The World Bank Asia Sustainable and Alternative Energy Program E A S T A S I A A N D P A C I F I C E N E R G Y S T U D I E S Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades Case Studies for Selected River Basins in Northwest Vietnam June 2014 Copyright © 2014 The International Bank for Reconstruction and Development/ The World Bank Group 1818 H Street, NW Washington, DC 20433 USA All rights reserved. First printing: June 2014 Manufactured in the United States of America. Cover photos: © Deltares/World Bank. Used with the permission of Deltares. Further permission required for reuse. The World Bank Asia Sustainable and Alternative Energy Program E A S T A S I A A N D P A C I F I C E N E R G Y S T U D I E S Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades Case Studies for Selected River Basins in Northwest Vietnam June 2014 Copyright © 2014 The International Bank for Reconstruction and Development / The World Bank Group 1818 H Street, NW Washington, DC 20433, USA All rights reserved First printing: June 2014 Manufactured in the United States of America. Please cite this report as follows: ASTAE (Asia Sustainable and Alternative Energy Program). 2014. Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades. South Asia Energy Studies. Washington, DC: World Bank. Interior photos: © Deltares/World Bank. Used with the permission of Deltares. Further permission required for reuse. The findings, interpretations, and conclusions expressed in this report are entirely those of the authors and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its board of executive directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. Contents Foreword ....................................................................................................................................vii Acknowledgments ....................................................................................................................viii Abbreviations and Definitions ...................................................................................................ix Overview .....................................................................................................................................xi 1 Introduction ............................................................................................................................1 Background and Objectives ......................................................................................................................................1 Scope of the Study ...................................................................................................................................................1 Setup of the Report ..................................................................................................................................................2 2 Small-Scale Hydropower Development in Vietnam ...........................................................3 Opportunities and Challenges ..................................................................................................................................3 Current Small-Scale Hydropower Planning ...............................................................................................................5 Management and Operation ....................................................................................................................................7 Note...........................................................................................................................................................................8 References ...............................................................................................................................................................8 3 Descriptions of the Small-Scale Hydropower Cascades ....................................................9 4 Approach, Methods, and Definitions..................................................................................13 Overall Approach ....................................................................................................................................................13 Screening ...............................................................................................................................................................14 Hydrology ...............................................................................................................................................................14 Water Balance Analysis ..........................................................................................................................................15 Sediment Dynamics ...............................................................................................................................................15 Network Approach for Cumulative Impacts ............................................................................................................15 What Are Cumulative Impacts? .......................................................................................................................15 How Were Cumulative Impacts Assessed? ....................................................................................................18 Definition of VECs ..................................................................................................................................................19 Impact Ratings and Interaction Coefficients ..........................................................................................................21 Boundaries and Scenarios Used in the Cumulative Impact Analysis ......................................................................23 Optimization Modeling ...........................................................................................................................................24 Notes.......................................................................................................................................................................25 References .............................................................................................................................................................25 iii iv Contents 5 Results of the Screening Phase ..........................................................................................27 Activities during the Screening Phase ....................................................................................................................27 Preliminary Impact Analysis ...................................................................................................................................27 Ngoi Xan ..........................................................................................................................................................28 Nam Tha ..........................................................................................................................................................28 Pho Day ...........................................................................................................................................................29 Nam Hoa .........................................................................................................................................................29 Nam Chien ......................................................................................................................................................29 Sap ..................................................................................................................................................................29 Opportunities for Joint Operation ...........................................................................................................................29 Selection of Cascades for Detailed Study ..............................................................................................................29 Notes.......................................................................................................................................................................30 6 Cumulative Impact Analysis of Small-Scale Hydropower Cascades ..............................31 Cumulative Impacts on Flow Regime .....................................................................................................................31 Cumulative Impacts on Sediment Dynamics..........................................................................................................32 Cumulative Impacts on Valued Ecosystem Components (VECs) ...........................................................................35 Reference Case: No Cascade ..........................................................................................................................35 Case 1: Cascade Development .......................................................................................................................36 Conclusion ..............................................................................................................................................................38 Note.........................................................................................................................................................................39 References..............................................................................................................................................................39 7 Future Small-Scale Hydropower Performance .................................................................41 Effect of Environmental Flows ...............................................................................................................................41 The Importance of Environmental Flows ........................................................................................................41 Legal Requirements and Actual Implementation ............................................................................................41 Model Results .................................................................................................................................................42 Effect of Climate Change .......................................................................................................................................45 Climate Scenarios ...........................................................................................................................................45 Model Results .................................................................................................................................................46 Conclusion ..............................................................................................................................................................46 Notes.......................................................................................................................................................................47 References .............................................................................................................................................................47 8 Potential for Improving the Planning and Operation of Small-Scale Hydropower Planning Plants...............................................................................................49 Planning Problems Observed .................................................................................................................................49 Suggestions for Planning Improvements ...............................................................................................................50 Optimizing Operating Rules for Hydropower ..........................................................................................................51 Description of Analysis ....................................................................................................................................51 Market .............................................................................................................................................................51 Model Results .................................................................................................................................................52 Power Optimization and Other Water Demands .............................................................................................53 Opportunities for Optimization ........................................................................................................................54 Joint Maintenance ..................................................................................................................................................55 General ............................................................................................................................................................55 Sediment Handling ..........................................................................................................................................55 Maintenance of Electromechanical Parts and Other Civil Works ....................................................................55 Conclusion ..............................................................................................................................................................56 Notes.......................................................................................................................................................................56 References .............................................................................................................................................................56 Contents v 9 Conclusions and Recommendations .................................................................................57 Development of Small-Scale Hydropower in Vietnam ............................................................................................57 Recommendations for Policy Makers .....................................................................................................................58 Recommendations for Planners, Regulators, and Developers ...............................................................................58 Improve Cascade Efficiency ............................................................................................................................59 Reduce Negative Environmental Impacts .......................................................................................................59 Reduce Negative Social Impacts .....................................................................................................................61 Reference ...............................................................................................................................................................61 Boxes 2.1 Regulations and Legislation Regarding Hydropower Development in Vietnam..................................................7 4.1 Land and Water Interactions in River Basins....................................................................................................16 4.2 The Importance of Connectivity in Rivers........................................................................................................19 4.3 Definition and Assets of Livelihood..................................................................................................................21 4.4 Interaction Coefficients....................................................................................................................................22 6.1 Summary of Cumulative Impact Assessment for Studied Cascades...............................................................39 7.1 Minimum Flow or Environmental Flow?..........................................................................................................43 8.1  Article 25: Maintaining Minimum Flow in River Basins—Governmental Decree 120/2008/ND-CP on River Basin Management............................................................................................................................50 9.1 Benefit Sharing for Hydropower Development................................................................................................60 Figures 2.1 Historical and Projected Electricity Demand in Vietnam.....................................................................................3 3.1 Schematic Project Layout of Nam Chien 2.......................................................................................................10 3.2 Cross-Section and Plan View of Ngoi Xan Cascade.......................................................................................... 11 4.1 Flow Chart of Study Activities..........................................................................................................................14 B4.1.1 Sample Hydrographs........................................................................................................................................16 4.2  Schematic Representation of Cumulative Impacts..........................................................................................17 4.3 Landscapes with High (A) and Low (B) Degrees of Connectivity.....................................................................17 4.4 Generic Cause-Effect Network for Cascades...................................................................................................18 4.5  Example of Cumulative Impact Calculation for Nam Tha Valued Fauna Showing Pathway for Habitat Fragmentation......................................................................................................................................22 6.1 Hydrographs of Van Ho Dam in Ngoi Xan Cascade..........................................................................................31 6.2 Flow Duration Curves for the Lowermost Small-Scale Hydropower Plants in the Cascades...........................32 6.3 Schematic of Impacts of a Hydropower Dam on Reservoir and Riverbed Morphology...................................33 6.4 Spider Diagrams of the Cumulative Impacts....................................................................................................36 B7 .1.1 Example of an Environmental Flow Regime Built up Using Building Blocks....................................................43 7.1 Comparison of Natural Flow Regime with Environmental Flow Releases (Nam Tha 6)...................................44 7.2 Nam Tha 6: Relationship between Minimum Flow Releases and Energy Production......................................45 8.1 Sensitivity Analysis for the Effect of Environmental Flows under Optimization...............................................54 B9.1.1 Flow Chart Showing Measures that Go beyond Their Expected Obligatory Limits in Quality and Time..........60 Map 3.1 Overview Map of the Six Studied Cascades.............................................................................................................9 vi Contents Photos 2.1  Powerhouse at Ngoi Xan 1 Small-SCALE Hydropower Plant.............................................................................5 2.2 Nam Chien 1 Hydropower Plant Reservoir Lake................................................................................................8 3.1 Nam Tha 6 Dam ............................................................................................................................................... 