Energetica India - June 2020

HYDRO POWER Hydropower in 2019 and COVID-19 Widespread uncertainty and liquidity shortages have put financing and refinancing of some hydropower projects at risk. Greenfield development and critical modernisation projects have also been halted due to supply chain disruptions. In addition, proposed or existing government programmes aimed at supporting the sector have been postponed. The COVID-19 pandemic will reset so- ciety and the economy. There will be significant new approaches to global governance, economic development, energy systems, and environmental and social sustainability. While this is a time of great uncertain- ty, it is vitally important that economic stimulus packages not only maximise the short- term benefits of infrastructure investment, but also accelerate the tran- sition towards cleaner and lower-carbon technologies such as hydropower. Immediate Impacts on Hydropower The COVID-19 crisis is causing an up- heaval in energy markets and hydropow- er is not immune to these developments. Between late March and early April 2020, IHA’s took a survey of its mem- bers to find out how the coronavirus pandemic is affecting hydropower. Fifty respondents took part of which 60 per cent were heads of organisation or se- nior management. The survey, together with wider analysis conducted by IHA, shows the sector has been affected by the coronavirus in a variety of ways. Widespread uncertainty and liquidity shortages have put financing and refi - nancing of some hydropower projects at risk. Greenfield development and critical modernisation projects have also been halted due to supply chain disruptions. In addition, proposed or existing govern- ment programmesaimed at supporting the sector have been postponed. While operations have been less affect- ed due to the highlevel of automation found in modern facilities, significant falls in electricity demand and prices has had an impact. In some markets both demand and prices have contract- ed by up to20 per cent and remain ex- tremely volatile. It must be noted how- ever that those projects covered by long-term power purchase agreements have remained largely insulated from these impacts. All these developments have contribut- ed to falling confidence across the hy - dropower sector. IHA’s survey showed a more than a 20 per cent drop in confi - dence by survey respondents (from 77 per cent in 2018’s survey, to 56 per cent in March/ April 2020) on the question of whether their organisation’s hydropower revenues would grow over the next 1-3 years. Hydropower and The Global Recovery As the world’s single largest source of renewable electricity with unique stor- age and flexibility services to support the integration of variable renewables, hydropower can play an integral role in the recovery effort and the clean energy transition. Hydropower projects can safely supply clean water for agriculture, homes and business, and help to mitigate the im- pacts of extreme weather events such as floods and drought. These projects can also provide vital transportation in- frastructure, investment in community services and leisure and recreation. To maximise the contribution hydropow- er can make to the world economy, poli- cy-makers should recognise the urgency for a bold and ambitious green recovery plan as part of the global response to COVID-19, involving significant new in - vestment by public and private sectors. In its recently released Global Renew- ables Outlook,IRENA stated that an additional 850 GW of newly installed hy- dropower capacity, requiring investment of up to US$ 1.7 trillion, is needed by 2050 to support the targets of the Paris Agreement. This added capacity would also generate some600,000 skilled jobs over the coming decade. This means promoting greenfield and upgrade projects to help stimulate the economy, and increasing the ambition of renewable energy and decarbonisation Report by The International Hydropower Association (IHA) 58 energetica INDIA- June_2020