WORLD HINDU ECONOMIC FORUM

A Promising Business
(Enormous Opportunities of Business in Alternative Energy) Mukand S. Babel
Water Engineering and Management Asian Institute of Technology (AIT), Thailand 10-11 August 2013

Hydropower:

Sustainable

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Energy is essential for human

Security
Water Food Ecosystem Peace

Development
Economic Social Sustainable

Well-being
Health Livelihood Quality of life Poverty eradication

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Current and future energy consumption

OECD 2011-2030 (0.3% per annum) (-0.2% per annum per capita) Non-OECD 2011-2030 (2.5% per annum) (1.5% per annum per capita)

% of global energy use/demand Bharat

1990 2015 2030 1 5 6

Per capita energy use/demand (M Btu) Bharat 6 22 29 China 26 97 143 USA 321 302 280

China
8 22 26

USA
21 18 17

Source: US Energy Information Administration, 2011

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Electricity coverage
Countries with the largest population without access to electricity, 2010
Rural electrification

Source: IEA, 2012

Source: CEA, 2012

Just 10 countries account for 2/3rd of those (1.5 billion) deprived of electricity 1.3 billion people will have no access to electricity in 2030 3.5 billion will face water scarcity by 2030

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Major energy sources for electricity generation
Wind, Ocean, Geothermal, Photovoltaics, Solar, Bioenergy 2.5%

Source: IPCC, 2012

By 2030, HP will become the worlds dominant renewable energy source

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Why is hydropower an attractive option?
Clean Energy

Source: World Nuclear Association, 2012

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Why is hydropower an attractive option?
Inexpensive compared to other renewable energy sources
LCOE, USD(2011)/kWh

0.4 0.3
0.2

0.1
0.0

Onshore wind
Ratio compared to small hydro

CSP

Large solar Biomass PV

4.00 1.00

Hydro small
1.00

Hydro large
0.71

1.78

3.77

Source: International Renewable Energy Association, 2012

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Why is hydropower an attractive option?
Better efficiency compared to other energy sources

Source: IHA, 2013

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Why is hydropower an attractive option?
Good development potential

Source: IPCC, 2012

Source: IPCC, 2012

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Why is hydropower an attractive option?
Good development potential - Bharat

Region
Source: Central Electricity Authority, 2012

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Why is hydropower an attractive option?
Long-term financial benefits

1-2 years 70% project cost 40+ years 10% project cost

1-7 years 5% project cost

1-2 years 15% project cost

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Why is hydropower an attractive option?
Clean and renewable High reliability, flexibility and efficiency High capacity factor Relatively inexpensive Long-term financial rewards Huge development potential

Multiple-use benefits (flood control, water supply etc.) of hydropower Development at wide range of scales to meet diverse demands
Rural and remote area coverage through small schemes

Improved livelihoods and poverty eradication Agent for both mitigation and adaptation to climate change WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

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Major hurdles in the hydropower business
Social issues
Rising cost of insurances High construction risks Macro economic analysis Hydrological risks Anti-dam lobby Large up-front costs Public opposition to privatization Commercial risks Lack of governance Environmental problems Political turmoil

Complex administrative mechanisms Energy price volatility

Sustainable hydropower

Public-private partnership

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Sustainable hydropower (SHP): Key considerations
SOCIAL Social impact assessment Community engagement and acceptance Multiple use benefits Public health Population displacement Vulnerable social groups Heritage

B A

C
SUSTAINABILITY
A SOCIAL B ECONOMIC C ENVIRONMENTAL

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Sustainable hydropower (SHP): Key considerations
ECONOMIC B Distribution and sharing of benefits Demonstrated need for project Cost-benefit and economic A performance Longevity of benefits Energy system benefits SUSTAINABILITY Local capacity building A SOCIAL B ECONOMIC Resource use

C ENVIRONMENTAL

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Sustainable hydropower (SHP): Key considerations
ENVIRONMENTAL Environmental assessment & monitoring Siting and design Construction impacts Erosion and sedimentation Seismic Water quality Passage of aquatic species Biodiversity & threatened species Pest species Environmental flow

B A

C
SUSTAINABILITY
A SOCIAL B ECONOMIC C ENVIRONMENTAL

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Investment costs and needs
Investment cost highly variable
site sensitive design choice scale of production

Large-scale HPP: USD 1,000-3,500 per kW Small HPP slightly higher range band $ ONE trillion required to provide universal modern energy access by 2030
Unit: USD Billion

Year

Investment

Multi-lateral organizations

Bilateral aid

Domestic governments

Private investors

2009 2010-30

9.1 48.0

3.1 18.0

1.3

2.7 15.0

2.0 15.0

Source: International Renewable Energy Agency, 2012

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Final Reflections SHP is key to meeting future energy (and water) needs
Proven technology; Small, medium and large HPP Risks traditionally associated with HP can be addressed Contributes to water and energy security Low-carbon economy and society

Private investment essential; significant barriers must be overcome

Enabling environment for investment Regulatory reforms Political and institutional issues, esp. in international basin Access to funding at local level for rural communities WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

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Improving energy and water access and promoting renewable energy in the context of a climate-constrained world makes an investment in sustainable hydropower attractive

THANK YOU
msbabel@ait.asia
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