11 4.1 Construction of Pa Chien Tunnel.......................................................................................................................21 5.1 Nam Hoa Dam under Construction .................................................................................................................30 6.1 Sedimentation in Front of the Intake of Van Ho Small-Scale Hydropower Plant in the Ngoi Xan Basin (looking downstream) ............................................................................................................34 6.2  Dry Riverbed below Nam Chien 2 Dam ..........................................................................................................37 7.1 Nam Hoa River Downstream from Dam..........................................................................................................45 Tables O.1 Overview of Studied Rivers and Small-scale Hydropower Projects.................................................................. xi 2.1 Overview of Hydropower Development in Vietnam...........................................................................................4 2.2 Steps in Small-Scale Hydropower Planning........................................................................................................6 3.1 Overview of Studied Rivers and Small-Scale Hydropower Projects.................................................................10 4.1 End Users of the Study....................................................................................................................................13 4.2 Valued Ecosystem Components......................................................................................................................20 4.3 Definition of Cases...........................................................................................................................................23 4.4 Temporal Boundaries........................................................................................................................................24 4.5 Receptors and Valued Ecosystem Components and Their Geographical and Temporal Impact Boundaries...........................................................................................................................................25 5.1 Selection of Potential Impacts..........................................................................................................................28 6.1 Impact Scores for All River Basins, without (case 0) and with (case 1) Cascade Development......................35 6.2 Proportion of River Diverted by the Cascade...................................................................................................37 6.3 Cumulative Social Impacts of the Cascades....................................................................................................38 7.1 Summary of Cascade Impacts of Environmental Flow Releases Compared with the Base Case of No Environmental Flows..................................................................................................................................42 7.2  Projected Rainfall Change for Northwest Vietnam ..........................................................................................46 7.3 Summary of Impacts of Climate Change on Cascades....................................................................................46 8.1 Energy Prices, 2013..........................................................................................................................................51 8.2 Total Modeled Annual Energy Production and Revenues for the Four Cascades from Various Typical Years.........................................................................................................................................52 8.3 Sensitivity Analysis for the Effect of Environmental Flows under Optimization...............................................53 Foreword The government of Vietnam and the World Bank have This report highlights some of the most important chal- had a long collaboration in the energy sector, sharing lenges for small-scale hydropower development in Viet- the commitment to each of the pillars of the Sustainable nam, based on case studies of six river basins in northern Energy for All Initiative—access for all, increasing energy Vietnam. It is the result of collaboration between the efficiency, and boosting the share of renewable energy World Bank and the Ministry of Industry and Trade in resources. The World Bank is currently supporting the Vietnam, and aims to improve the sustainability of small- Vietnamese government’s development of renewable scale hydropower projects. Although based on a limited energy through the 260 megawatt Trung Son Hydropower number of cases, its findings are likely to be applicable Project and the Renewable Energy Development Project, countrywide, and the report provides valuable recom- under which up to 35 small-scale hydropower plants in a mendations to the country’s policy makers, planners, and number of river cascades are planned. developers of small-scale hydropower. The World Bank and the government of Vietnam share a The results of this study are also likely to be applicable commitment to all aspects—economic, environmental, for the development of hydropower and river basin man- and social—of the development of sustainable hydro- agement in many parts of the world. Globally, small-scale power. Hydropower development in Vietnam comprises hydropower development is intensifying because of many challenges: one of them is to maintain quality in improved technology and knowledge and because it is a the face of the country’s pressure to rapidly increase renewable energy source with large potential for provid- power generation capacity. Vietnam greatly improved ing cheap and clean electricity. Globally, development of its frameworks and procedures for developing efficient river basins at the same time becomes more and more and environmentally and socially sound hydropower, but complex as multiple users compete for a limited water room for further enhancement still remains. The World resource. The institutional arrangements and procedures Bank is therefore pleased to support the government of must be in place to allocate water across competing Vietnam with knowledge and technical assistance to fur- needs in the most optimal manner. The World Bank is ther improve the planning, operation, and maintenance happy to share the experience and knowledge from Viet- of its hydropower portfolio. nam through this report, and I invite all those who are interested in the development of small-scale hydropower Development of small-scale hydropower, the potential of and river basin management to read and reflect on how which is still huge in Vietnam, has its special challenges. the findings and recommendations of this study may be The complexity of small-scale hydropower is often similar applicable for the challenges faced in other parts of the to that of large hydropower, while the regulatory frame- world. work is less well defined. Small-scale hydropower is also developed by private investors, often small companies, Jennifer Sara which do not always have as much experience in devel- Sector Manager oping hydropower as the large developers. And when Vietnam Sustainable Development built in cascades that include several projects in a river, World Bank small-scale hydropower may have significant cumulative impacts on values that are important to local people and the environment. vii Acknowledgments This report is based on a series of consultant reports Hydropower Department). The report greatly benefited conducted by the consortium of Deltares, SWECO, the from input and feedback from a large number of stake- Institute of Water Resources Planning, and the Institute holders at field visits and workshops. Significant contri- of Geography for the World Bank and the Ministry of butions were made by the local and national departments Industry and Trade, Vietnam. of the Ministry of Industry and Trade, Ministry of Agri- culture and Rural Development, and Ministry of Natural • Screening Report: Cumulative Impact Assessment Resources and Environment, as well as the small-scale and Watershed Management for River Basin Cas- hydropower developers. cades in Vietnam, November 2012 • Main Report: Cumulative Impacts and Joint Opera- This report was cofinanced by the World Bank, the Asia tion of Small-scale Hydropower Cascades Supported Sustainable and Alternative Energy Program (ASTAE), by REDP , August 2013 and the Department of Foreign Affairs and Trade (DFAT) • Annex 1. Detailed CIA and joint operation of Nam of the Australian government through the East Asia and Tha, August 2013 Pacific Region Infrastructure for Growth (EAAIG) Trust • Annex 2. Detailed CIA and joint operation of Ngoi Fund. Xan, August 2013 • Annex 3. Detailed CIA and joint operation of Chien, August 2013 ASTAE • Annex 4. Detailed CIA and joint operation of Sap, August 2013 The Asia Sustainable and Alternative Energy Program • Annex 5. Methods and models, August 2013 (ASTAE) was created in 1992 as a Global Partnership Pro- gram. ASTAE’s mandate is to scale up the use of sustain- This report was prepared by the Vietnam Energy Team of able energy options in Asia to reduce poverty and protect the World Bank: Franz Gerner (Lead Energy Specialist), the environment through promoting renewable energy, Ky Hong Tran (Energy Specialist), Thi Ba Chu (Energy Spe- energy efficiency, and access to energy. Currently, cialist), and Lien Thi Bich Nguyen (Program Assistant), in ASTAE is funded by the government of the Netherlands, collaboration with a consultant consortium, led by Mar- the Swedish International Development Cooperation cel Marchand, consisting of Deltares (the Netherlands), Agency (SIDA), and the U.K. Department for International SWECO (Norway), the Institute of Water Resources Plan- Development (DFID). ning (Vietnam), and the Institute of Geography (Vietnam). The work was supported by Rikard Liden (Senior Hydro- power Specialist) and Son Van Nguyen (Environmental Specialist) from the World Bank. The report has benefited Department of Foreign Affairs and Trade from review by Jennifer Sara (Sector Manager), Daryl Australian Government Fields (Senior Water Resources Specialist), and Wolfhart Pohl (Environmental Adviser). The department’s role is to advance the interests of Aus- tralia and Australians internationally. This involves working The team acknowledges with deep gratitude the coop- to strengthen Australia’s security; enhancing Australia’s eration and support of the General Directorate of Energy, prosperity; and delivering an effective and high quality aid Ministry of Industry and Trade of Vietnam during the programme. The department provides foreign, trade, and preparation of the report. Special thanks go to Pham development policy advice to the government. We work Manh Thang (Director General), Le Tuan Phong (Deputy with other government agencies to ensure that Austra- Director General), Pham Trong Thuc (Director Renew- lia’s pursuit of its global, regional, and bilateral interests able Energy Department), and Do Duc Quan (Director is coordinated effectively. viii Abbreviations and Definitions BBM Building Block Methodology PDP Power Development Plan CIA cumulative impact assessment PECC Power Engineering Consulting Joint Stock Company DARD Department of Agriculture and Rural Development Powel Sim Program for short-term hydropower planning (Powel AS Smart Generation DOIT Department of Industry and Trade family) EF environmental flow PPC Provincial People’s Committee EI Energy Institute REDP Renewable Energy Development Program EIA environmental impact assessment SEA strategic environmental assessment EMP environmental management plan SHP small-scale hydropower EPC environmental protection commitment SIA social impact assessment ERAV Electricity Regulatory Authority of Vietnam SHOP Short-term Hydro Operation Planning (model) EVN Electricity Vietnam VEC valued ecosystem component GWh gigawatt hour (unit of energy) Cumulative Impact: Cumulative impacts are impacts that HEC-HMS Hydrological Modeling System result from incremental changes caused by other past, present, or reasonably foreseeable actions together with MARD Ministry of Agriculture and Rural the project. (Walker, L.J. and J. Johnston 1999. Guidelines Development for the Assessment of Indirect and Cumulative Impacts as well as Impact Interactions. EC DGXI Environment, MOIT Ministry of Industry and Trade Nuclear Safety & Civil Protection. Luxembourg: Office for Official Publications of the European Communities.) MONRE Ministry of Natural Resources and Environment Small-scaleHydropower: Projects of less than 30 mega- watts installed capacity (as per Decision of Ministry of MW megawatt (unit of power) Industry - No 3454/QD-BCN dated October 18, 2005. PAP project-affected people ix Overview Small-scale hydropower (SHP) in Vietnam is defined as The study found that development of SHP in Vietnam has those projects having less than 30 megawatts (MW) of come a long way. A well-established institutional frame- installed power generating capacity. SHP makes a large work in Vietnam has promulgated legal and policy pro- contribution to renewable energy generation in the coun- cedures for hydropower development, and experience try. More than 370 SHP plants are operational or under and skills are embedded in the organizations of the major construction. Several hundred more plants are planned, ministries, institutes, and local consultants. which would bring total power generating capacity to approximately 3.5 gigawatts (GW). Notwithstanding the Nevertheless, SHP causes impacts that are sometimes advantage of carbon-dioxide-free electricity production, overlooked. The studies for this report indicate that SHP the proliferation of SHP plants can have detrimental cascades, when viewed as a system, tend to have sig- impacts on the environment and on water use. To obtain nificant impacts through aquatic habitat fragmentation more insight into the consequences of hydropower cas- because the series of diversion schemes significantly cades and on the possibilities to improve the cascade reduces river flows for long distances. Furthermore, planning process, the Vietnamese Ministry of Industry although land take is small for each project, the required and Trade and the World Bank jointly initiated the study land accumulated for the cascade as a whole may be on Cumulative Impacts and Joint Operation of Small- comparable to that of a large hydropower plant with cor- Scale Hydropower Cascades Supported by the Renew- responding installed turbine capacity. Risks of deforesta- able Energy Development Project in Vietnam. tion and impacts on biodiversity also follow from opening up pristine areas with access roads. Six SHP cascades situated in six river basins in the north- west mountainous region of Vietnam were analyzed, However, because SHP cascades are often built in remote together representing a total future maximum installed mountainous areas that are unsuitable for agriculture, capacity of 256 MW from SHP and 200 MW from one resettlement of people and conflicts with irrigation are medium-size hydropower project (table O.1). Four cas- normally minor. Direct social impacts are site specific and cades were subjected to a more detailed analysis: Ngoi often related to minority ethnic groups. Impacts on river Xan, Nam Tha, Chien, and Sap. flows are mostly limited to within the cascade because TABLE O.1 OVERVIEW OF STUDIED RIVERS AND SMALL-SCALE HYDROPOWER PROJECTS Number of small-scale hydropower projects Total future maximum installed capacity River Operational Under construction a Planned Total (MW) Chien 2 1 0 3 54 + 200b Nam Hoac 0 2 0 2 26 Nam Tha 1 3 5 9 58.9 Ngoi Xan 3 2 1 6 53.7 Pho Dayc 0 1 1 2 21 Sap 1 4 3 8 63.4 7 13 10 30 256 + 200 a. As of April 2013. b. Nam Chien 1. c. Not included in the detailed analysis. Source: World Bank. xi xii Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades of the normally small reservoir volumes for SHP . The operation of both existing and future SHP cascades would effect of peaking, that is, power production during only a be to apply power-optimization models, run at a common few hours of the day, may negatively affect water users operations center, to optimize the storage and plant (tur- just downstream of the cascade during the dry season, bine) efficiencies of the entire cascade. Such a program but the studies of the six cascades in northern Vietnam would require that the owners of individual SHP plants indicate that such impacts are limited. understand the benefits of cooperation and invest in it. The studies provide an important message. The cumula- This study shows that SHP development still faces some tive impacts of SHP are not always strictly additive, and challenges. SHP cascade development creates trade-offs could be either underestimated or overestimated. The with values important to other stakeholders, similar to effects on an important ecosystem component such as the development of individual large hydropower plants. aquatic fauna is synergistic (that is, the cumulative impact (For example, Nam Chien 1 has more installed turbine is more than the sum of each individual project’s impact) capacity per square meter of reservoir area than the because development of the cascade exacerbates the other 29 SHP plants in the six cascades combined.) impacts on migration and mobility of riverine and ter- restrial animals. In contrast, the project-affected people The main conclusion of this study is, therefore, that the in SHP development in Vietnam are mainly affected planning and development of SHP should focus on the system by the changed river regime downstream of the entire (or cascade) rather than on individual projects. cascade, and impacts are thus antagonistic (that is, the cumulative impact is less than the sum of each individual The main policy recommendation of this report is to project’s impact) because the addition of more dams break the paradigm of planning and enforcing rules for upstream will not significantly change the downstream SHP on a one-project-at-a-time basis. The government of flow regime. Some impacts may also be indirect (such Vietnam should strengthen national- and regional-level as access roads opening up pristine areas) and are often planning for SHP, and should promote the development ignored, emphasizing the need to study SHP cascades of robust and efficient cascades in rivers that are most as a system so as to fully understand the local conditions suited to such development. The focus of policy change and interactions. should be on future developments, but also on the imple- mentation of no-regret measures for existing projects. The studies of the six SHP cascades in Vietnam show The main recommended policy steps are the following: that implementation of environmental flows is challeng- ing. Several of the dams under study did not have facili- • Strengthen the requirements and performance of ties (culverts, gates) that would allow the release of an participatory technical optimization and strategic environmental flow. Furthermore, the absence of either environmental assessments on both the river basin quantitative guidelines or rules of thumb in the current and regional levels. Doing so will enable system- regulations leads to subjective and arbitrary flow release level optimization of the hydropower plants and of requirements. Another essential concept for protecting the evaluation of impacts, which will improve over- valued ecosystems, intact rivers (whereby a part of the all power production efficiency and will guide the river basin, for example, a tributary adjacent to the cas- mitigation and offset of negative impacts most cost cade remains without any hydropower development), effectively. seems not to be considered in the planning of SHP • Provide incentives for private developers to build, cascades in Vietnam. Thus, room for clarification of the operate, and maintain SHP cascades in an efficient, environmental legislation and improved enforcement of environmentally sound, and participatory way. Pos- it remains. sible approaches could be to promote ownership of cascades by individual or collaborative companies The studies of the six river cascades further indicate that for joint operation and maintenance; to develop and optimizing them as a system would yield significantly disseminate technical assistance to build capacity higher power production and higher revenues. By apply- for developers to cooperatively optimize construc- ing joint planning, joint operations, and joint maintenance tion, operation, and maintenance; and to encourage of the plants in the cascades, costs will be lower and total stakeholder participation. benefits will be higher. Planning opportunities exist, par- • Set long-term tariffs at a level that would provide ticularly where a large reservoir can be designed at the incentives for developers to make the necessary top of the cascade, that will benefit all downstream SHP up-front capital investment in studies and the imple- plants by yielding higher revenues through the produc- mentation of measures for sustainable safety, envi- tion of more peak power. A no-regret opportunity for the ronmental, and social management. 