Hydropower companies’ renewable strategy plans

Globally, the hydropower industry and many of its leading companies have implemented new corporate strategies to promote innovations and technical advances. Many companies have adopted these as their top corporate strategic objectives and priorities. They hope that continued improvements and innovations will help them to achieve sustainable hydropower business growth and developments globally. In addition, the ongoing modernisation and digitalisation of existing and new hydropower facilities have been high priorities for many hydropower companies globally.

The World Bank and the hydropower industry both have also affirmed their ongoing commitment to the responsible development of hydropower projects globally, both large and small. Historically, the World Bank has been a significant funder of hydropower projects in developing countries and emerging economies. The World Bank has stressed the potentials for hydropower to provide significant development benefits to different emerging economies. It has stressed

Hydro power & ocean renewable energy management 69 that hydropower projects should be installed in a socially, financially and environmentally sustainable way. The World Bank Group’s International Finance Corporation (IFC) has also declared that it is imperative for sustainability that there should be appropriate consideration of the environmental and social risks at the early stages of hydropower project planning. IFC has stressed that integrated planning should also allow for broad economic benefits beyond hydropower energy generation alone.

The World Bank has also included climate change resilience as a key consideration in its project assessments globally. The World Bank has set out new guidelines which have been designed to ensure that both the existing and future hydropower projects will be resilient to climate-related risks. These climate risks would include physical, operational and economic risks. These risks could pose serious threats to the viability of hydropower infrastructures. A good example of the potential risks includes dramatic shifts or extreme variability in hydrological conditions which could be caused by extreme droughts induced by global warming and climate change. In addition, there could be serious related social and environmental risks, such as flooding damages, major climate migration, etc.

In 2017, the World Bank and IFC worked with the Myanmar and Laos PDR governments to integrate strategic environmental and social assessments into their country-wide evaluations of water resources and hydropower developments. Both Myanmar and Laos, together with Cambodia, China, Thailand and Vietnam, have been sharing the hydropower resources of the Mekong River which flows through all these countries. New large hydropower projects have altered the river flows significantly and have raised serious concerns about the potential environmental impacts on the aquatic ecosystems, agriculture and fisheries in the downstream regions along the Mekong River.

The Hydropower Sustainability Assessment Protocol, introduced in 2011, has gained prominence as a global standard for evaluating hydropower projects from inception to construction and operation. In 2017, three project assessments have been published under the Protocol. All these have covered hydropower projects to be implemented in Europe. A good example is the post-installation evaluation of the 690 MW Karahnukar hydropower project in Iceland. This hydropower project was completed in 2007. It was Iceland’s largest and most controversial hydropower project. There were a lot of environmental concerns on the loss of wilderness areas to land inundation by several hydropower storage reservoirs and to potential changes in river flows. The assessment showed that the hydropower plant met various standards of best practice across most of the topics assessed (IHA, Hydropower Sustainability Assessment Protocol, 2015).

In late 2017, Sustainable Energy for All (SEforALL) and the International Hydropower Association (IHA) signed an important agreement to develop the concept of a Hydropower Preparation Facility. They believed that this should help national governments, in both emerging economies and developed countries, to better prioritise potential hydropower projects, in accordance with their sustainability assessments, before putting these projects out for competitive tendering by the private sector. Both organisations believed that these assessmentsand screenings should help to identify the most viable hydropower projects in the context of sustainability and local needs. In addition, SEforALL and the IHA expected that these preliminary screenings should improve the prospects for project funding, by reducing the high upfront costs and risks associated with early-stage preparations of hydropower projects (IHA, SEforALL and IHA, 2017).

The leading hydropower companies have also been undertaking modernisation and digitalisation of their existing and new facilities. The digitalisation of hydropower facilities has become an essential modernisation effort on existing hydropower plants. In addition, digitalisation has become an essential design and construction element of new hydropower projects. These have involved the implementation of advanced digital simulation, process monitoring and control technologies. These would allow the plant operators to better observe and respond to various aspects of plant operating conditions in a more efficient manner. These should contribute to meeting the objectives of improved efficiency of operations and maintenance, greater plant reliability, plus more flexible integration with the operations of other generating and storage facilities, including VRE.

Many of the leading hydropower technology companies have continued to develop and expand their digitalisation capacities. A good example is Voith Hydro from Germany which had introduced a new digital augmented virtual reality (VR) application. The new VR application will enable remote visualisation and analysis of hydropower plant conditions. These new digitalisation features should also help to optimise the repair and service planning of the hydropower plant. Another good example is that GE from the USA has also used computer-generated digital simulations of hydropower plant components along with actual measurements to identify potential plant weaknesses. These should help to provide real-time recommendations on potential corrective actions. An-dritz from Austria has also started to offer a digital solution for enhancing operation and maintenance of hydropower plants. The new system should help engineers to better decide on when to refurbish hydro plant components and operators to better optimise specific hydropower plant operations.

The leading hydropower companies have also been working hard to improve their business performances amidst the difficult market conditions. GE’s renewable energy business unit has continued to show growing revenues. This was due in part to higher hydropower-related sales. In comparison with other renewable powers, hydropower has contributed only one-tenth of the revenues that GE has generated from wind power. Andritz Hydro has also reported that the market conditions have been difficult. In particular, the low electricity prices and low energy prices have made the hydropower market conditions more difficult. These difficult market conditions have resulted in moderate investment activities amongst various power companies that own and operate hydropower facilities. There has also been a continued decline in new orders and sales, particularly for hydropower plant upgrades. Voith Hydro has also reported that fewer contracts are being awarded than expected in recent years and new orders have been declining.

Leading hydropower companies are hopeful that pumped hydropower storage schemes may continue to be a good growth area. They are anticipating positive

Hydropower & ocean renewable energy management 71 impacts on orders from growing demands for pumped storage facilities in emerging economies. A good example is that they are expecting strong hydropower orders from China, where several pumped storage facilities are being considered in the China national hydropower project pipeline.

 
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