Responsible development of sustainable hydropower

Description Responsible development of hydropower fulfills sustainable development principles and is socially, environmentally and economically responsible, transparent and accountable.

What is the issue? The development of hydropower dams creates significant environmental and social impacts and loss of natural resources. It places increased pressure on already reduced forest cover and freshwater resources.

These impacts can be avoided or reduced and hydropower development can be made more sustainable with proper development planning, assessments, mitigation measures and conservation efforts.

If developed responsibly and sustainably, hydropower can provide great economic and social benefits with manageable environmental impacts.

Who is the seller? Developers of hydropower

Who is the buyer?Governments, businesses and domestic consumers

Steps towards
successful business model
  • Comprehensive and transparent energy needs assessments, energy production options assessments and environmental and social impact analysis;
  • Areas with critical natural assets and areas of high conservation value are protected;
  • A representative sample of free-flowing rivers and their ecosystem services is maintained;
  • Credible information is made publicly available to present the best options, locations, designs and operating rules;
  • Develop multi-stakeholder planning process (state and local government, local communities, operators, businesses, NGOs);
  • Follow internationally accepted best practices, standards and principles;
  • Create financing mechanisms (e.g. REDD+) which encourage conservation of the natural assets (e.g. forests) by the local community on lands provided to them in resettlement schemes or those living within watershed areas;
  • Establish programs to encourage environmental and socio-cultural protection, e.g. river heritage programs;
  • Systems to distribute economic returns fairly among stakeholders.
What can investors do? Adopt and enforce responsible financing mechanisms based on sustainable development criteria

What can the private sector do? Energy Suppliers
  • Ensure energy resources are developed responsibly and sustainably;
  • Invest in conservation and enrichment efforts in affected river basins;
  • Establish hydropower planning and development processes to help minimize social, cultural and environmental impacts;
  • Participatory development of watershed management plans.
What can consumers do?
  • Adopt and implement responsible business activities, which include sourcing and purchase of energy from sustainably managed sources;
  • Apply technology and management practices to prevent or mitigate pollution;
  • Adopt hiring policies that promote local community inclusion and capacity building;
  • Contribute to conservation of natural resources and ecosystem services which are shared both by the communities and the businesses, e.g. the protection of watersheds for water resource conservation.
What can governments do? National:
  • Comprehensive energy planning and development to identify needs and best options with respect to economic, environmental and social considerations;
  • Create incentives and enabling environments for businesses that undertake conservation and proper management of natural resource, e.g. green energy certification systems;
  • Require legal mechanisms and national project approval mechanisms which include cumulative impact assessments of development policies and plans;
  • Create financing mechanisms whereby a percentage of payments from large consumers of water, developers and downstream industrial users are put towards improving water quality and habitat restoration in the watershed.
  • Strict enforcement of environmental and social impact assessments prior to project development;
  • Create a framework or structure for multi-stakeholder and integrated water resources and land-use planning and management;
  • Design and establish sustainable income opportunities for communities (e.g. ecotourism areas and eco-villages).
Contribution to…
  • Securing natural capital: A share of revenues can be directed towards conservation of high conservation value and heritage areas. Hydropower is a viable renewable energy resource that can replace other more harmful energy production options. Multi-purpose reservoir use is possible to prevent loss of natural assets due to flood damage. Hydropower can be used in combination with other sources of renewable energy that provide intermittent supply (e.g. solar, wind power).
  • Poverty alleviation: Creates jobs, infrastructure and capacity; generates alternative revenues, and support for local community services (e.g. schools, hospitals and roads).
  • Economic growth: Responsible hydropower development can generate job opportunities, help build a qualified workforce, and mitigate losses from floods, secure natural resources such as water and energy.
  • Climate change mitigation/adaptation: Hydropower can reduce:
    1. The reliance on fossil fuels for energy production;
    2. Carbon footprint of an economy;
    3. The vulnerability of communities and economies to climate change induced water extremes (e.g. floods & droughts).