1 Introduction Background and Objectives same time reducing adverse impacts. The objective of this assignment was, therefore, to carry out a study on Increasing energy demands and concerns about global the cumulative impacts and opportunities for improved warming call for an increase in energy generation from joint operation of cascades in six rivers where projects renewable sources. Small-scale hydropower (SHP) are funded under REDP . plants can make a significant contribution to meeting this demand. However, the optimal use of this resource in a sustainable manner still remains a challenge. A cas- Scope of the Study cade of small dams may have detrimental impacts on the environment and on water use in the absence of The scope of the study was twofold: (1) to identify the proper planning and implementation of mitigation mea- possible unforeseen cumulative impacts of a series of sures. To obtain more insight into the consequences of SHP plants and (2) to assess the opportunity for poten- hydropower cascades and possibilities for improving tial optimization of their joint operation. The objective is the cascade planning process to reduce such impacts, to give operators, planners, and policy makers recom- the Vietnamese Ministry of Industry and Trade and the mendations on how to strategically plan, implement, and World Bank jointly initiated the study on Cumulative operate such cascades to maximize energy production Impacts and Joint Operation of Small-Scale Hydropower and minimize environmental and social impacts. It is not Cascades Supported by the Renewable Energy Develop- part of an official institutional planning or decision-making ment Program (REDP) in Vietnam. framework (such as the World Bank Safeguard Policies for implementing projects) and therefore not a detailed cumu- REDP provides credit lines for SHP development via lative impact assessment (CIA) in the traditional meaning. participating banks. The program also has a technical Although many parts of the study use the methodology of assistance and capacity-building facility to assist par- a traditional CIA, the level of detail applied is less than in ticipating banks and project developers with the prepa- a full-fledged CIA. The study output provides indications ration, appraisal, and implementation of SHP projects. of improvements for each cascade, but additional studies Although the projects financed under REDP include would be required to define these improvements in detail, requirements for environmental flow analyses, existing assess their feasibility, and plan their implementation. plants on the rivers do not necessarily follow the same policies. Furthermore, there is no documented analysis Because this study is not part of an official planning or of the impacts on other water users and of the conse- decision-making procedure, it deviates from an “official” quences of the entire cascade for the environment along CIA in the following ways: different river stretches. There is thus a need for study- ing the complete river system and the potential addi- • Stakeholder consultation was done primarily at the tional cumulative impacts of the projects funded through level of national and provincial governmental agen- REDP . Measures such as adjustment of operating rules cies. Local stakeholders were involved to a limited or joint operation could optimize revenues while at the extent in an informal manner (interviews). 1 2 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades • The analysis of environmental impacts used mostly the first phase of the study all six rivers were screened secondary data. Primary data collection was for potential significant cumulative impacts. The results of restricted to water and sediment sampling. this screening were presented in a separate report, which • Boundaries for the analysis were set but were not is summarized in chapter 5. This screening showed that observed with the same rigor as for a CIA. The significant cumulative impacts can be expected for four of flexibility afforded by the lack of formality helps in the rivers; these impacts merited further detailed analy- identifying significant impacts at time and space sis. These four rivers are Ngoi Xan, Nam Tha, Nam Chien, scales that may not be found when certain levels and Sap. For each of the four detailed study cases, the are excluded at the outset. river basin and hydropower cascade were described, the hydrological and environmental impacts were assessed, and opportunities for joint operations were quantified. Setup of the Report This report presents summaries of the cumulative impact analyses (chapter 6) and draws general conclusions with Chapter 2 provides a brief background of small-scale respect to present and future environmental conditions hydropower development in Vietnam, including its current (chapter 7). It also summarizes the results of the optimiza- planning procedures, while chapter 3 provides a descrip- tion modeling for each cascade (chapter 8) and provides tion of the six studied river basins. Chapter 4 describes the recommendations for future SHP planning and cascade approach, methods, and definitions of the study. During operation (chapter 9) 2 Small-Scale Hydropower Development in Vietnam Opportunities and Challenges The government of Vietnam has embarked on a major expansion of the hydropower sector, which is transform- According to Vietnam’s 7th Power Development Plan ing the ecological and social systems of the country. (PDP), the country’s annual electricity demand is expected All main river systems are or will be dammed by one to increase 11.8 percent to 15.8 percent between 2011 or more hydropower projects—each with road access, and 2015. Growth in demand is then expected to taper to transmission lines, and linked development shaping the 7.2 percent to 8.9 percent between 2026 and 2030 (fig- terrestrial, aquatic, and social environment (Suhardiman, ure 2.1). Hydropower is among the largest contributors de Silva, and Carew-Reid 2011). SHP development has to electricity production in the country and is expected the potential to contribute significantly to this expansion to keep that position through 2020, and maybe through (Tohoku Electric Power Company and Engineering and 2030. However, its relative share will decrease consider- Consulting Firms Association 2010). Vietnam’s advan- ably to an expected 23 percent in 2020 when coal-fired tages in developing SHP come from its dense system of plants will have a share of 48 percent, according to the rivers and streams. With 2,200 or more streams and riv- 7th PDP . Although the PDP prioritizes the development of ers more than 10 kilometers in length, Vietnam has very hydropower resources, no specific targets for small-scale high potential for hydropower production. In addition, hydropower (SHP) are mentioned. average rainfall is high and the combination of widely FIGURE 2.1 HISTORICAL AND PROJECTED ELECTRICITY DEMAND IN VIETNAM Electricity consumption demand 500 140 at high scenario (left scale) 450 120 Electricity consumption demand 400 at average scenario (left scale) 350 100 Terawatt hour Electricity consumption demand Gigawatt 300 80 at low scenario (left scale) 250 Peak load demand at 200 60 high scenario (right scale) 150 40 Peak load demand at 100 average scenario (right scale) 20 50 Peak load demand at 0 0 low scenario (right scale) 1995 2000 2005 2010 2015 2020 2025 2030 Source: Nguyen and Duong 2009. 3 4 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 2.1 OVERVIEW OF HYDROPOWER DEVELOPMENT IN VIETNAM Total Operational Under construction Investment study Planning Type Capacity Capacity Capacity Capacity Capacity of project Projects (megawatts) Projects (megawatts) Projects (megawatts) Projects (megawatts) Projects (megawatts) Medium 110 17,680 49 11,600 36 4,630 18 1,026 7 424 and large hydropower SHP 1,000 7,431 190 1,466 181 2,324 276 2,583 353 1,058 SHP as 90 30 79 11 83 33 94 72 98 71 percentage of total Total 1,110 25,111 239 13,066 217 6,954 294 3,609 360 1,482 Source: Hydropower Department, Ministry of Industry and Trade 2012. distributed streams and high relief of the terrain provides Public opinion may tend toward thinking that SHP is green suitable conditions for SHP development. and beautiful, while large-scale hydropower projects have a reputation for causing dramatic, negative impacts to the As of 2013, 1,110 hydropower projects were operational, environment. Scientists have recently raised the issue, under construction, subject to an investment study, or however, that swaths of untouched nature are being planned (table 2.1). Of these, about 90 percent are SHP fragmented by many small projects (Bakken and others plants, usually considered to be projects of less than 30 2012). Concerns have also been expressed in the media megawatts (MW) installed capacity (as per Ministry of in Vietnam. In 2012, Deputy Prime Minister Hoang Trung Industry Decision No. 3454/QD-BCN, dated October 18, Hai proclaimed that hydropower projects that have sig- 2005). Some 190 plants are operational, with an installed nificant negative impacts on the environment should be capacity of 1,466 MW, and 810 are in various stages of rejected and existing ones that violate regulations should development. Provinces with strong potential are Son La, have their licenses revoked (Vietnam News, July 6, 2012). Kontum, and Lao Cai. He added that provincial and city authorities should check and assess the capacity of contractors for SHP projects. In Vietnam, SHP projects have been constructed since And the deputy chairwoman of the People’s Committee the 1960s. They were initially built with funding from the of Nam Giang District, Quang Nam Province, in which 11 state budget during 1960–85 in the northern and central hydropower plants are planned, suggested some medium provinces. From 1985 to 1990, investment was also pro- and small-scale projects should be stopped. She said not vided by ministries, industries, provinces, military units, only had building the plants reduced the forest areas, and cooperatives. After 2003 investment by the private but the construction of roads also accidentally created sector became increasingly important as the electricity favorable conditions for illegal gold exploiters to increase market was liberalized (GIZ 2012).1 Each year through their activities (Vietnam News, October 12, 2012). Also, 2017, 150–300 MW is planned to become operational. the strategic environmental assessment (SEA) of the 6th National Plan for Power Development quotes experts and Because it is a renewable source of energy, SHP con- local administrators as saying that “investors only set up tributes directly to a low-carbon future. Furthermore, if hydropower projects so that they have access to logging” properly managed it can be a catalyst for the develop- (MOIT 2011, 152). The SEA further mentions sedimenta- ment of the economies of remote locations inhabited tion and erosion problems, the drying up of lakes, disrup- by poor and marginalized people (MOIT 2011). Positive tion of fish migration, and impacts on other water users impacts on the local socioeconomy include provision of as potential problems associated with SHP . employment and improved road infrastructure that pro- vides market access for agricultural products. In some Another pending issue is with the safety of small dams. On cases hydropower developers voluntarily support local May 28, 2013, the Science, Technology, and Environment communities by upgrading schools and irrigation facili- Committee of the National Assembly (STECNA) reported ties, providing agricultural extension training, and award- the results of the first inspection of the implementation ing scholarships. of hydropower development law and policy. The safety Small-Scale Hydropower Development in Vietnam 5 evaluation report showed that supervision of  OWERHOUSE AT NGOI XAN 1 SMALL-SCALE HYDROPOWER PHOTO 2.1 P the design and construction of a number of PLANT small to medium-size hydropower projects is still not in compliance with applicable regula- tions. Investors have a high degree of auton- omy, while the experience and skills of the workers are constrained. Small projects typi- cally lack experienced and professional work- ers. Some of the projects do not comply with quality and safety regulations. STECNA has advised the National Assembly to improve the management model and create unified management regulations and an organization to be responsible for the operation of reser- voirs and the safety of the dams. To facilitate the development of SHP the government of Vietnam has received a loan from the World Bank for the Renew- able Energy Development Program (REDP). © Deltares/World Bank. Used with the permission of Deltares. Further permission REDP’s objective is to increase electricity required for reuse. supply to the national grid from renewable energy sources on a commercially, environmentally, and MOIT approved a national plan for SHP in 2005. Each socially sustainable basis. The loan provides a refinanc- DOIT is responsible for SHP development at the provin- ing facility for loans made by REDP participating banks cial level based on the national plan. MOIT approves the to developers of renewable energy projects. Develop- provincial-level plans. ers of SHP projects can borrow up to 80 percent of the total financing required for construction (the remaining Several regulations and decisions are applicable to the 20 percent is to come from shareholders). Of the 80 per- environmental and social aspects of SHP development. cent loan, 80 percent can be provided through the REDP Before implementation of Decree 29/2011/ND-CP dated facility, and 20 percent is a credit from the participating April 18, 2011, on SEA, environmental impact assess- bank itself at commercial interest rates. The Ministry of ment (EIA), and environmental protection commitment Industry and Trade (MOIT) has been assigned to coordi- (EPC), the environmental impacts and social aspects nate REDP implementation and gives formal approval for were covered in each SHP project’s preliminary plans. proposed projects. REDP also has a technical assistance Government regulation requires either an EIA (including and capacity-building facility to assist participating banks social aspects) or an EPC, depending on the type and and project developers in the preparation, appraisal, and scale of each hydropower project. implementation of SHP projects (PMB 2009). In accordance with Decree 29/2011/ND-CP , the national plan contains the locations with hydropower potential Current Small-Scale Hydropower and also involves an SEA. For the SEA, MONRE is to Planning establish a commission in which other ministries, such as MARD, are to be represented. Depending on the size The current planning process for SHP development of the hydropower project, the following are required: involves many different agencies. Key players are the Provincial People’s Committees (PPCs), three minis- • An EIA for projects with total reservoir storage vol- tries—Industry and Trade (MOIT), Agriculture and Rural ume of more than 100,000 cubic meters or power Development (MARD), and Natural Resources and Envi- capacity greater than 1 MW. The EIA needs to be ronment (MONRE)—their provincial counterpart depart- approved by MOIT, except for projects with a volume ments (DOIT, DARD, and DONRE), Electricity Vietnam of more than 100,000,000 cubic meters, which need (EVN), and several research and consultancy institutes to be approved by MONRE. (Energy Institute, Power Engineering Consulting Joint • An EPC for projects with total reservoir storage Stock Company, and others). The process can be divided volume of less than 100,000 cubic meters, which into 11 steps (table 2.2). needs to be approved by the PPC. 6 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 2.2 STEPS IN SMALL-SCALE HYDROPOWER PLANNING Step Conducted by Activity Approval 1. Water resource potential • Water management agency • Build database on water MARD study and MARD resource balance by river • Hydrometeorology and basin MONRE • Collect data on hydro • Energy Institute and EVN regime • MOIT • Check available data on hydro potential of river 2. Study of hydropower • EI of EVN • Identify most likely potential locations of hydropower projects on rivers 3. Prepare hydropower • EVN EI, PECCs • EVN and MOIT draft power Government, PPC, MOIT components in PDP • DOIT, PPC, MOIT development strategy and PDP • DOIT and PPC develop provincial PDP 4. National SHP • PECC1, MOIT • Prepare SHP plan for MOIT Vietnam 5. Provincial SHP • EI, Institute of Water Prepare SHP plan for DOIT, PPC, MOIT Resource Planning, and provinces institutions 6. Prefeasibility study for • Funded by investor, Produce prefeasibility report DOIT, PPC individual projects conducted by EVN EI, on project construction PECCs, and othersa 7. Feasibility study • EVN EI, PECCs, and others Produce feasibility report DOIT, PPC 8. Technical design • EVN, PECCs, and others Produce technical design Project owner report 9. Cost estimate • EVN, PECCs, and others • Develop investment • MONRE approval of EIA for • EIA team proposal large projects • Produce EIA report • MOIT approval of EIA for large and medium projects • PPC approval of EIA for small projects 10. Construction Construction company • Construction of reservoir, Project owner, supervisor dam, roads, transmission lines, pipelines, canals, resettlement areas 11. Operation Hydropower plant Power generation, water management board management, maintenance Source: Adapted from Suhardiman, de Silva, and Carew-Reid (2011). Note: DOIT = Department of Industry and Trade; EI = Energy Institute; EIA = environmental impact assessment; EVN = Electricity Vietnam; MARD = Ministry of Agriculture and Rural Development; MOIT = Ministry of Industry and Trade; MONRE = Ministry of Natural Resources and Environment; PDP = Power Development Plan; PECC = Power Engineering Consulting Joint Stock Company; PPC = Provincial People’s Committee. a. Consulting studies are also provided by Water Resources University, Institute for Hydropower and Renewable Energy, Thuy Loi Transferring Technology and Consultant JSC, Investment Company Shares and Energy Development Vietnam, HECC Construction Technology and Hydroelectric Consulting Corporation, Center of Transferring Technology and Consultant Energy, Consultancy Company of University of Civil Engineering, and Consultancy Company Song Da. Small-Scale Hydropower Development in Vietnam 7 Decree 112/2008/ND-CP (October 2008) is an impor- Several other agencies are critical at key stages of the tant legislative document that stipulates the sustainable hydropower master plan and project processes at all development of reservoirs with due account for all water levels. The National Power Transmission Corporation is users and functions, including environmental flows particularly important in small projects for ensuring con- downstream of the reservoir. This requirement is reiter- nection to the national grid through input and investment ated in the Law on Water Resources in which the main- in transmission line connections. The Electricity Regula- tenance of a minimum flow is required under Articles 53 tory Authority of Vietnam, established under MOIT, plays and 54. An overview of relevant decisions and decrees is an important role in the project investment phase by given in box 2.1. setting the price that EVN pays to generators, licensing operators, and facilitating power buying and selling con- If a river basin crosses provincial boundaries, the differ- tracts. It also plays a role in appraising provincial power ent provincial DOITs will need to cooperate, which may development plans (Suhardiman, de Silva, and Carew- lead to conflicts of interest and delays due to a more Reid 2011). complicated planning process. Private companies can propose a plan to construct and Management and Operation operate a single or a series of SHP plants. The DOIT assesses the plan from a technical standpoint and Hydropower companies manage and operate the cas- advises the PPC. The PPC provides formal approval of the cade and its hydropower plants. They work according plan for construction and operation. The EIA or EPC pro- to operating rules that are approved either by MOIT or cess is required to be implemented according to Decree by the PPC. For instance, the operating rules for Nam 29/2011/ND-CP . Chien 2 are set forth in MOIT Decision 4385/QD-BCT BOX 2.1 REGULATIONS AND LEGISLATION REGARDING HYDROPOWER DEVELOPMENT IN VIETNAM • Decision 95/2001/QD-TTg (Prime Minister), June 22, 2001: Approval for electricity development planning from 2001 to 2010, taking into account needs through 2020. • Document 923/CP-CN (Government), August 6, 2002: Prime minister entrusts Ministry of Industry with the approval process for planning on small rivers that are not included in national hydropower planning. • Decision 3454/BCN (MOIT), October 18, 2005: Approval for small-scale hydropower planning. • Decree 112/2008/ND-CP (Government), October 20, 2008: Prescribes the management, protection, and inte- grated exploitation of resources and environment of hydropower and irrigation reservoirs. • Decree 120/ND-CP (Government), December 1, 2008: River Basin Management. • Decree 41/2010/TT-BCT (MOIT), December 14, 2010: Method for Electricity Price Identification (for hydropower projects with capacity greater than 30 MW). • Decision 1208/2011/QD-TTg (Prime Minister), July 21, 2011: Approval for electricity development planning from 2011 to 2020, taking into account needs through 2030. • Circular 43/2012/TT-BCT (MOIT), December 27, 2012: Regulation for planning, investment in, and operational management of hydropower projects. • Law No. 17/2012/QH13 on Water Resources: Management, protection, exploitation, and use of water resources, as well as the prevention of, combat against, and overcoming of harmful effects caused by water. 