Environmental and social impacts of small-scale hydropower:

Issues and Challenges

Glenn Morgan (LCSEN)World Bank Water WeekFebruary 18, 2009

Presentation objectives

Review the nature and scale of environmental and social impacts associated with small-scale hydropowerIdentify emerging issues with regard to small scale hydro especially for run-of-river and IPP projectsRecommend good practices when preparing, appraising and supervising such projects

Why focus on small-scale hydro?

Small-scale hydro may be a desirable and growth segment of the energy generation among some Bank clients (e.g. Honduras)Projects are assumed to represent *green* or *low-impact* energy alternatives

– Lower or more acceptable environmental and social coststhan alternative fossil-fuel burning projects

– Environmental and social benefits outweigh the environmental and social costs

– Scale of works increases potential sustainability by reducing or eliminating risks normally associated with large scale hydro

Projects can be brought on-line more rapidly and expect to benefit from a streamlined review and processing requirements

What is small scale?

Definitions are somewhat arbitrary but generally considered to be up to 30 MW but may be as high as high as 50 MWProjects do not trigger the ICOLD criteria for large dams (15 m. / 1 million cum. storage etc.)Intended to supplement the existing grid and do not involve long incremental transmission linesThey are typically run-of-river design and do not require reservoir storage capacityTypically do not involve large or complex resettlement or land acquisition

What is run-of-river?

Typical configuration of a run-of-river project

Observations about small hydro

In general, these projects function well and can provide electricity with low impacts when properly designed and managedHowever, there are some systemic issues which may occur even in the smallest hydro projectsThese issues - if not addressed - could create risks for the sustainability of the project as well as reputational or other political risksCompanies are carrying out their responsibilities but face risks with respect to capacity and resources especially in dealing with host communities

Social and environmental impacts in small scale projects

At and above the dams or barriersBelow the dam – especially in the diversion / dewatered river reachesFrom associated infrastructure – access roads, borrow pits and transmission linesOperational impacts affecting timing and volumes of river flowCumulative impacts with multiple dams and other projects in the same watershedLand acquisition or physical resettlementLand and resource tenure including access to water resourcesCommunity development, livelihood support or expectations of sharing in benefits

La Esperanza - Project Description

13.5 MW IPP developed in three phasesPhase 1A 500 KW; Phase 1B 1 MW; Phase 2 12 MWProject involves construction of 4 small dams; 3 retention ponds; powerhouse; underground penstock; access roads; work camp site; project offices.Project has been operational (Phase 1A) since 2003Now considering a fourth phase further downstream

La Esperanza - Project Context

Located within the Intibuca River basin near towns of Intibuca and La Esperanza, HondurasArea of influence is sparsely settled with important existing environmental values. Populated by Lenca peopleHost communities experience high incidence of povertyProject situated on privately owned company landsEnvironmental license and ERPA specifies E&S requirements but government capacity to monitor or enforce is limited

La Esperanza - Project E&S Issues

Works undertaken in remote but sensitive location10 km of the Intibuca river’s upper catchmentdewatered at various times of the yearMitigation plan heavily oriented to provision of community services and reforestationLimited characterization of construction impacts

La Esperanza - Project E&S Issues

Project received environmental license and was required to develop EMP as part of ERPA but specific commitments are not well understood by the community at largeNGO community is generally favorable towards the project but feel company lacks transparencyMonitoring of management plans by local authorities is weakRiparian flows and water quality are not monitoredWater use rights on tributary streams could become an important issue

Summary

Need to consider all impacts, especially construction related impacts of ancillary works such as roadsNeed for stakeholder involvement and improved communications. Specific requirements of EMP and CDP may not be well understood in the community at largeNeed to support capacity building of supporting agencies. Need to consider beyond the project counterpart. Local government units are often left to carry out monitoring and compliance tasks.Need for better coordination and dialogue. Project often require inter-agency coordination

Summary

Need to limit project E&S liabilities. Importance of developing clear agreements with specific annual work plans, budget resources and monitorable outcomes specified.Need to clarify the process requirements. Companies are often unclear as to what is required due to lack of legal framework, regulations, clarity of institutional roles and responsibilitiesDesire for efficient review process. Project developers desire more rapid and efficient licensing procedures

Summary

Project proponents, often small IPP, may not have sufficient experience or resources to successfully implement programsConstruction and operational delays may threaten a company’s financial viability and ability to meet E&S commitmentsEven small projects may face adverse local attitudes regarding transparency, communications, community development support. Managing community expectations can be difficult and challenging

Summary

Social and environmental context of anyproject is important. No two small hydroprojects are alikeInstalled capacity is generally a poor indicator of a project’s potential impactsSmall-scale and run-of-river does not necessarily mean *no* or even *low* impactProjects, though small to us, can be locallyimportant and can raise controversies which need to be managed