRA) and the Southern African Power Pool (SAPP).⁵²

The second largest economic use of water in the basin is irrigated agriculture, which is concentrated in the Lower and Middle Zambezi. Despite the large evaporation losses and irrigation consumption, the basin is still largely open, with renewable water resources exceeding current demands, except for the Kafue tributary in Zambia. Looking ahead, the Zambezi River Basin is expected to see significant development of its water resources, with plans to double the irrigated area and add more than 2,000 MW of power to the electrical grid. This development will increase the interconnectedness of water, food production, and energy generation, known as the water-energy-food (WEF) nexus. Changes in one sector will have implications for the others. For example, increased agricultural production will require more water and energy for irrigation and processing. Similarly, the production of biofuels, which is a competing use of water and land, could impact food production and energy generation.

Over the last years, the discourse on the WEF nexus has gained attention worldwide (Marsh and Sharma 2007). One of the first works on the nexus is a 2004 World Bank report on the WEF nexus in Central Asia , which was examined in the context of regional cooperation among the riparian countries of the Syr Darya River where the mismatch between upstream power and downstream irrigation demands was (and still is) a source of tension. In 2006, the U.S. Department of Energy released a report for the United States Congress on the interdependence between water and energy in the country. More recently, the United Nations chose to dedicate the World Water Development Report to the WEF nexus (WWAP 2014). This report provides a comprehensive overview of the concept with examples taken from all continents. Despite being increasingly studied, there is no clear understanding yet on how the WEF concept can be operationalized to ensure water, energy and food security. One of the key issues comes from the fact that energy and water policies are developed separately, largely in isolation from one another. The result is a lack of policy integration, which makes it difficult to identify and then manage the links between sectors.⁵²

4 Social impact

The acceptance of a hydropower project largely depends on the active participation of three key stakeholders: project developers, government, and local communities. When each party effectively fulfills its respective responsibilities, local communities are very likely to support hydropower development in their region. Ensuring early engagement, awareness campaigns, and inclusive decision-making processes that allow local communities to contribute to project planning can significantly enhance public acceptance and minimize resistance to the project.⁵³ Hydropower plants are generally considered as economic and sustainable source of energy. While hydropower project development brings about many benefits, such as clean electricity, economic growth, employment, and water management, it also has great social and environmental consequences, affecting people’s lives, causing displacement, bridge to indigenous human rights, and community health.⁵⁴^,⁵⁵^,⁵⁶ Castro-Diaz et al concluded that natural, social, human and financial capital are negatively affected by dam construction while physical capital is mostly affected positively because construction companies benefit directly from these projects such as roads, hospitals and schools.⁵⁷ This section explores the positive and negative social impacts of hydropower development in different communities, based on real-world case studies and research evidence.

Figure 5 represents a simplified systems diagram on the interconnected topic of social impact pathways. On the one hand, positive social impacts include employment, electrification, and water security, which are all potential ways to develop hydropower infrastructure. On the other hand, negative impacts, such as displacement and health risks, pinpoint the disadvantages brought by large-scale projects. Several mitigation measures, for example, benefit-sharing, ESIA, and FPIC, are all methods that have big roles in shaping the outcome.

*Figure 5: Social Impact of Hydropower Development.*

4.1 Positive social impacts of hydropower development

4.1.1 Economic growth and job creation

Hydropower projects generate employment during construction, operation, and maintenance. These projects bring positive impacts on capacity and skills development within the organization developing the initiative and also generates new revenue streams that can be used to support social facilities and initiatives.⁵⁵ Hiring local labor force for the construction and maintenance of a hydropower plant and supporting the community by returning profits to the community is one of the ways to reduce the concerns of installing a hydropower plant in a community.⁵³ According to the World Bank’s Energy Sector Management Assistance Program (ESMAP), hydropower sector has provided about 2.36 million jobs globally. It was noted that 64% of these jobs were associated with manufacturing while 30% were associated with construction and installation services. The remaining 6% were under operation and maintenance (O&M) services. Topping the list of job creators in the hydropower sector is China with about 37% contribution to the global hydropower Job market and followed by India with 18%.