8 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades  AM CHIEN 1 HYDROPOWER PLANT PHOTO 2.2 N With respect to the river sub-basins belonging to the Red RESERVOIR LAKE River Basin it is important to mention the existence of Red River Basin Organizations. Their main objective is to improve integrated river basin planning by developing plans, monitoring implementation of those plans, and promoting coordination between sectors and administra- tive levels. Note 1. GIZ wind energy project, http://www.renewableenergy.org.vn accessed October 2012. References © Deltares/World Bank. Used with the permission of Deltares. Further permission required for reuse. Bakken, T.H., H. Sundt, A. Ruud, and A. Harby. 2012. ”Devel- opment of Small versus Large Hydropower in Norway – of September 2009. In addition to rules for hydropower Comparison of Environmental Impacts. ” Energy Procedia generation, the decision also covers flood mitigation, 20: 185–99. dam safety, and minimum flows. The following persons and organizations are responsible for implementing the MOIT (Ministry of Industry and Trade). 2011. “Strategic Environ- decision: mental Assessment of the National Plan for Power Devel- opment for the Period 2011–2020 with Perspective to • Chairperson of the Son La PPC 2030,” (PDP VII) (with comments from the appraisal com- • Chief of the Ministerial Office mittee in the meeting on April 16, 2011) Hanoi. • General Inspector of the Ministry Nguyen, Nhan T., and Minh Ha-Duong. 2009. “Economic Poten- • Directors of the Ministry Departments tial of Renewable Energy in Vietnam’s Power Sector. ” • Chairperson of the Son La Provincial Steering Com- Energy Policy 37 (5): 1601–13. mittee for Flood and Storm Prevention and Control and Rescue PMB (Project Management Board). 2009. “Operations Manual • Director General of the Northwest Energy Invest- Renewable Energy Development Project, Vietnam.” Pre- ment and Development Joint Stock Company. pared by the Project Management Board, Ministry of Industry and Trade, Hanoi. With regard to the management of the river basin and Suhardiman, D., S. de Silva, and J. Carew-Reid. 2011. “Policy sub-basins as a whole, the PPCs are administratively Review and Institutional Analysis of the Hydropower Sec- responsible for daily activities, including the operation of tor in Lao PDR, Cambodia and Vietnam. ” Mekong (MK1) its assets. DARD manages provincial structures such as Project on Optimizing Reservoir Management for Liveli- irrigation dams and canals and drainage infrastructure. hoods, Challenge Program for Water and Food. Interna- DONRE manages environmental, water, natural, land, tional Water Management Institute, International Centre and mineral resources. The daily operation and manage- for Environmental Management, and CGIAR Challenge ment of irrigation and drainage projects is often executed Program on Water and Food. by irrigation and drainage management companies, overseen by DARD. Such companies operate water dis- Tohoku Electric Power Co., Inc. and Engineering and Consult- tribution systems down to the point at which water is ing Firms Association, Japan. 2010. “Preliminary Study delivered to a “district. ” on Small-Medium Sized Hydropower Development under Build-Lease-Transfer Scheme in Vietnam.” 3 Descriptions of the Small-Scale Hydropower Cascades The six studied rivers are situated in the northwestern Each of the six basins contains a cascade of several mountainous part of Vietnam: Ngoi Xan and Nam Tha in small-scale hydropower plants with power capacities Lao Cai Province; Nam Hoa, Nam Chien, and Sap in Son ranging from several to 32 megawatts (MW) (table 3.1). La Province; and Pho Day in Tuyen Quang Province (map A medium-large hydropower plant—Nam Chien 1—is 3.1). All rivers are part of the Red River Basin, except for also under construction, with 200 MW capacity. The 29 Nam Hoa, which is part of the Song Ma River. small-scale hydropower (SHP) projects all together will MAP 3.1 OVERVIEW MAP OF THE SIX STUDIED CASCADES 9 10 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 3.1 OVERVIEW OF STUDIED RIVERS AND SMALL-SCALE HYDROPOWER PROJECTS Number of small-scale hydropower projects Total future maximum installed capacity River Operational Under construction a Planned Total (MW) Chien 2 1 0 3 54 + 200b Nam Hoac 0 2 0 2 26 Nam Tha 1 3 5 9 58.9 Ngoi Xan 3 2 1 6 53.7 Pho Dayc 0 1 1 2 21 Sap 1 4 3 8 63.4 7 13 10 30 256 + 200 a. As of April 2013. b. Nam Chien 1. c. Not included in the detailed analysis. Source: World Bank. have only slightly more capacity (256 MW) than Nam Seven projects fall under the Renewable Energy Develop- Chien 1. A comparison of the multiple impacts from the ment Program for financing: Sung Vui and Can Ho (Ngoi 29 SHP projects with the impact solely from Nam Chien Xan River), Nam Tha 4 and 5 (Nam Tha River), Nam Hoa 2 1 can provide useful insights into the cumulative impacts (Nam Hoa River), Pa Chien (Chien River), and Hung Loi 1 of SHP cascades (see chapter 5). and 2 (Pho Day River). Another four projects are currently FIGURE 3.1 SCHEMATIC PROJECT LAYOUT OF NAM CHIEN 2 26.7 hectares Intake National electricity grid Upstream r voi ser Tunnel Re Pressurized well 110 kilovolts 6 km Pen Dam stoc k Chien stream Powerhouse 32 megawatts Discharge channel Source: CDM 2008, Project Design Document Nam Chien 2, CDM Executive Board. Descriptions of the Small-Scale Hydropower Cascades 11 under review by the Vietnamese authorities. The remain- PHOTO 3.1 NAM THA 6 DAM der of the 29 projects are financed through various public or private sources. The hydropower plants all have virtually the same layout, as shown in figure 3.1. All plants divert water from the river to the powerhouse by channel, tunnel, and pen- stock. In most cases, the rivers are diverted over sev- eral kilometers. The generated electricity is supplied to the national grid through transmission lines. Most dams also involve a reservoir, although most reservoirs are quite small in volume compared with mean annual runoff and capable only of daily regulation (providing power for peak needs). The projects also include the construction of new roads and auxiliary resources, such as a power- © Deltares/World Bank. Used with the permission of Deltares. Further house, a transmission station, and other facilities. Most permission required for reuse. of the cascades have dams in series, except for Ngoi Xan where some of the plants are placed in parallel on two contributing streams (figure 3.2). FIGURE 3.2 CROSS-SECTION AND PLAN VIEW OF NGOI XAN CASCADE z=554m z=294m m asl 1,000 z=110m Ngoi Xan 900 cascade 800 z=95m Power 700 Station (PS) 600 Dam 500 400 NOT TO SCALE 300 z=80m 200 100 0 Source: World Bank. Note: Dams not to scale; z = altitude in meters above mean sea level. 4 Approach, Methods, and Definitions Overall Approach joint operation, joint sediment management, and envi- ronmental flow releases. Because practically all plants The approach to the study of the small-scale hydropower have daily peaking, the models used to study these (SHP) cascades consisted of data collection, field visits, issues have time steps of hours. At the provincial level desk study, and the application of a number of assess- the types of decisions include SHP cascade design, ment methods and simulation models. The modeling river basin management, and associated water alloca- approach was chosen based on the type of decision tion issues. Thus, a water balance model that works with making and issues relevant for three different end users: daily time steps is sufficient. For the national policy- (1) operators and developers of SHP , (2) planners and making level a daily model was used to provide insight regulators of SHP, and (3) policy makers (table 4.1). For into long-term issues such as climate change and envi- the hydropower operators the most important issues are ronmental flow legislation and regulation. The general TABLE 4.1 END USERS OF THE STUDY Main end-user groups Type of decision Issues Modeling approach Time step Operators and • Design • Operation optimization Short-Term Hydro Operation Days, hours developers • Operating rules and including joint operation Planning model; Powel maintenance • Sediment management Sim (a computer program • Environmental flow releases for short-term hydropower planning) Planners and • Cascade design • Provincial SHP planning Water balance model Days regulators • River basin • Mitigating and preventing management cumulative impacts according to strategic environmental assessment • Water allocation • Environmental and social monitoring Policy makers • Long-term planning, • Climate change Water balance model Days market, and others • Market liberalization • Legislation • Environmental flow regulation Source: World Bank. Note: A more detailed overview of responsibilities for SHP planning is given in table 2.2. 13 14 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades FIGURE 4.1 FLOW CHART OF STUDY ACTIVITIES Inception Phase Screening Phase Detailed Analysis Phase Objectives and Boundary conditions Water balance analysis scoping Field visit to Spatial and temporal boundaries all cascades Flow regime between dam and powerhouse Valued ecosystem components October 2012 Flow regime below powerhouse Effects of environmental flows on flows and power generation Effects of climate change on flows Work plan Data collection and power generation Including Hydrology Time planning Sediment samples Consulting agreements Water quality (samples) Hydrological analysis Sediment dynamics Field trips Demography and socioeconomy Daily discharges under Sediment transport capacities natural conditions Sediment trapping in reservoirs Irrigation demands Environment and land use Riverbed changes Hydropower designs Institutional arrangements Cumulative impact assessment Planning procedures Cause – impact – receptor Screening pathway model Preliminary sediment analysis Preliminary impact assessment Operation and maintenance Daily optimization Joint operation Joint sediment management Inception Report Screening Report Final Report Meeting with Inception Workshop Meetings with World Bank and Ministry of Industry Hydropower Operators Final Workshop June 21, 2012 and Trade Workshops and Consultations September 2013 March 13, 2013 Source: World Bank. work flow of the screening and detailed analysis is Hydrology depicted in figure 4.1. The main objective of the hydrological analysis was to assess the natural water availability in the various rivers Screening on which the SHP plants are located. Time series of daily discharge were generated, either based on historical During the screening phase all relevant data on the series or representing as closely as possible the hydro- hydropower projects as well as on river basin characteris- logical conditions in the basins and sub-basins. Series tics were collected. Sediment samples and water quality were produced for both the main river and for locations samples were collected during field visits to each of the between control structures such as the reservoirs and river basins. Boundary conditions for the analysis were powerhouses. defined with respect to geographical area, time horizons, and valued ecosystem components (VECs). The screen- For three cascades (Ngoi Xan, Sap, and Pho Day) rain- ing itself consisted of a preliminary analysis of sediment fall-runoff modeling was applied, using the Hydrologic dynamics and a semi-quantitative preliminary impact Engineering Center–Hydrologic Modeling System in assessment. After the screening phase four cascades combination with Watershed Modeling System software were selected for the detailed analysis phase. to derive the basin boundaries and drainage pattern. Approach, Methods, and Definitions 15 Discharges for the other three cascades (Nam Tha, Nam Sediment Dynamics Hoa, and Nam Chien) were derived from daily series measured inside the same basin, with a transposition The water balance results served as an essential input factor. for assessing the effects of the dams on sediment dynamics. A modeling approach was set up using the river topography, sediment yield from the watershed, Water Balance Analysis sediment transport, reservoir sedimentation, and river- bed morphology and composition. Based on an estima- A water balance was constructed for the four cascades tion of natural sediment yields from the catchment areas studied in the detailed analysis phase, simulating the daily and using the changes in river flows, sediment-transport flows between the dam and powerhouse, and down- capacities were analyzed for all river segments in the cas- stream of the powerhouse of each SHP plant. The results cade. In combination with estimated sediment trapping of the water balance were used to assess the effects in reservoirs, potential sediment undersupply or overload of the hydropower generation on the river flows, as well was calculated for the river segments. as to analyze various levels of environmental releases on flows and annual power generation. The water balance The main sources of data included those reported from included any other water demands in the catchment, SHP project documents, field observations (bed compo- such as for irrigation. The water balance model was also sition, elevations using global positioning system), maps, used to study the impact of a change in precipitation due and Space Shuttle Topographic Mission data. These data to climate change on river flows and power generation. are not highly accurate, but are sufficiently reliable for the intended analyses. Inflowing terms of the water balance included (1) daily discharges resulting from the hydrological analysis, (2) outflows from upstream dams and powerhouses, (3) Network Approach for Cumulative additional runoff from the relevant catchment area, and Impacts (4) irrigation demand (negative) for the upstream catch- ment area. Outflowing terms of a reservoir included (1) The cumulative impact analysis used a systematic pro- environmental flow releases from the dams (if any), (2) cedure for identifying and evaluating the significance discharge into the turbine for electricity production, and of effects from multiple activities that stem from the (3) spills if maximum levels are exceeded. The reservoir SHP cascade system itself and any other developments water balance was calculated with daily time steps for (including plans and policies) in the past, present, and the time series available. Within-day variation was there- future. The analysis was based on a network methodol- fore not included, but was analyzed separately using the ogy that identifies causes, impact pathways, and conse- optimization models (see section on optimization model- quences, that is, cause-and-effect chains from drivers ing in this chapter). Evaporation, precipitation, and infil- and stressors to receptors (or VECs). VECs and boundar- tration on or from the reservoir were omitted because ies are defined below. The network approach links activi- these values are assumed to be quite small (most reser- ties and impacts on both the land (including the terrestrial voir areas are smaller than five hectares). ecosystem) and in the river (including the aquatic eco- system). The main land-riverine interactions are outlined Power generation was calculated per time step (day) in box 4.1. by taking into account head loss due to friction and efficiency of the turbine, depending on the type of turbine. The model was validated by comparing the What Are Cumulative Impacts? modeled annual energy generation with the estimated Cumulative impacts are impacts that result from incre- energy generation listed in the SHP design documents. mental changes caused by other past, present, or rea- A high correlation (R2 = 0.997) between the model sonably foreseeable actions together with the project results and the specifications from the SHP developers (Walker and Johnston 1999). Assessing cumulative was found. impacts requires more than just adding up all impacts from individual projects or developments. Sometimes the total effect is larger than the sum of individual impacts because each project, as well as each impact, can interact with the others. 