Hydropower Could be Risky Bet in Warming World

As investments in wind and solar power climb, backing major hydropower projects may be seen as a risky bet in a warming world, as studies show that reservoirs may be major sources of methane emissions and climate change itself could make rain and snowfall less certain in some regions.

An indicator of where renewables investors are focusing their attention, large hydropower was left out of a major United Nations and Bloomberg report published this week showing that global investments in renewables spiked 17 percent in 2014.

Last year, as costs for wind and solar projects fell and investors saw their potential for reducing greenhouse gas emissions, investments in wind, solar, biomass, geothermal, and small hydropower projects totaled about $270 billion in 2014, up from $231 billion in 2013, according to the report.

Those numbers exclude investments in major hydropower projects — along the lines of the Hoover Dam on the Colorado River or the giant Three Gorges Dam built recently on the Yangtze River in China — that can generate more than 50 megawatts of electricity.
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Large hydro projects will likely be built in the coming years, especially in Africa and Asia, while the U.S. is entering an era of dam decommissioning or refurbishment rather than construction of new hydroelectric dams, said David Michel, director of environmental security for the Stimson Center, a Washington, D.C.-based and partly UN- and U.S. government-funded think tank focusing on water management, climate change and national security.
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Hydropower dams are long-term investments that last many decades, and climate models show that precipitation may become less certain in some areas, making a decision to build new hydro projects difficult for governments and private investors, he said.

The historic California drought is an example of how changing rain and snowfall patterns, possibly fueled by climate change, are affecting hydropower projects.  The drought has caused a 60 percent drop in hydroelectric power generation in California as reservoirs dry up amid the drought.  That inability to produce hydropower has forced Pacific Gas and Electric, one of the state’s major utilities, to impose a 1.5 percent rate increase to offset the loss in hydropower, according to the Sacramento Bee.

As the renewables investment report suggests by excluding large hydro, future investments in hydropower will focus on small projects because they cost less to build, Michel said.

Small hydro projects also have less local environmental impact than larger projects and less money is at stake if climate change makes a small project obsolete.

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