These Jobs promote on-the-job learning; formal education opportunities and skills development.⁵⁶ For example, the Kariba and Grand Coulee employed about 10,000 and 15,000 workers respectively.⁵⁸ Additionally, increased electricity availability stimulates industrial development, promoting long-term economic stability. Many hydropower companies strive to achieve favorable Environmental, Social, and Governance ratings by fostering a positive corporate image through long-term community benefits. This often involves investing in infrastructure improvements, such as healthcare, education, transportation, tourism and sanitation facilities, as well as ensuring sustainable water resource management. Additionally, companies may assess how reservoirs can be utilized for broader community needs, including irrigation and navigation, to enhance local livelihoods and promote social acceptance of hydropower projects.⁵⁹^,⁵⁶

4.1.2 Electrification and improved living standards

Renewables such as Wind, Solar and Hydro are necessary for developing sustainable power generation for communities with low access to Power. Small off-grid hydroelectric installations can effectively electrify rural communities which typically have lower environmental and social impacts.⁶⁰ One of the key advantages of hydropower is its ability to provide stable electricity access to rural and urban areas. A survey conducted by Rojanamon et. al for the Nan province of Thailand shows that a great number of people in the community support a hydropower project in their village because they are not satisfied with the standard of living in their community. The community believes that a hydro project would help develop their community and raise the standard of living in their community.⁵³

4.1.3 Water security and flood control

Hydropower reservoirs contribute to water storage and regulation, benefiting agriculture and reducing the risk of droughts and floods. Hydropower scheme is also called a multi-purpose scheme as it is not limited to only generation of electricity. It can also be used in flood control, where water can be temporarily stored during peak periods of flood and released when maximum flow has passed.⁶¹ The Aswan High Dam in Egypt has enhanced water security for many people living around the structure, allowing all year-round irrigation and protecting communities from the Nile’s seasonal flooding.⁵⁸

4.2 Negative social impacts of hydropower development

4.2.1 Displacement and resettlement

One of the most significant negative impacts of hydropower projects is the forced displacement of individuals from their communities. Large dams lead to loss of Land and involuntary resettlement of locals. An example is the Three Gorges Dam located in China which is the largest dam in the world, it caused around 1.3 million people to be displaced, this dam has displaced the largest number of people so far resulting in economic hardships, loss of cultural heritage, and social disintegration.⁵⁷

Many of the displaced individuals are not resettled or rehabilitated. Compensation and relocation efforts fall short of fully restoring the livelihood of affected communities, are often delayed, and even when offered on time, have in many cases failed to recover the lost means of living.⁶² The World Commission on Dams case study gives many examples of failed and delayed compensation and resettlement. An example is the Ubol Ratana dam project in the northeast of Thailand, where about 15,000 farming families were left without lands, as a result of failed resettlement schemes between 1960 and 1970.⁵⁸

Environmental and Social Impact Assessment (ESIA) is an essential tool in hydropower development, which has the purpose of identifying, predicting and mitigating any environmental and social impacts that could occur before the approval of the project. ESIA provides a framework specifically structured for observing biophysical effects, social disruption, economic consequences, but also cumulative impacts. This leads to modifications in the project being avoided to reduce harm, supporting transparency and improving the extent of accountability.⁶³ In order for ESIA to be effective, aspects beyond impact identification must be considered, such as stakeholder participation and increased attention to human rights. In projects affecting indigenous people, the principle of Free, Prior and Informed Consent (FPIC) has become a standard that makes sure communities are properly informed, consulted and have the ability to participate in decisions influencing their lands, livelihoods, and cultural heritage. FPIC increases, thus, procedural justice, at the same time reducing the probability of social conflict occurring.⁶⁴