16 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades BOX 4.1 LAND AND WATER INTERACTIONS IN RIVER BASINS Human processes shaping land and water use within a river basin affect its geophysical processes, such as water quantity and quality as well as erosion, and thus affect the riparian and aquatic ecosystems (Loucks, Bain, and Pen- dall 1999). Consequently, the amount of, and rate of change in, forested areas versus agricultural and urban areas affects these parameters. In three of the study basins (Ngoi Xan, Chien, and Sap) this change occurred largely before development of the SHP cascade, albeit in Ngoi Xan and Chien especially, the cascade exacerbates the impact. In Nam Tha, most of the cascade development is within pristine forest areas so the land use change stems mainly from the SHP cascade development. As a general rule of thumb (derived from Loucks, Bain, and Pendall 1999), an acre of foresta yields, on average, 12 per- cent of the precipitation falling on that land as surface runoff, and negligible soil is lost. An acre of typical agricultural land, like a corn field, yields 42 percent of the precipitation as runoff, and this surface flowing water typically carries away 73 tons of soil per year with the associated nutrients, fertilizers, chemicals, and animal waste. Urban land yields even greater runoff (Dunne and Leopold 1978). The rerouting of water overland due to different developments in river basins can, therefore, change stream flow or hydrological regime affecting the flow variability and the magnitude and frequency of floods. Furthermore, the rerouting of water by changes in FIGURE B4.1.1 SAMPLE HYDROGRAPHS land use causes very rapid movement of water and pollutants to streams. Figure (centimeters per hour) Rainfall B4.1.1 illustrates the change in stream Rainfall flow regime, showing the effect of a rainfall event in natural and agricultural settings. In addition to greatly elevating stream flow peaks, rapid surface run- off diminishes groundwater levels that maintain the base flows of streams. This effect can greatly disturb the stream (cubic meters per second) channel, stream hydraulics, water qual- Altered hydrograph Streamflow ity, the riverine habitat, and the aquatic Natural hydrograph and riparian ecosystems. The ecologi- cal integrity and complexity of flowing water systems depend on their natural dynamic character. Deviations from the 06 12 18 06 12 18 06 12 natural flow regime can therefore impair Day noon (6:00 pm) Day noon (6:00 pm) Day noon 1 2 3 water quality, ecosystem functions, and Time (days and hours) characteristics of aquatic and riparian environments (Poff and others 1997). Source: Bain and Loucks 1999. Note: Two storm event hydrographs showing a stream flow response to rainfall in a. There are, of course, differences between vari- settings dominated by surface runoff from land in human use (altered hydrograph) and ous forest systems. undisturbed land (natural hydrograph). However, one project added to another can also lead • Strictly additive: The sum of the individual impacts to less severe cumulative impacts than expected: from the project(s) and other actions equals the total for instance, the construction of a second reservoir impact. upstream of a dam can reduce the sedimentation rate of • Synergistic: The total impact is more than the sum of the downstream reservoir, thereby lengthening its use- the individual impacts of each project. able lifetime. • Antagonistic: The total impact is less than the sum of the individual impacts of each project. Cumulative impacts can occur through different interac- tive pathways (Bain, Irving, and Olsen 1986). Three basic Figure 4.2 illustrates the effect of these different interac- interactions can be discerned: tions on the overall total impact. The solid line denotes Approach, Methods, and Definitions 17 Cumulative impacts can also be related to passing cer-  CHEMATIC REPRESENTATION OF FIGURE 4.2 S tain threshold levels. For instance, some habitat loss CUMULATIVE IMPACTS would not have a large impact on wildlife. But when a 6 certain threshold is passed, the entire population can be Additive wiped out because the habitat becomes too fragmented 5 Synergistic (figure 4.3). Antagonistic 4 So cumulative impacts can occur in the following Impact 3 conditions: 2 • Under strictly additive, synergistic, or antagonistic 1 interactions between projects and actions 0 • When the sum of the impacts exceed a threshold 1 2 3 4 • When individual impacts interact creating previously Number of projects unforeseen impacts Source: World Bank. • When impacts of multiple interventions are larger than the impact of a single intervention that meets the same objective as the multiple interventions a strictly additive effect: the impact of two projects is together twice the impact of one. The dash-dot line shows the synergistic cumulative effect: the net effect is more than An example of the latter is when the total impacts of a the sum of its constituents. The dashed line shows an cascade of small-scale hydropower plants exceed those antagonistic cumulative effect. Note that the cumulative that would have occurred with a single dam with the impact does not become smaller as more projects are same capacity. added to a cascade configuration (that is, more projects do not mean less impact). Even in an extreme antagonis- This report analyzes the full range of cumulative impact tic case, the total cumulative impact does not decline as pathways using a network approach,1 together with con- more projects are added: the total impact of two projects sultation with and questions to stakeholders, to look is still more than of one project. more deeply into the relationships between the causes, FIGURE 4.3 LANDSCAPES WITH HIGH (A) AND LOW (B) DEGREES OF CONNECTIVITY Source: Loucks and van Beek 2005. 18 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades FIGURE 4.4 GENERIC CAUSE-EFFECT NETWORK FOR CASCADES Causes Primary impacts Riverine activities Pollution (resource extraction) Secondary impacts Receptors Water quality change Valued fauna Industrial/agricultural Flow regime change development Habitat fragmentation Valued flora River diversion Irrigation extraction Loss of connectivity Flow regulation ability Land take Small-Scale Loss of land Hydro Project Soil protection ability Land use change Loss of vegetation Small-Scale Hydro Project Reservoirs B++ Economic investment Peak and decreased flows Riverbed/column Forest extraction Erosion and sedimentation Government and private revenues Change in customs and traditions Improved infrastructure Improved job opportunities Source: World Bank. impacts, and VECs. This approach delves into more detail 2. Primary Impacts: Direct, often physical, impacts of within and across the cumulative impact pathways. the project. For SHP development the most impor- Inputs to the cumulative impact assessment were also tant primary impacts are defined as (1) flow regime derived from water balance modeling and from the sedi- change, (2) river diversion, (3) land take, (4) land use ment transport analysis. change, and (5) economic investment. Irrigation water demand and forestry extraction, if present, impose additional effects on some of these primary How Were Cumulative Impacts Assessed? impacts (portrayed in 4.4), while instream resource The generic impact network used for all cascades is extraction and industrial and agricultural activities depicted in figure 4.4. The main components of the net- introduce an additional strong primary impact—pol- work are explained as follows: lution—that interacts with the rest of the impact pathway. 1. Causes: Stressors or drivers that impact the environ- ment at large. For the studied cascades the most 3. Secondary impacts: Effects of the primary impact. important and relevant stressors are (1) the occur- Secondary impacts, in turn, impose effects on the rence of more than one SHP—the fact that it is a receptors. For an SHP project, the most important cascade system; (2) water demand for irrigation; and relevant secondary impacts are defined as (1) (3) forest extraction; (4) riverine activities (resource water quality change, (2) habitat fragmentation, (3) extraction) and; (5) industrial and agricultural loss of connectivity (see box 4.2), (4) loss of land, activities. (5) loss of vegetation, (6) reduced flows (in the river Approach, Methods, and Definitions 19 BOX 4.2 THE IMPORTANCE OF CONNECTIVITY IN RIVERS River basin connectivity is affected by dams and associated works, either as the result of direct dam impoundment or of ecosystem and forest clearing. Dams affect connectivity laterally, longitudinally, and vertically (Stanford and Ward 2001). Superimposed on these three space dimensions is the impact on ecological processes and functions in time (Ward 1989). Connectivity affects both ecosystem (functions and community structure) and population dynam- ics (migration, dispersal, fragmentation, and so on). Connectivity is illustrated in figure 4.3. Healthy ecosystems depend on connectivity and also on the width of corridors. Thus, connectivity is a measure of how spatially continuous a corridor or a matrix is (Forman and Godron 1986); width is the distance across the stream and its zone of adjacent vegetation cover. A stream corridor with connections among its natural communities pro- motes transport of materials and energy and movement of flora and fauna (Loucks and van Beek 2005). The connectivity issue relates especially to the potential population fragmentation, imposed by the dams, of the various fish species in the studied river basins. Fragmentation is related to both the downstream dispersal and the upstream migration of adult fish. Fragmentation of the adjacent terrestrial and riparian ecosystems may occur from the construction of roads, transmission lines, and other hydropower-related infrastructure. stretch between dam and powerhouse within the are affected by changes in water quality, habitat frag- cascades) and peak flows (within and downstream mentation, connectivity, and peak and decreased flows. from cascades), (7) erosion and sedimentation, (8) Flows even have a feedback loop on water quality (not change in customs and traditions, (9) improved infra- portrayed in the pathway framework) that can further structure, and (10) improved job opportunities. exacerbate the negative impact on the ecosystem. 4. Receptors: In this study, receptors and VECs are defined in the widest sense of the term (see the Definition of VECs next section and table 4.2 for a description). For an SHP project the most important receptors are (1) The term VEC emerged, although with different word- valued fauna (for example, important wildlife and ing, in Beanlands and Duinker (1983). In most literature, aquatic species as well as species for consumption), VECs are primarily conceived to be “environmental attri- (2) valued flora (important forest products2), (3) the butes” selected because of social, economic, aesthetic, ecosystem’s flow regulation ability (or service), (4) or scientific concerns (Olangunju 2012). This biophysical the ecosystem’s soil protection ability3 (or service), emphasis has been observed by a number of researchers (5) reservoirs,4 (6) riverbed and water column, (7) (Szuster and Flaherty 2002; Bérubé 2007; Noble 2010) project-affected people (PAP), and (8) government and has primarily shaped the understanding of VECs in and private revenues. impact assessment, although different definitions are used depending on the context and jurisdiction of use. In Note that the economic investment pathway leads to contrast, some authors (for example, Shoemaker 1994; positive impacts. Reduced erosion and sedimentation Coffen-Smout and others 2001) suggest the scope of due to river diversion by an upstream reservoir will also VECs should extend beyond ecological issues to include be potentially positive for downstream reservoirs (less social, economic, cultural, and natural components of the filling) while potentially negative for the riverbed and environment (Olangunju 2012). water column. These impact pathways are thus both positive and negative. All other pathways are negative. During the screening phase, all possible impacts were The economic investment pathway can potentially offset listed, a selected number of which were included for negative impacts to some degree (from land take and detailed analysis because of their possible cumulative change in customs) on PAP as portrayed in figure 4.4. impacts (see table 5.1). Based on this selection and on thematic data, previous studies, and field observations, Various impact pathways can even have a concerted or the VECs were defined using the biophysical approach aggregated impact on a single receptor, even with only to undertake a relative ranking of impact. However, in one SHP plant in place. For example, from figure 4.4 it the detailed study the VECs were expanded to include can be deduced that aquatic fauna (various fish species) social, economic, and cultural components following the 20 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 4.2 VALUED ECOSYSTEM COMPONENTS VEC Description Examples Valued fauna Wild animals (including fish), valued for economic Clouded Leopard in Ngoi Xan basin. The fish species reasons or high biodiversity value (threatened Spinibarbus hollandi in the Chien basin. (Populations species). have declined due to over harvesting. This species is used as an indicator for ecologically healthy rivers.) Valued flora Forest and plant species and products valued for Rare, precious, and socially and economically economic, medical, food, or high biodiversity reasons. important species can be found in all four basins. Rare and precious species are especially prominent in the Nam Tha basin with its pristine forest areas. Ecosystem’s The ability of the ecosystem to regulate rainfall The dense pristine forest in the upper part of the Nam flow regulation runoff in a watershed. It is a function of forest and Tha cascade has high value related to ecosystem flow ability vegetation cover and quality, topography, as well as regulation ability. soil water permeability and water storage capacity. Ecosystem’s The ability to protect the soils in a watershed from The dense pristine forest in the upper part of the Nam soil protection erosion. It is a function of forest and vegetation cover Tha cascade has high value related to ecosystem ability and quality as well as topography. soil protection ability, which is of special relevance because of the steep slopes. Reservoirs The physical capacity of upstream reservoirs in a Ngoi Xan, Nam Tha, and Chien cascades all have larger cascade to store sediments and thereby reduce reservoirs upstream that trap sediment and bed load, siltation of downstream reservoirs. This has an positively affecting storage volumes of downstream economic value because it increases the life span of reservoirs. the cascade. This is a VEC in the widest sense of the term, using the approaches of Shoemaker (1994) and Coffen-Smouth and others (2001). Riverbed and This is a physical VEC at habitat and river reach The Nam Tha, Ngoi Xan, and Chien cascades all water column level, which also affects the riverine environment have reservoirs that significantly change sediment and river and water use by humans. As such it also transport, which alters the structure and dynamics of has biodiversity, social, and economic value. It is a the riverbed and water column.a function of flow regime, sediment transport dynamics, and topography. For instance, more erosion can lead to turbid waters, which can reduce the quality of drinking water. Project- This is a social and economic VEC that is primarily a In the Chien basin, loss of land is considered to be affected function of livelihood.b high. The negative impacts on the PAP are, however, people (PAP) largely counteracted by increased job opportunities and improved infrastructure. Government Economic investment leading to energy production, Positive impacts on this VEC are expected in all and private improved infrastructure, and improved job cascades, but somewhat less in Sap than the others revenues opportunities. mainly because of lack of coordination among multiple owners. Source: World Bank. a. A major result is that riverbeds become more homogeneous and less dynamic. The available ecological niches in the river will be reduced, eventu- ally affecting ecosystem composition and biodiversity (Petts 1984a, 1984b; Lillehammer and others 2009). b. See box 4.3 for definition and assets of livelihood. approaches of Shoemaker (1994) and Coffen-Smout and as the most important VECs. Forest and forest products others (2001). (especially from primary forest) are most frequently seen as important, followed by soil and erosion control and A questionnaire was developed for consultation with river water use, and wildlife and fish fauna. Table 4.2 stakeholders on the importance of VECs. Although only describes the VECs and gives examples from the studied a handful of questionnaires were completed, a general river catchments. picture can be drawn. Biophysical components are seen Approach, Methods, and Definitions 21 Impact Ratings and Interaction CONSTRUCTION OF PA CHIEN TUNNEL PHOTO 4.1  Coefficients In the detailed study impact ratings from 0 to 4 were used as follows (note that the impact can be both nega- tive and positive as discussed earlier): 0 = no impact 1 = low impact 2 = moderate impact 3 = high impact 4 = very high impact These impact values are set, throughout the impact © Deltares/World Bank. Used with the permission of Deltares. Further pathway, at primary and secondary impacts as well as permission required for reuse. at receptors for each of the projects in the cascades. The impacts were scored based on a combination of expert (flow regime change, peak and decreased flows, and the judgment (for example, on habitat fragmentation and like). The final score for each of the receptors and VECs loss of connectivity), assessment of importance of VECs is the sum of the scores in the secondary impact, with by the stakeholders (see definition of VECs), and mod- its pathways leading to it, divided by the actual number eling results derived from the water balance modeling of pathways affecting the VEC, so that the score remains BOX 4.3 DEFINITION AND ASSETS OF LIVELIHOOD Various definitions of “livelihood” have emerged that attempt to explain its complex nature. This report embraces the definition suggested by Chambers and Conway (1992): A livelihood comprises the capabilities, assets (stores, resources, claims and access) and activities required for a means of living: a livelihood is sustainable which can cope with and recover from stress and shocks, maintain or enhance its capabilities and assets, and provide sustainable livelihood opportunities for the next generation; and which contributes net benefits to other livelihoods at the local and global levels and in the short and long term. Livelihood assets can be categorized into the following five main groups (UNDP/IRP/ISDR 2005): 1. Human capital: Skills, knowledge, health, and ability to work 2. Social capital: Social resources, including informal networks, membership in formalized groups, and relationships of trust that facilitate cooperation and economic opportunities 3. Natural capital: Natural resources such as land, soil, water, forests, and fisheries 4. Physical capital: Basic infrastructure, such as roads, water and sanitation, schools, information and communica- tion technologies; and producer goods, including tools, livestock, and equipment 5. Financial capital: Financial resources including savings, credit, and income from employment, trade, and remittances SHP cascade development can have positive and negative impacts on livelihoods and thus on project-affected peo- ple (PAP). For simplicity, the focus in this study has been on two negative impacts—loss of land (natural capital) and changes in customs and traditions (human and social capital); and on two positive impacts—improved infrastructure (physical capital) and improved job opportunities (human and financial capital). Their impacts on PAP and their liveli- hoods are portrayed in figure 6.4. 22 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades between 0 and 4. Thus, the final score for each receptor is produced by the averaged sum of scores of the sec- BOX 4.4 INTERACTION COEFFICIENTS ondary impacts connected to the receptor through dif- ferent pathways. Finally, the cumulative impacts on the Two interaction coefficients can be selected to repre- VECs were evaluated as being synergistic, strictly addi- sent impact interactions between one project and any tive, or antagonistic, as defined above. In those cases other project in the SHP cascade configuration. In the in which a synergistic impact is expected, an interaction case of one pair of projects A and B, one coefficient coefficient is used in the calculation (see box 4.4). would represent the effect of A on B and another the effect of B on A. When the interaction is synergistic Figure 4.5 shows an example of the calculation of the the coefficient is positive and when antagonistic the cumulative impact on the valued fauna in the Nam Tha coefficient is negative. Normally, a reasonable coeffi- River. The final score of 3.36 is the result of five second- cient value range is between 2 (effect of A doubles the ary impacts: water quality change (score of 1), habitat impact of B) and 0 (effect of A negates the impact of fragmentation (4), loss of connectivity (4), loss of vegeta- B). An interaction coefficient of 1 indicates no interac- tion (3), and peak/decreased flow (2). The sum of these tion effect, for example, a strictly additive cumulative values is 14, which is divided by the number of pathways impact (based on Bain, Irving, and Olsen 1986) (5), giving a score of 2.8. However, because the impact on this specific VEC is considered to be synergistic at the cascade level, with an interaction coefficient set at 1.2, was not built. Most VECs were assumed to be subject the final score becomes 3.36 = 1.2 x 2.8. to strictly additive cumulative impacts, so no interaction coefficient was used. Furthermore, PAP are affected by Each of the secondary impacts is calculated similarly both positive and negative impacts, causing this VEC to based on the primary impacts, which, in turn, are based behave somewhat antagonistically. on the causes, according to the generic pathways (fig- ure 4.5). One of those pathways is highlighted in figure Based on the evaluation of the cascade projects in 4.5, showing the impact of the cascade on two primary the selected rivers, the following types of cumulative impacts leading to the secondary impact on habitat impacts on receptors and VECs were used: fragmentation. • Valued fauna: Synergistic with an interaction coef- The same approach was undertaken for all VECs in all ficient of 0.2.5 cascades, including a scenario in which the SHP cascade • Valued flora: Strictly additive.  