Executive Summary Excerpt
The Latin America and Caribbean (LAC) region is experiencing dynamic growth and requires large investments in elec-trical infrastructure. Hydropower is a major component of the region’s energy supply and will provide a significant pro-portion of future energy growth. A 2012 high-level workshop co-organized by the Inter-American Development Bank (IDB) concluded that meeting expectations for growth of the hydropower sector will pose several challenges to govern-ments, developers, financial institutions, civil society and other stakeholders. Many of these challenges concern the need for hydropower projects to meet evolving expectations for sustainability, defined here as energy development that is consistent with maintaining a broad spectrum of benefits and values from river systems.
Considerable progress has been made on the sustainability of individual hydropower projects, but this will not be suffi-cient to address the complex issues posed by multiple hydropower developments across a river basin or region. Sus-tainable hydropower development also requires system-scale planning, development and management; this is the ‘next frontier’ in hydropower sustainability. ‘System’ in this regard can refer to any level beyond individual projects that is the subject of a planning effort, be it a river basin, region, country, or interconnected grid.
Without progress on system-scale approaches to planning and developing hydropower, the sector will likely face continued conflict, leading to financial risk, delay or cancellation of projects, and potentially creating a sub-optimal investment context, which all can lead to missing energy targets. Further, the lack of system-scale planning will result in missed opportunities for more optimal and balanced outcomes—those which can meet energy needs while also maintaining other key values of river systems.
For hydropower development to actually follow a path toward system-scale, balanced outcomes, there are a number of challenges rooted in both technical analysis and policy. First, those optimal or quasi-optimal outcomes must be identified, and this requires information on a range of resources and the ability to integrate that information into an analytical framework. Second, the results of that analysis must be integrated into decision-making processes. To in-form these technical challenges, we present a conceptual framework below and illustrate it with an analysis in a hypo-thetical river basin. We conclude with a set of recommendations about how current planning processes can be re-formed so that promising balanced alternatives identified through planning can be become development reality.