Mechanisms such as structured benefit sharing are more and more recognized as ways to improve equity and increase community well-being in hydropower development that goes beyond one-time compensation. Financial and non-financial benefits in well-designed frameworks include revenue transfers, community development funds, preferential tariffs, or community-determined infrastructure advancements, being distributed over a span of time to affected populations rather than only consisting of initial resettlement package.⁶⁵ A concrete example is the Sirikit Dam hydropower watershed in Northern Thailand, which had a framework governed by local communities, such as community development funds and participatory decision-making on benefit allocation. This encourages local priority setting and shared ownership of benefits, being more sustainable in the long run.⁶⁶ Other case studies in hydropower-affected regions show the challenges and opportunities in benefit sharing, for instance Yunnan’s Nujiang Prefecture in China. This is where barriers to improve rural livelihoods include heavy tax burdens, low compensation standards and unequal distribution of benefits, resulting in the proposition to look for local community goals when accounting for project outcomes.⁶⁷ Ideally, benefit sharing should be thought of as a ‘sustainability intervention’, leading to long-term positive impacts on people affected by the project, therefore going well beyond compensation for lost assets.⁶⁸

4.2.2 Impact on indigenous communities

Hydropower projects threaten indigenous populations by altering their traditional lands, destroying farms and forests, changing river flows, fishing practices and limit access to natural resources.⁵⁷^,⁶⁹^,⁷⁰ Introduction of Hydropower construction in communities could lead to loss of income for the individuals in the community, especially if their major source of income is fishing or water related and would cause a significant change of their way of life. Building large reservoirs can also result in destruction of some major amenities like roads, railways and communication lines in the community and if not replaced will limit the local population.⁶¹ The Maraba Dam project of Brazil was estimated to affect over 40,000 indigenous people in the Amazon and affected the fishing trade of the community. Tropical dams could also emit a great amount of greenhouse gases including carbon dioxide and methane, which contribute to global warming and affect the environment of the communities closest to the dams.⁶⁹

4.2.3 Health and waterborne diseases

Hydropower reservoirs create stagnant water bodies, especially in tropical areas, which can increase the spread of insect-based diseases such as malaria, yellow fever and Schistosomiasis. It also favors the emergence of water related diseases such as dysentery and cholera.⁶¹ Dams and reservoirs serve as breeding habitats for aquatic insects and snails that transmit diseases, reservoirs also attract large number of people for fishing or other related water economic activities. Lastly, dams displace individuals from flooded zones, which affects and influences transmission of tropical diseases.⁷¹ In Ghana, the Volta River Project led to a rise in schistosomiasis cases due to the expansion of slow-moving waters.⁷² Additionally, the alteration of natural river flows can affect water quality, leading to increased contamination risks.⁶¹

5 Political and legal aspects

Development of hydropower is not only affected by social acceptance, technological advancement and economic benefits but also affected by political/government and Legal regulations. Government plays a critical role in shaping hydropower policies, ensuring that project owners comply with environmental and social standards, and promote sustainable energy transitions. The legal aspect varies depending on countries, as different countries have different views on the effects of hydropower on their people, economy and environment. While some countries tend to accept and create policies that would foster the development of hydropower plants, others enforce laws that limit the expansion of hydropower in their countries.⁵⁸ For example, policies enacted by the USA President in the 1930s, Herbert Hoover, influenced the construction of several multipurpose projects such as Hoover and Grand Coulee dams which accounted for about 40% of the country’s electricity generation by 1940.⁵⁹ Policy, legal and regulatory frameworks have been in existence worldwide before the 1970s particularly for social and environmental issues. However, many countries updated these policies and regulatory frameworks to give stronger emphasis also to public participation, efficiency and cost recovery.⁵⁸ Governments are key investors in hydropower projects. Governments worldwide have implemented laws, incentives, and restrictions to shape hydropower development while addressing environmental and social concerns.⁷³ This section discusses policies and regulations that have influenced hydropower development in different countries.

5.1 International policies

The Kyoto protocol of 1998 and Paris Agreement of 2015 organized by the United Nations (UN) encourages countries to limit and reduce Carbon dioxide emissions by implementing or elaborating policies enhancing energy efficiencies, research on and promotion, development and increased use of new and renewable forms of energy which includes hydropower technology.⁷⁴^,⁷⁵

Under the Paris Agreement for example, the signatory parties (countries) are required to submit their Nationally Determined Contributions (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC) and to implement policies with the aim of achieving their stated objectives (pledges), towards a Net-Zero state for 2050