XAMPLE OF CUMULATIVE IMPACT CALCULATION FOR NAM THA VALUED FAUNA SHOWING PATHWAY FIGURE 4.5 E FOR HABITAT FRAGMENTATION Impact Summed Number Cause Primary impacts score impact score of pathways Secondary impacts Receptors Instream activities Pollution 2 3 3 Water quality change 1 Industrial activities Flow regime change 1 8 2 Habitat fragmentation 4 Irrigation River diversion 4 4 1 Loss of connectivity 4 Forest extraction Land take 4 4 1 Loss of land 0 Cascade Land use change 2 6 2 Loss of vegetation 3 Economic investment 3 1 1 Peak/decreased flow 2 Erosion/sedimentation 0 Change customs 0 Improved infrastructure 0 Improved job opportunities 0 + Sum of impact scores 14 Number of pathways 5 Interaction coefficient 1.2 Final impact score 3.36 Source: World Bank. Approach, Methods, and Definitions 23 TABLE 4.3 DEFINITION OF CASES Case Name Description 0 Natural condition or reference case Besides the natural discharge, abstractions for irrigation are included 1 Base case or cascade without Case 0 plus all SHP plants as planned. However, because of the uncertainty environmental flow regarding environmental flows, no environmental flow requirements are included. 2 Environmental flow base case Case 1 + environmental flow releases according to existing information from dam operators 3 Environmental flow Q95 case Case 1 + Q95 releases for environmental purposes. The Q95 is determined separately for the wet (May–October) and the dry (November–May) seasons. The purpose of this analysis is to better understand the impacts on hydropower generation if releases from the dam to the river for environmental purposes are increased. 4 Climate change case Case 1 + changed inflows due to the A2 climate change scenario (used by MONRE according to the IPCC scenarios; see table 7 .2). Values for estimation of the percentage change in rainfall in 2050 are applied directly to the discharge series. Source: World Bank. Note: IPCC = Intergovernmental Panel on Climate Change; MONRE = Ministry of Natural Resources and Environment; Q95 = flow that is exceeded 95 percent of the time. • Flow regulation ability: Strictly additive. Boundaries and Scenarios Used • Soil protection ability: Strictly additive. in the Cumulative Impact Analysis • Reservoirs: Strictly additive (positive) for Sap cas- cade (long distance between the reservoirs) but syn- The character of this study is different from that of an ergistic for the others with an interaction coefficient official cumulative impact assessment, which would be of 0.1 (short distance between the reservoirs). executed ahead of time for a specific hydropower devel- • Riverbed and water column: Strictly additive for Sap opment plan for a large river and for which scenarios that cascade (long distance between the reservoirs) but include other sectors’ economic development would be synergistic for the others with an interaction coeffi- highly relevant. Instead, the focus here is on providing cient of 0.1 (short distance between the reservoirs). an impact and optimization study of SHP development • PAP: Antagonistic (both positive and negative sec- in cascades (see the section “Scope of the Study” in ondary impacts influence the receptor). The positive chapter 1). Because SHP plants are usually developed in and negative impacts are treated separately for the small mountainous catchment areas, they are most often primary and secondary impacts but summed for the small diversion plants with relatively small storage. The receptor. mountainous character means that sectoral competition • Government and private revenues: Strictly additive is generally low. Other functions are mainly related to for- (positive). estry, small-scale irrigation, and industrial or agricultural development, as well as resource extraction from the As mentioned earlier, biophysical components were river such as fishing and, to a lesser degree, mining. revealed in the stakeholder questionnaire to be the most important VECs. Forest and forest products (valued flora) Based on the above, the boundaries for the cumulative was the category most frequently regarded as important, analysis were defined as follows: followed by soil and erosion control (soil protection abil- ity), river water use (relates to both riverbed and water • Other development sectors: Forestry extraction, irri- column, and PAP), and wildlife and fish fauna (valued gation, industrial and agricultural activities, and river- fauna). ine resource extraction (mainly fisheries) • Temporal: Dependent on scenarios (see below) • Spatial: Variable, related to potential impacts on VECs (see below) 24 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 4.4 TEMPORAL BOUNDARIES Case Temporal boundary Approximate time scale Reference case Past Pre-2012 (and preconstruction) Base case Present and near future 2012 + 10 years (construction and operation) Environmental flow base case Present and near future 2012 + 10 years (construction and operation) Environmental flow Q95 case Present, near, and intermediate future 2012 + 20 years (operation) Climate change case Distant future 2012 + 40 years (operation) Source: World Bank. The cumulative impacts were studied under various hydro- Optimization Modeling logical and water balance conditions, which allowed for a comparison between the natural situation, the impact To assess whether joint operation could result in any of a cascade, the effect of environmental flows, and the improvement in operations or provide any other benefits, potential effects of climate change (table 4.3). The effect a comparison was made between each power plant max- of environmental flows was investigated under two dif- imizing its daily stand-alone revenues and maximizing the ferent cases: one with flow releases according to current revenues of the entire cascade on an annual basis. The practice (based on information from operating rules) and first situation is representative of today’s operating rules; one with a flow release of Q95.6 the second situation maximizes the revenues that could be obtained with complete knowledge of future river The choice of Q95 was an arbitrary one and used only to inflows over the year. illustrate the impacts on the flow regime and hydropower generation if releases from the dam to the river for envi- Natural flow series were used as input for the analysis ronmental purposes were to be increased. The various using two different models.7 scenarios lead to the different temporal boundaries that were set and investigated as part of the study, and are The simulation program Powel Sim was used to simu- portrayed in table 4.4. late the operation of a stand-alone project with existing operating rules, to maximize energy production within Note that the water balance model and its five selected the given operational boundaries. Powel Sim is a water- scenarios primarily feed into the flow regime change course simulator that is bound to follow a production impact pathway (figure 4.4). However, the temporal schedule hour by hour. It will follow this schedule as boundaries and time scales are assessed under the long as possible given the actual water inflow, remaining same conditions for the other impact pathways, for a water stored in the reservoir, and availability of power consistent approach. generating units. Finally, the temporal and spatial impact boundaries for The optimization model SHOP (Short-term Hydro Opera- the receptors and VECs were established as in table 4.5 tion Planning) was used for the ideal joint operation sce- and analyzed for each of the selected cascades (see also nario. SHOP is a deterministic optimizer for short-term Cooper 2004). hydropower planning. It is based on successive linear programming, uses CPLEX as the solver, and uses abso- As can be seen from table 4.5, the geographical bound- lutely certain information on inflows and prices for the aries vary according to the receptors and VECs. Tempo- whole year as input. SHOP also takes into account all the ral boundaries are uniform and relate to the time scales plants in a cascade and distributes the water and produc- applicable to the different cases. Finally, other causes, tion in an optimal way within the cascade to maximize its drivers, and stressors were identified (derived from fig- total hydropower revenue. ure 4.4) that can induce additional cumulative effects through cause-and-effect chains. Approach, Methods, and Definitions 25  ECEPTORS AND VALUED ECOSYSTEM COMPONENTS AND THEIR GEOGRAPHICAL AND TEMPORAL TABLE 4.5 R IMPACT BOUNDARIES Other causes, drivers, and Temporal boundary stressors possibly imposing Receptors and VECs Geographical boundary (linked to the cases in table 4.3) cumulative effects Valued fauna (wildlife and Catchment and sub-basin area Past, present, near-intermediate, Mining, industrial development, aquatic species) and distant future irrigation, and forest extraction Valued flora (for example, Catchment and sub-basin area Past, present, near-intermediate, Mining, industrial development, forest products) and distant future irrigation, and forest extraction Flow regulation ability Project area for cascade and Past, present, near-intermediate, Forest extraction upstream catchment and distant future Soil protection ability Project area for cascade and Past, present, near-intermediate, Forest extraction upstream catchment and distant future Reservoir (for small-scale Project area for cascade and Past, present, near-intermediate, Irrigation and forest extraction hydropower or irrigation) downstream irrigation weirs and distant future Riverbed and water Project area for cascade and Past, present, near-intermediate, Irrigation and forest extraction column downstream and distant future Project-affected people Communes within or Past, present, near-intermediate, None bordering project area and distant future Government and private Commune, district, and Past, present, near-intermediate, None economy province level and distant future Source: World Bank. In the optimizations performed on the studied cascades, no constraints were put on SHOP except basic water- 6. Q95 denotes a river flow that is exceeded 95 percent of the time. course model data such as turbine efficiency curves, res- 7. Because optimization programming requires substantial comput- ervoir curves, waterways, topology, and the like. Inflow ing time, the models were run for a representative hydrological year. statistics were given as input data along with prices. The A year was considered representative if the annual runoff was close to the mean annual runoff for the whole time series and if there was reservoirs in the specific watercourses were so small no extreme runoff (neither very dry nor heavy flooding). that no endpoint conditions were given, except for the large reservoir in the Nam Chien watercourse. Hence, no water values (expected marginal value of saving water References for later) were used for these cases. Bain, M.S., J.S. Irving, and R.D. Olsen. 1986. “Cumulative Impact Assessment: Evaluating the Environmental Notes Effects of Multiple Human Developments. ” Argonne National Laboratory, Energy and Environmental Systems 1. There are various assessment methods and tools for cumulative Division, Lemont, Illinois. impact assessment studies, including that outlined in World Bank (2012). Bain, M.B., and D.P. Loucks. 1999. “Linking Hydrology and Ecol- 2. Assessed to be the most important VEC by the stakeholders in ogy in Simulations for Impact Assessments. ” Proceed- the questionnaire. ings, National Conference of Water Resources Planning 3. Soil and erosion control is highlighted as important in the stake- and Management Division, ASCE, Tempe, Arizona, June. holder questionnaire. Beanlands, G., and P. Duinker. 1983. An Ecological Framework 4. Note that reservoirs as part of a hydro project are both a driver for Environmental Impact Assessment in Canada. Hali- (cause) and a receptor. fax, Nova Scotia: Institute for Resource and Environmen- 5. The impact on valued fauna is synergistic mainly because cascade tal Studies; and Hull, Quebec, Federal Environmental development exacerbates the impacts on migration and mobility of riverine and terrestrial animals. The impact on valued flora is additive Assessment Review Office. because the impact is mainly related to the extra land area taken by more than one project. 26 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades Bérubé, M. 2007 . “Cumulative Effects Assessment at Hydro- Olangunju, A.O. 2012. “Selecting Valued Ecosystem Compo- Quebec: What Have We Learned?” Impact Assessment nents for Cumulative Effects in Federally Assessed Road and Project Appraisal 25(2): 101–109. ” University of Saskatch- Infrastructure Projects in Canada. ewan, Canada. Chambers, R., and G. 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Introduction to Environmental Impact Assess- ment: Guide to Principles and Practice, 2nd edition. Don Mills, Canada: Oxford University Press. 5 Results of the Screening Phase Activities during the Screening Phase and their scale qualitatively assessed. Furthermore, tem- poral and geographical boundaries were determined for All six rivers were screened for potential significant the impact assessment.2 cumulative impacts; in the second phase, four of the rivers were studied in more detail. The results of the screening helped identify the level of detail needed for Preliminary Impact Analysis the in-depth analysis of the selected rivers. A preliminary analysis was conducted with respect to The screening phase started with a participatory work- physical, environmental, and social impacts. During this shop in which more than 50 representatives partici- analysis it became apparent that the small-scale hydro- pated.1 During the discussions valuable suggestions power (SHP) facilities under study were built in small and comments were provided with respect to the objec- mountainous catchment areas where the sectoral com- tives of and approach to the study, which in general was petition for water is often low and water use is usually supported. limited to small-scale irrigation (if present) and ecosys- tem services (such as fishing, flow regulation, and soil The provincial and district offices of various departments regulation). Of the 11 potential impact categories, 6 were were visited in the screening phase to collect reports selected for more detailed analysis in the next phase, and data. During field work, all river basins were visited because of their potential cumulative nature (table 5.1). to obtain first-hand observations on construction sites, existing dams, and surrounding environmental condi- The screening also showed that larger impacts were tions. Discussions were also held with operators, water found or expected within the cascade area as compared quality and sediment samples were taken from the riv- with downstream. The capacity of most reservoirs is ers, and local people were interviewed. small compared with mean annual flow volume. Hence, the flow regime downstream of the last powerhouse is A desk study was performed to identify and describe all comparable to the natural regime. However, because of existing and reasonably foreseeable investments, plans, peaking, the river’s daily flow fluctuations do increase. and activities (“stressors”) that have impacts on the river Similarly, changes in sediment dynamics are expected to flow regime or its water quality in the six rivers. Poten- occur downstream of the cascade. tial receptors of negative and positive impacts from the operation of the stressors were also identified, including The cascades exhibit significant differences with regard all valued ecosystem components that could be signifi- to the type of impact, as briefly discussed below. cantly affected. The nature of the impacts was described 27 28 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 5.1 SELECTION OF POTENTIAL IMPACTS Included in detailed Potential impacts Findings during screening analysis? Temporary Construction of the dam, tunnel, powerhouse, transmission lines, and the like requires No impacts during access roads, material mining, tunnel blasting, excavation, and dumping leading to temporary construction erosion, vegetation damage, and other effects. Mitigating measures to reduce these impacts to the extent possible are stipulated in the environmental management plans for each SHP plant and the effects are assumed not to lead to permanent, cumulative impacts. Impacts on grid Operation of the cascade may lead to instability of the power grid. This potential impact was No system not included because it was beyond the scope of the terms of reference for this study. Impacts on SHP cascades will generate renewable power with no greenhouse gas emissions; this No greenhouse gas power will displace part of the electricity otherwise supplied by fossil-fuel-fired power plants. emissions Although this positively contributes to global environmental quality, it does not influence cumulative impacts on a local or regional scale. Water quality All SHP plants have small reservoirs with very low residence times. Therefore stratification, Yes (reservoirs and eutrophication, or change in other water quality parameters is not expected to be significant, downstream) except for sediment transport (see sedimentation and erosion). Sedimentation and Cumulative impacts on sediment and erosion generally result from interference with the Yes erosion sediment balance of the river caused by dam construction and reservoir operation. Flow regime Dry season discharge will change significantly in most cascades because of peaking Yes change operations. Also, stream diversion is part of most SHP operations. Ecosystem SHP facilities and secondary effects may have a cumulative impact on flow regulation of the Yes services watershed and soil protection. Habitat SHP facilities and secondary effects may have a cumulative effect on habitat fragmentation Yes fragmentation and loss of connectivity for the terrestrial and aquatic environment. For the terrestrial and loss of environment this is related to land conversion while for the aquatic environment this is related connectivity to total length of the cascade as well as the number of individual projects and their diversions. Social implications: Very few people need to be resettled because the reservoirs are small and mostly in No Resettlement uninhabited remote areas. Social implications: Mostly ethnic minorities live in the project areas. These people typically depend on the forest Yes Livelihood and or capture fisheries for large parts of their livelihood. Therefore, the cumulative impact on local economy project-affected people needs to be considered. Other Most of the cascades are being developed in remote mountainous areas with little economic Yes developments and activity. The other major use of water is for irrigated agriculture. In Pho Day, mining and plans industrial activities also exist or are planned. Source: World Bank. Ngoi Xan Nam Tha The cascade in the Ngoi Xan River basin consists of From a total of nine identified SHP plants, three are under six SHP plants on two tributaries, the Thau and Phin construction and one has been operational since 2010. Ho streams, and one on the main Ngoi Xan River. Both The Nam Tha stream is a tributary of the Ngoi Nhu River, upstream tributaries are relatively steep and are sur- which discharges into the Red River. Most of the upstream rounded by mountainous areas with elevation rang- areas, where the three projects under construction are ing from 700 meters to 1,000 meters. Downstream, situated, are very remote, scantly populated, and densely the power cascade slopes are gentler and agricultural forested. The characteristics and impacts in Nam Tha are activities increase. The cascade scores high on physical similar to those in Ngoi Xan, but the Nam Tha cascade and environmental impacts and relatively low on social overall has higher physical and environmental impacts impacts. This is understandable because the cascade (because the development is in pristine forest areas). The area is relatively sparsely populated and still has an abun- Nam Tha cascade scores very high on physical and envi- dance of valued ecosystem components. ronmental impacts and relatively low on social impacts. Results of the Screening Phase 29 Pho Day erosion of cultivated hill slopes. Sedimentation rates for the reservoirs are therefore expected to be high. With- The cascade in the Pho Day River consists of two SHP out regular sediment flushing, the live storage of four of plants, both yet to be constructed. The terrain of the Pho the reservoirs will be severely reduced within a couple Day River is not as steep as Ngoi Xan and Nam Tha, and of years. the surrounding valleys are more gently sloped. Most of the area within or close to the planned cascade and downstream is highly deforested as the result of human Opportunities for Joint Operation activity and is relatively densely populated. Pho Day scores low on physical and environmental impacts, but During the screening phase opportunities for joint opera- higher on social impacts. tion and optimization were identified. The six basins show considerable variety in SHP configuration. Most often the Nam Hoa cascades are a combination of reservoirs with daily (and sometimes weekly) storage and river diversion. Based on Nam Hoa River is located upstream of the Ma River, which the initial analysis, three cascades were considered to be flows downstream through Lao P .D.R. and turns back into promising for optimization of power generation through Vietnam where it flows as the Song Ma River and eventu- joint operating rules (Ngoi Xan, Nam Tha, and Chien Riv- ally into the Gulf of Tonkin. The cascade consists of two ers), two moderately promising (Sap and Pho Day Riv- SHP plants, both of which are under construction. The ers), and one of limited opportunity (Nam Hoa River). river reach where the cascade is situated has a relatively mild slope, and the adjacent lands are highly deforested as the result of human activity. Distances between dam Selection of Cascades for Detailed and powerhouse are very short, so the cascade will not Study significantly divert the river. Nam Hoa scores moderate to low on all impacts. The following cascades were selected for detailed stud- ies of cumulative impacts and potential optimization of operating rules: Nam Chien Nam Chien is a tributary of the Da River. The cascade • Ngoi Xan: Among the basins with highest potential consists of two SHP plants (Nam Chien 2 and Pa Chien) for optimizing joint operation through one owner. as well as one large 200 MW hydropower dam and res- Water diversion in the SHP cascade creates an ervoir (Nam Chien 1). Nam Chien 1 and 2 are operational almost dry riverbed throughout the system. while Pa Chien is still under construction. The upper • Nam Tha: High cumulative impact risk because the reach where Nam Chien 1 and 2 are situated is relatively cascade is being developed in pristine natural areas. steep, as are the surrounding valleys and tributaries. The Water diversion in the SHP cascade creates an lower reach, where Pa Chien is located, is much more almost dry riverbed throughout the system. gently sloping. Most of the area within the cascade and • Nam Chien: A large dam (200 MW) upstream of the downstream is highly deforested as the result of human SHP cascade provides potential opportunities for activity. Nam Chien scores high on physical and environ- joint operation. Water diversion in the cascade cre- mental impacts, but especially in the downstream sec- ates an almost dry riverbed throughout the system. tion, people are affected too. • Sap: Multiple ownership of the nine SHP plants in the system yields both challenges to and opportuni- ties for revenue sharing through joint operation of Sap the cascade. The Sap River cascade is different from the others in many respects. The cascade has eight planned SHP The planned Pho Day cascade consists of two SHP plants: plants, is very long, and runs through three distinct land- Hung Loi 1 (under construction) and Hung Loi 2. Because scapes. It starts just below a mountainous area. A major it is uncertain that Hung Loi 2 will be constructed and part of the cascade is located in the middle reaches con- because the two SHP plants are situated very close to sisting of a wide valley with considerable human settle- each other, cumulative impact risks are thought to be ment and agricultural land use. Therefore, environmental low. Therefore, this cascade was not studied in detail. impacts are assumed to be low. The most striking feature is that the Sap River carries a large amount of fine sedi- The Nam Hoa cascade also consists of two SHP ment, coming from the weathering of ferrous rocks and plants, both of which are currently under construction 30 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades NAM HOA DAM UNDER CONSTRUCTION PHOTO 5.1  © Deltares/World Bank. Used with the permission of Deltares. Further permission required for reuse. (photo 5.1). Because the powerhouses are close to the Notes dams, the length of river diversion is very short. Cumu- lative impacts are not likely except for the risk to some 1. Participants comprised representatives of the Ministries of Indus- aquatic species from loss of connectivity. Downstream try and Trade, Resources and Environment, and Agriculture and Rural Development; developers who were part of the Renewable Energy impacts relate primarily to the lowermost dam and Development Program; the Provincial People’s Committees; the pro- are therefore not cumulative. It is highly unlikely that vincial Departments of Industry and Trade, Natural Resources and changes in dry season flow patterns are discernible at Environment, and Agriculture and Rural Development from Lao Cai, Son La, and Tuyen Quang; Electricity Vietnam; and other relevant the Lao P .D.R. border. Therefore, the cumulative impact stakeholders. score is thought to be low and does not warrant further 2. The initial list of valued ecosystem components and boundaries detailed analysis. was adjusted after the screening phase to make it more applicable for the detailed cumulative impact analysis. 6 Cumulative Impact Analysis of Small-Scale Hydropower Cascades Cumulative Impacts on Flow Regime curves indicate the percentage of time during which a certain discharge is exceeded in the natural situation and To analyze the impact of the cascades on river flows, a when a small-scale hydropower (SHP) plant is in place. model was set up to describe the discharge modified by The flow duration curves show that between the dam the dams’ operations. The general picture for all cascades and the powerhouse the discharge is zero most of the is similar: flow regimes are altered significantly between time (often more than 90 percent). The cumulative effect the dam and the powerhouse because water is diverted of the cascade on downstream flows is rather limited, through the tunnel and penstock to the powerhouse as illustrated by how the flow duration curve tracks the (see figure 6.1) This diversion leads to long periods of “Natural” curve. The pattern is the same for all cascades: zero flows during the better part of the year (more than the middle-range discharges are somewhat raised below 300 days per year). Only high discharges during the rainy the powerhouse, but the natural pattern is not much season are spilled below the dam, as can be seen by altered for the other discharges. the flow duration curves (figure 6.2). The flow duration FIGURE 6.1 HYDROGRAPHS OF VAN HO DAM IN NGOI XAN CASCADE a. Hydrograph of natural flow b. Hydrograph between dam and powerhouse 150 150 80 percent 140 140 Minimum 130 130 Maximum Average 120 120 110 110 Cubic meters per second 100 100 Cubic meters per second 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 M J J A S O N D J F M A M J J A S O N D J F M A Hydrological year May-April Hydrological year May-April Source: World Bank. 31 32 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades FIGURE 6.2 FLOW DURATION CURVES FOR THE LOWERMOST SMALL-SCALE HYDROPOWER PLANTS IN THE CASCADES a. Van Ho (Ngoi Xan cascade) b. Nam Tha 6 (Nam Tha cascade) 70 Natural 100 Natural Discharge (cubic meters per second) Discharge (cubic meters per second) Downstream dam 90 Downstream dam 60 Downstream powerhouse Downstream powerhouse 80 50 70 40 60 50 30 40 20 30 20 10 10 0 0 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Percentage of time exceeded Percentage of time exceeded c. Pa Chien (Nam Chien cascade) d. Phieng Con (Sap cascade) 700 Natural 700 Natural Discharge (cubic meters per second) Discharge (cubic meters per second) Downstream dam Downstream dam 600 Downstream powerhouse 600 Downstream powerhouse 500 500 400 400 300 300 200 200 100 100 0 0 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Percentage of time exceeded Percentage of time exceeded Source: World Bank. Cumulative Impacts on Sediment watershed, and often a certain balance exists between Dynamics the supplied sediment yield and the transport capacity of the river channel, given the prevailing flow conditions. In the river basins in the study, most sediment is supplied All the rivers considered in this study are typical moun- and transported downstream during rainfall and flood tain rivers, with widely varying hydrological conditions. events in the wet season. Upstream, these rivers are steep, narrow, and deeply incised, whereas they show expansion with broad flood The construction of a single dam or a cascade of dams plains in the foothill regions (such as the lower Nam causes a significant disturbance of the sediment balance. Chien) or in intramontane depressions (such as between The reservoirs intercept part of the sediment supply, and Tat Ngoang and Ta Niet in the Sap River). Sediments that modify the hydrological conditions and associated sedi- erode from the slopes enter the main rivers through a ment-transport capacity for the downstream reach. The dense network of small torrents and tributaries during major relevant impacts of this disturbance in the SHP rainfall events. Under natural undisturbed conditions, the plants under study in Vietnam follow (and are summa- main rivers carry the sediments that are eroded from the rized schematically in figure 6.3): Cumulative Impact Analysis of Small-Scale Hydropower Cascades 33 FIGURE 6.3 SCHEMATIC OF IMPACTS OF A HYDROPOWER DAM ON RESERVOIR AND RIVERBED MORPHOLOGY Tail reach, backwater reach Delta topset bed Dam Original riverbed Delta forest bed Bottomset bed Delta forest bed Source: World Bank. • Coarse sediments (cobbles, gravel, and sand) will • Sedimentation in the backwater-reach of the reser- deposit in the head and tail reach of the reser- voir will lead to an upstream propagating increase of voir (because of the decline of flow velocity). The bed levels as well as water levels. deposits are usually deltaic, progressively filling up the pool from upstream and directly reducing the • Interception of sediment by the reservoir will cause active reservoir storage capacity. When the delta the downstream reach to be undersupplied, which front approaches the dam, an increasing amount will lead to degradation (Draut, Logan, and Mastin of coarse sediments will enter the intakes. These 2011). This degradation could lead to destabilization sediments will cause severe abrasion of equipment of river banks, slopes, and structures along the river. and may block the headraces and pipes (Gyanendra Prasad Kayastha 2009). An example is shown in • Because of the undersupplied sediment conditions photo 6.1. Because of sediment deposition in front the riverbed composition will change significantly of the intake, the runner blades of the turbines at (Draut, Logan, and Mastin 2011): during degradation this dam have to be replaced yearly. (1) fine sediments are winnowed out, and coarse armor layers are formed; and (2) the lack of sup- • Very fine sediment (clay, silt, and fine sand) will ply of gravel and sand will cause the bed to transit mostly pass the dams or enter the turbines, particu- from well sorted to poorly sorted (mostly cobbles) or larly for the reservoirs with small storage. bimodal (cobble fraction and silt/fine-sand fraction). 34 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades  EDIMENTATION IN FRONT OF THE INTAKE OF VAN HO SMALL-SCALE HYDROPOWER PLANT IN THE NGOI XAN PHOTO 6.1 S BASIN (LOOKING DOWNSTREAM) © Deltares/World Bank. Used with the permission of Deltares. Further permission required for reuse. Note: The intakes are located in the structure in the middle of the picture. The dam crest is visible on the right. – The modification of bed composition is often a • Riverbed impacts, that is, the rate of incision and relevant cause for disappearing habitats for fish bed-composition change measured by judging the and other freshwater fauna. The development sediment output from the dam, the reduced sedi- of an armor layer may temporarily arrest the ment-transport capacity, and the sediment supply degradation. from the watershed (balanced, undersupplied, or • The reduction of erosive flood peaks will partially oversupplied). compensate for the lack of sediment supply: ero- sion processes in the downstream river will be Note that the impacts on bed level, as presented in figure slowed down or stopped (by armoring), especially if 6.3, have both temporal and spatial scales. The influence the new sediment-transport capacity matches that of sedimentation and erosion gradually expands in the of the remaining sediment yield from tributaries in upstream and downstream directions. In the studied cas- the downstream reach. However, this is true for cas- cades, many of the dams are several kilometers apart, cades with large reservoirs, such as Nam Chien 1, and often the backwater of the downstream dam reaches but not for a cascade with only small reservoirs. the toe of the upstream dam. In such a situation, a direct interaction between the impacts can exist, for example, • The impacts for an SHP plant and its downstream the lack of sediment load from the upper dam can pre- river stretch can be divided into two groups: vent sedimentation in the backwater area of the lower dam. In the Sap River the distance between some of the – Reservoir sedimentation impacts, expressed as dams is much larger, and they are less likely to have inter- sedimentation volume relative to total storage acting or additive impacts. volume. Cumulative Impact Analysis of Small-Scale Hydropower Cascades 35 Cumulative Impacts on Valued whole cascade, but as a summary illustration of the indi- Ecosystem Components (VECs) vidual impacts. The next sections discuss in more detail the impacts on each receptor and VEC caused by circum- For each cascade the cumulative impacts on the recep- stances other than SHP and by cascade construction. tors and VECs, both without and with SHP cascade devel- opment, were assessed. A summary of the scores is Reference Case: No Cascade given in table 6.1 and figure 6.4. The table and figure also show the difference in scores between the two cases Forestry and forest extraction have already affected for each receptor and VEC (the “Difference” column in the natural ecosystem of all studied basins to a great the table). Before discussing the details of the assess- extent, except for Nam Tha, which still harbors substantial ment, this summary shows a relatively high cumulative pristine forest areas. The natural vegetation in Ngoi Xan impact for Nam Tha compared with the others. Ngoi Xan and Chien is dominated by secondary forest and grass- has similar cumulative impacts, but the scores are lower land shrubs. The middle part of Sap is quite deforested for most of the criteria, which is illustrated by the similar already, whereas the upper and lower parts still consist but smaller shape of the spider diagram. In contrast, the of more pristine forest. However, the current degree of Sap basin has the lowest additional impact due to cas- deforestation is considered to be low compared with cade development. The Chien cascade shows the high- the other basins. Therefore, the major impact pathway est score on revenues because it is dominated by the in Ngoi Xan, Nam Tha, and Chien is from deforestation 200 MW hydropower plant. It also shows a relatively high due to timber extraction and land clearance. This pathway impact on VECs without cascade development because affects valued flora and fauna as well as ecosystem flow the ecosystem services for flow regulation and soil pro- regulation and soil protection. tection are impaired by the loss of vegetation cover. Cas- cade development does not add to this impact. A second impact pathway stems from agricultural development causing water pollution, which is apparent Because the purpose of the assessments was to analyze in Sap and Nam Tha. Agricultural development affects val- the cumulative impacts on each VEC, the spider diagrams ued fauna and flora in the aquatic environment, including should not be interpreted as an overall score for the fish populations. Water pollution is also being caused by TABLE 6.1 IMPACT SCORES FOR ALL RIVER BASINS, WITHOUT (CASE 0) AND WITH (CASE 1) CASCADE DEVELOPMENT Ngoi Xan Nam Tha Chien Sap Difference Difference Difference Difference Case 0 Case 1 Case 0 Case 1 Case 0 Case 1 Case 0 Case 1 Receptor or VEC Valued fauna 2.0 2.64 0.64 2.0 3.36 1.36 2.70 3.36 0.66 1.8 2.16 0.36 Valued flora 1.7 2.20 0.50 1.7 2.80 1.10 2.25 2.80 0.55 1.5 1.80 0.30 Flow regulation ability 2.0 2.00 0 2.0 3.00 1.00 3.00 3.00 0 1.0 1.00 0 Soil protection ability 2.0 2.00 0 2.0 3.00 1.00 3.00 3.00 0 1.0 1.00 0 Reservoirs 0 2.75 2.75 0 3.30 3.30 0 2.20 2.20 0 1.00 1.00 Riverbed and water 1.0 2.48 1.48 0 2.75 2.75 0 2.20 2.20 0 2.20 2.20 column Project-affected 0 1.00 1.00 0 1.00 1.00 0 1.00 1.00 0 1.00 1.00 people Government and 0 3.00 3.00 0 3.00 3.00 0 4.00 4.00 0 2.00 2.00 private revenues Source: World Bank. 36 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades FIGURE 6.4 SPIDER DIAGRAMS OF THE CUMULATIVE IMPACTS a. Ngoi Xan b. Nam Tha Valued fauna Valued fauna 4.0 4.0 3.5 3.5 Revenues 3.0 Valued flora Revenues 3.0 Valued flora 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 PAP Ecosystem flow Ecosystem flow 0 regulation ability PAP 0 regulation ability Riverbed/column Ecosystem soil Riverbed/column protection ability Ecosystem soil protection ability Reservoirs Reservoirs c. Chien d. Sap Valued fauna Valued fauna 4.0 4.0 3.5 3.5 Revenues 3.0 Valued flora Revenues 3.0 Valued flora 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 Ecosystem flow PAP Ecosystem flow PAP 0 0 regulation ability regulation ability Riverbed/column Riverbed/column Ecosystem soil Ecosystem soil protection ability protection ability Reservoirs Reservoirs Source: World Bank. Note: PAP = project-affected people. Light blue represents impacts without small-scale hydropower; dark blue represents impacts with small-scale hydropower. Reservoirs and revenues are positive valued ecosystem components. industrial development in the lower reach of Nam Tha (a Taken together, the cumulative effects of these path- paper factory downstream of the Khe Lec bridge). ways have a moderate impact on valued flora and fauna, flow regulation ability, and soil protection ability for Ngoi Irrigation in most studied river basins is situated down- Xan and Nam Tha. The impacts are somewhat higher for stream of the cascade development. Water extraction for Chien, and somewhat lower for Sap. irrigation in the middle and upper parts of the basins is often from tributaries and mountain springs and does not significantly affect the receptors and VECs. Case 1: Cascade Development The impacts of cascade development and of related Fisheries activities are more prolific in the Chien basin present and near-future activities follow complex interac- than in the other basins, and its fish populations have tion pathways, as depicted in figure 4.4, and are domi- been seriously degraded. nated by development of the SHP projects. The primary and secondary impact pathways are remarkably similar for all cascades. Cumulative Impact Analysis of Small-Scale Hydropower Cascades 37 TABLE 6.2 PROPORTION OF RIVER DIVERTED BY THE CASCADE Ngoi Xan Nam Tha Chien Sap Total river length (kilometers) 21.4 16.4 26.9 66.0 Length of diversion (kilometers) 19.8 12.8 23.7 15.3 Percentage of river length diverted 93.0 78.0 88.0 23.0 Number of days per year with zero flow in diverted portion of river 304.0 331.0 346.0 324.0 Source: World Bank. SHP development leads to river diversion, land take, and soil protection ability. For Sap the cumulative impact and land use change, but also spurs economic invest- on valued flora and fauna is considerably less, thanks to ment. Economic investment leads to positive secondary the smaller scale of new infrastructure on already heavily impacts on infrastructure and job opportunities. Negative impaired and cultivated land in the middle valley. secondary impacts are expected on habitat fragmenta- tion, loss of connectivity, loss of vegetation, and erosion For Nam Tha, Ngoi Xan, and Chien significant impacts and sedimentation. The most important cumulative on the riverbed and water column are expected negative impact for all cascades is habitat fragmen- because of changes in sediment dynamics: sediment tation and reduced connectivity within the entire is trapped in reservoirs and flow velocities change. cascade system. This impact is synergistic in nature. Although the effect on sediment-transport rates is differ- This impact stems mainly from the fact that for up to ent between the cascades and even can differ between 92 percent of the river the water is diverted from its river stretches within one cascade, the net result is natural riverbed (table 6.2). Large stretches of river will that riverbeds become more homogeneous and less become dry (photo 6.1) for long periods (up to 346 days dynamic. Available ecological niches in the river will be for the Nam Chien cascade; see also figures 6.1 and decreased, eventually affecting ecosystem composition 6.2 for illustrations). The total length of water diversion and biodiversity (Petts 1984a, 1984b; Lillehammer and is less pronounced for Sap, but even here the loss of others 2009). The cumulative impact of sediment trap- aquatic connectivity is substantial because over a length ping on downstream reservoirs is positive: a relatively of 66 kilometers no fewer than nine dams will be con- large reservoir upstream reduces the sedimentation of structed, which will be nine barriers for fish and other the other reservoirs in the cascade. aquatic fauna. A comparison of the diversion from Nam Chien 1 (16 kilometers) and the other cascades together (55.6 kilometers) shows that the cumula- tive impact on river diversion from SHP is PHOTO 6.2 DRY RIVERBED BELOW NAM CHIEN 2 DAM considerable. Changes in receptors and VECs, however, differ between the basins, because the reference situations differ and because of interactions with other circumstances. The impacts on valued flora and fauna are slightly higher in Ngoi Xan and Chien, but for Nam Tha the impact on valued fauna is considerably larger. The interac- tion pathway, and its impacts stemming from forest extraction, is significantly intensified by SHP development in Nam Tha because of the construction of access roads and land take for infrastructure in mostly pristine forested and riverine areas. Increased deforestation in Nam Tha is also © Deltares/World Bank. Used with the permission of Deltares. Further permission required leading to greater loss in flow regulation for reuse. 