The process is dynamic; it requires parties to update their NDCs every five years in a progressive manner to reflect the highest possible ambition. The first round of NDCs, submitted by 191 countries, covers more than 90% of global energy related (Hydropower included) and industrial process CO₂ emissions.⁷⁶

5.2 Case study of Turkey

Small Hydropower is regarded as one of the most stable and economically clean renewable energy alternatives in Turkey, and to increase the share of renewable energy in its energy sector, laws and regulations were developed and published. This includes the Electricity Market Law of March 2001 which encouraged private investments to build and operate hydropower plants and the Renewable Energy Law of 2005 which sets a price of 5.5€/kWh to facilitate more involvement of private investors.⁷⁷ Turkish laws have only two legislations that is are relevant to renewable energy sources. The first is is the Electricity Market Licensing regulation, and the second is the Law on Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy. The main aim of the second law is to increase the use of renewable energy for electricity generation, which includes Hydropower.⁷⁸

5.3 Case study of China

China has employed different policies to facilitate rapid hydropower development. Firstly, national-level development and energy policies, such as the ‘Develop the West Campaign’ and the ‘West-East Electricity Transfer Project’ which fosters the use of local natural resources including rivers to elevate economic growth. Secondly, since mid-1990s, China’s state-owned power companies had started to aggressively investigate expansion policies, policies that mandated companies to develop Corporate Identities and pursue profit.

Moreover, the Chinese government enacted the Renewable Energy Law in 2005 to address international pressure to reduce greenhouse gas emissions, this law marked hydropower as the center piece in China’s clean, renewable energy development Blueprint.⁷⁹ In China, different agencies such as the state council, national Energy Administration (NEA), the national development and reform commission (NDRC), Ministry of Finance and Ministry of Environmental Protection (MOEP) have formulated policies for development of hydropower in China since 2012. Policies such as the Energy Development Plan, which emphasize the importance of hydropower development, promoting development of different types of hydropower stations, were introduced by the State Council, promoting the overall planning of hydropower development.

Furthermore, policies supporting the transfer of approval rights of hydropower construction to the Local government were established. In 2013 China’s Western Development Program was issued which promoted the building of large Hydropower bases and hastened the construction of the Hydropower base in West-East electricity transmission project. Between 2013 and 2014, other policies were introduced by NEA and NDRC to further solidify the construction and implementation of hydropower stations, also policies affecting the on- grid price formation mechanism of pumped storage power stations were formulated to ease and encourage construction of pumped storage hydropower stations.⁸⁰

5.4 Case study of HKH countries

Hussain, A. et al. describes the different policies that has shaped hydropower development in the four Hindu Kush Himalayan (HKH) countries which includes Bangladesh, India, Nepal and Pakistan. Political boundaries in the shape of countries have shaped the management and utilization of hydro-resources by implementing different policies and strategies. Bangladesh introduced the Private Sector power Generation Policy and National Energy policy in 1996 to foster private investment and economic growth. Renewable Energy Policy was also established in 2008 to increase and promote use of Renewable Energy sources which includes Hydropower. India established various policies to foster Renewable Energy sector in general which includes Electricity Act 2003, National Electricity Policy 2005, Tariff policy 2006, Rural Electrification Policy 2006 and the Hydro Power Policy in 2008 to promote Hydropower as an action towards mitigating Climate change. Nepal’s Energy policies are administered by the Ministry of Energy, the first hydropower development Policy was established in 1992, this policy promoted private investments in hydropower development. The Hydropower Policy was also established in 2001 which generates electricity at low cost by using the country’s water resources and developing hydropower as an exportable commodity. Subsequently, Renewable Energy policies 2006 and 2009, Renewable Energy Subsidy Delivery Mechanism 2010 and Renewable Energy Subsidy Policy 2013 were formulated to expand the power sector in sustainable and environmentally friendly manner. Finally, Pakistan’s Ministry of Water and Power is responsible for implementing all energy-related policies. The national power policies of 1995, 1998, 2002, 2013 and 2018 focused on improving use of local resources like water for power generation and encouraging private investment. The 2025 policy is aimed at completing two major hydel Dam projects to eliminate its electricity supply-demand gap and cater to growing future demand.⁸¹

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