38 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades TABLE 6.3 CUMULATIVE SOCIAL IMPACTS OF THE CASCADES Power density (watts per square Households Households losing Area of permanent Installed power meter of reservoir Cascade resettled (number) lands (number) land loss (hectares) (megawatts) area) Chiena 15 240 312 54.0 17.3 Nam Tha 0 Data not available 70 45.0 63.9 Ngoi Xan 0 84 138 53.7 38.9 Sap b 0 269 70 23.4 33.4 Total 15 593 590 176.1 29.8 Nam Chien 1 160 160 529 200.0 37.8 a. Excluding Nam Chien 1. b. Includes information from Muong Sang1and Sap Viet only. Source: World Bank. In all studied basins, river regime changes below the Conclusion cascade are minimal; therefore, water-use competi- tion with downstream irrigation offtakes (such as Lang Although SHP projects affect the river regime, water use San weir in Ngoi Xan and Song Ve weir in Nam Tha) is conflicts are normally limited because the areas around also nonexistent. In Sap, however, two irrigation proj- the cascades are typically sparsely inhabited, and agricul- ects are situated within the cascade and concerns have ture depends on gravity irrigation from small tributaries been raised about impacts from the development of the rather than the main stream. Most major irrigation weirs cascade. are downstream from the cascades, as in Ngoi Xan and Nam Tha. Cumulative impacts on water use thus are nor- Positive impacts on revenues (government and pri- mally limited to the area downstream of the entire cas- vate) are estimated to be significant in all cascades, cade. The case studies showed that these downstream except Sap. Lack of coordination between multiple own- impacts are minimal because the flow regime down- ers in the SAP cascade prevents the realization of posi- stream of the cascade is minimally changed (in both the tive impacts. Negative impacts on PAP are partly offset wet and dry seasons). by positive impacts from investment in infrastructure and improved job opportunities. Cumulative impacts on ecosystems are mainly due to the opening up of pristine areas for resource utilization and to With regard to social impacts, the SHP cascades require the fragmentation of habitats, most notably affecting fish little resettlement. However, even though the individual population and diversity. In Nam Tha, the effects are on reservoir areas are usually quite small, the cascades all pristine forest areas with their associated flora and fauna. together add up to about 590 hectares, affecting about In a variety of the basins important VECs were identified 593 households (table 6.3).1 This is larger than the reser- from studies and consultation with stakeholders, includ- voir area of Nam Chien 1, which has more power gener- ing threatened or endangered wildlife, fishes, and plants. ating capacity installed than the other plants put together All four case studies show that the most profound (both existing and under construction). However, 160 cumulative impacts of building small-scale hydro- households needed to be resettled for Nam Chien 1 to power in cascades is related to habitat fragmenta- be constructed, whereas for the cascades only 15. Nev- tion and loss of connectivity and their subsequent ertheless, when comparing power density, which is the impacts on the terrestrial and riverine VECs. Release installed power per square meter of reservoir area, Nam of environmental flows (see next chapter) may mitigate Chien 1 scores better than the combined SHP plants (27 effects on available riverine habitat for aquatic species, percent higher power density). Thus, it can be said that although connectivity loss attributable to the cascade the cumulative impact on land take of small-scale hydro- diversions will still occur. power is not negligible (table 6.3). Cumulative Impact Analysis of Small-Scale Hydropower Cascades 39 BOX 6.1 SUMMARY OF CUMULATIVE IMPACT ASSESSMENT FOR STUDIED CASCADES Although each cascade has unique characteristics, this study shows that small-scale hydropower development in the four cascades has the following effects: • Requires minimal resettlement of people • Requires land take comparable to that of large hydropower as measured by power density • Is not in competition with irrigation • Does not significantly alter flows downstream from the cascade (because of small reservoirs) • Has little scope for multifunctional use (reservoirs are too small) • Has a significant impact on habitat fragmentation and reduces connectivity • Risks opening and disturbing pristine areas, leading to additional cumulative impacts from deforestation (as shown in the case of Nam Tha). All cascades except Sap have significant cumulative References impacts on erosion and sedimentation. The most pro- found impacts are from Nam Chien, due to the presence Draut, Amy E., Joshua B. Logan, and Mark C. Mastin. 2011. of the large Nam Chien 1. For Sap most sediments are “Channel Evolution on the Dammed Elwha River, Wash- carried through the system. Similarly, all cascades except ington, USA. ” Geomorphology 127 (1–2): 71–87 . doi: Sap have upstream reservoirs that trap sediments, posi- 10.1016/j.geomorph.2010.12.008. tively affecting the lifetime of downstream reservoirs. Gyanendra Prasad Kayastha. 2009. “Sediment Management in Box 6.1 summarizes the impacts for the four cascades Nea’s Run Of River Hydropower Plants.” SediNet (Sedi- under study. ment Management Network). Knowledge Base Research Article. June 2009. http://www.sedinet.info/pdf/SEDI- MENT_MANAGEMENT_IN_NEAG.pdf. Note Lillehammer, L., G. Benavides, K. Vaskinn, J.P. Magnell, and Ø.P. 1. This figure is an underestimation because data on area and Hveding. 2009. “Hydropower Development in Aysen, affected households for most of the Sap projects in the pipeline is Chile. Final Report: Aquatic Ecology and Ecohydrology. ” incomplete. HidroAysen Report. SWECO, Oslo. Petts, G.E. 1984a. Impounded Rivers: Perspectives for Ecologi- cal Management. Chichester: Wiley. ” Earth ———. 1984b. “Sedimentation within a Regulated River. Surface Processes and Landforms 9: 125–34. 7 Future Small-Scale Hydropower Performance Effect of Environmental Flows Legal Requirements and Actual Implementation The Importance of Environmental Flows According to existing government legislation, hydro- Stream flow regimes have a major influence on the power producers are required to minimize the impacts biotic and abiotic processes that determine the struc- of reservoir operation on the downstream environment. ture and dynamics of stream and riparian ecosystems Decree No. 112/2008/ND-CP of MONRE Article 9.1, for (Covich 1993). High river flows are important not only instance, states for sediment transport, but also for reconnecting flood- plain wetlands to the channel and for recharging ground- The operation rules of the reservoir: must be developed water resources on which terrestrial ecosystems partly and submitted to authorized agencies for approval before depend. Floodplain wetlands provide habitat for fish and storing water; must meet all the functions of the reser- waterfowl, among others. Low flows promote fauna dis- voir in the prioritized order; must ensure the safety of the persion, thus spreading populations of species to a vari- dam and areas downstream of the reservoir, the integrated ety of locations. The life cycles of many riverine species exploitation of resources and environments of the reser- require an array of different habitat types whose tempo- voir, and the maintenance of the minimum flow in reser- ral availability is determined by the flow regime. Adapta- voir downstream; must not cause a significant change in tion to this dynamic environment allows riverine species the flow regime downstream of the reservoir; must give to persist during periods of droughts and floods (Loucks consideration to climate change issues; and must conform and van Beek 2005; Poff and others 1997). with inter-reservoir rules applying within the river basin (if any) which have been approved by the authorized agency. Stream flow regime is affected by stream diversion and regulation in small-scale hydropower (SHP) cascades as As stated, a minimum flow needs to be maintained well as by changes in the terrestrial environment due to downstream of the reservoir. Article 3.1 defines the mini- SHP infrastructure and other factors in the basin, such mum flow as follows: as land use change. One way to mitigate the impact of stream regulation and diversion is the implementation of “Minimum flow” is the lowest flow required to maintain environmental flows. Providing for environmental flows a river or river segment, maintain normal eco- and aquatic in the four selected cascades could be important, espe- systems, and to ensure the lowest level for other develop- cially for the survival of riverine ecosystems and their ment activity and use of water resources, according to the associated fish species. The impacts of selected environ- priorities identified in the river basin plan. mental flow scenarios on stream flow and power produc- tion for the four basins are described below. 41 42 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades For several existing plants or plants under construction ensuring minimum discharges through operating rules in the studied cascades, planned environmental flow is particularly relevant. The flow regime indicators show releases were alluded to in documents or by the opera- that peak discharges indeed still occur, but with lower tors. It was not always clear whether these releases peaks. would be made from the dam or from the powerhouse. Ideally they would be made from the dam to benefit the stretch between the dam and the powerhouse, but not all Model Results dams have release facilities. Also, the minimum amount Because a detailed assessment of the flow requirements of water to be released varied and was not always clearly of ecosystem components (see box 7 .1) was outside the stated. Values ranged from 0.20 to 0.87 cubic meters per scope of the present study, any flow alteration was mea- second (m3/s) in the Ngoi Xan cascade (compared with sured by indicators of its different components: mean an average annual natural flow of 1.0 to 6.3 m3/s) and 0.4 annual runoff, peak discharges (highest discharge per m3/s for the Nam Chien cascade (compared with an aver- year, averaged over all simulated years), Q10 (discharge age annual natural flow of 17 to 23 m3/s). exceeded 10 percent of the time over the entire simu- lated series), Q90 (discharge exceeded 90 percent of the Whenever minimum flows were set and information was time over the entire simulated series), dry season mini- available for a particular SHP plant, the water balance mum flow (lowest discharge per year, averaged over all model was used to assess the impact of the flows on simulated years), and the number of days per year when power generation and on the environment. In addition, there is zero flow. the impact of implementing a minimum discharge of Q95 on the flow regime and on hydropower production for Table 7.1 summarizes the model’s results for the impacts both dry and wet seasons was studied.1 of current environmental flows (when available) and of implementing a Q95 minimum discharge on power The simulations used minimum discharges instead of production and flow regime, showing the differences the full flow regime. Although this results in less than a compared with the base case (cascade without environ- comprehensive environmental flow assessment, it can mental flows). The reduction in energy production is con- also be argued that some peak discharges will occur any- siderable with changes of 15 percent to 31 percent (in all way because of the small storage capacity, therefore, cases except for Chien current environmental flow). For  UMMARY OF CASCADE IMPACTS OF ENVIRONMENTAL FLOW RELEASES COMPARED WITH TABLE 7.1 S THE BASE CASE OF NO ENVIRONMENTAL FLOWS Nam Tha Ngoi Xan Chien Sap Current Current environmental environmental Q95 vs. no flow vs. no Q95 vs. no flow vs. no Q95 vs. no Q95 vs. no environmental environmental environmental environmental environmental environmental Impact flow flow flow flow flow flow Change in energy production −31.0 −21.0 −20.0 −1.5 −15.0 −25.0 (percent) Change in energy production −57.0 −49.0 −45.0 −140.0 −149.0 −50.0 (gigawatt hours per year) Change in zero flow days −331.0 −249.0 −250.0 −346.0 −346.0 −261.0 (remaining days) (0) (55) (54) (0) (0) (63) Change in Q10 (normal high 1.40 2.00 3.0 0.4 6.0 6.4 flows; cubic meters per second) Change in Q90 (normal low 1.10 0 0 0.4 4.0 0 flows; cubic meters per second) Source: World Bank. Note: Q90 = flow that is exceeded 90 percent of the time; Q95 = flow that is exceeded 95 percent of the time. Future Small-Scale Hydropower Performance 43 BOX 7.1 MINIMUM FLOW OR ENVIRONMENTAL FLOW? River ecosystems are, to a large extent, the result of natural variation in the discharge regime. The magnitude, tim- ing, duration, frequency, and rate of change of both high and low flow events are important. The required flow regime will depend on the requirements of the ecosystem components that are valued in a specific river and also implies a trade-off with other river functions, such as hydropower generation. It can be assumed that any alteration of the flow regime (topping off of high peaks, increasing low flows) leads to changes in the river ecosystem. Whether these changes can be accepted because the benefits—in this case hydropower generation—are considered more important cannot be answered with a generic rule. Instead, site-specific assessments, for which several methods are available, are required. The approaches developed in various countries around the world can be divided into four categories (Acreman and Dunbar 2004): • Lookup tables • Desk-top analysis • Functional analysis • Hydraulic habitat modeling The last two groups are the most advanced and require more resources and data. Functional analysis builds on an understanding of the functional links between several aspects of the hydrology and ecology of the river system. These methods cover many aspects of the ecosystem and some of them also incorporate societal aspects, such as the Downstream Response to Imposed Flow Transformations methodology (King, Brown, and Sabet 2003). Per- haps the best known is the Building Block Method (BBM), developed in South Africa (Tharme and King 1988; King, Tharme, and de Villiers 2000). The basic premise of the BBM is that riverine species as well as other river functions are reliant on basic elements (building blocks) of the flow regime over the year, including low flows (which provide a minimum habitat for species and prevent invasive species), medium flows (which sort river sediments and stimulate fish migration and spawning), and floods (which maintain channel structure and allow movement onto floodplain habitats). An environmental flow regime can thus be constructed by combining these building blocks (see figure B7 .1.1). It should be clear that a seasonal fixed minimum discharge, such as the Q95 or Q50 (see figure 7 .1) eliminates most of the natural variation in discharges, and is unlikely to be able to sustain all relevant ecological processes. FIGURE B7.1.1 EXAMPLE OF AN ENVIRONMENTAL FLOW REGIME BUILT UP USING BUILDING BLOCKS Habitat maintenance Channel flushing (second building block) (second building block) Spawning/migration freshes Discharge (third building block) Low (first building block) January February March April May June July August September October November December Month Source: Acreman and Dunbar 2004. 44 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades FIGURE 7.1 COMPARISON OF NATURAL FLOW REGIME WITH ENVIRONMENTAL FLOW RELEASES (NAM THA 6) a. Natural flow compared with b. Natural flow compared with c. Natural flow compared with cascade without environmental flow cascade with environmental flow Q95 cascade with environmental flow Q50 (base case) 80 80 80 Natural Natural Natural Discharge (cubic meters per second) Discharge (cubic meters per second) Discharge (cubic meters per second) No environmental flow Q95 flow regime Q50 flow regime 70 70 Q95, environmental 70 Q50, environmental flow rule flow rule 60 60 60 50 50 50 40 40 40 30 30 30 20 20 20 10 10 10 0 0 0 March 1995 April 1995 November 1995 February 1996 June 1996 September 1996 December 1996 May 1997 March 1995 April 1995 November 1995 February 1996 June 1996 September 1996 December 1996 May 1997 March 1995 April 1995 November 1995 February 1996 June 1996 September 1996 December 1996 May 1997 Month Month Month Source: World Bank. Note: Q50 = flow that is exceeded 50 percent of the time; Q95 = flow that is exceeded 95 percent of the time. Nam Tha, Ngoi Xan, and Sap the absolute reduction is Implementation of a Q95 minimum discharge will contrib- about 50 gigawatt hours per year (GWh/y), whereas for ute to the prevention of zero flow days between dam and the Chien cascade the reduction amounts to 14 GWh/y powerhouse, but little more. Because of limited storage under the current environmental flow regime and 150 capacity of most reservoirs, peak flows, which cannot be GWh/y for a Q95 minimum discharge. In all cascades, accommodated by the turbines, will spill over the dam. the implementation of an environmental flow regime With a Q95 environmental flow, the flow pattern between strongly reduces the number of zero flow days. In Nam dam and powerhouse will exhibit a fixed discharge at a Tha and Chien, zero flow days are entirely prevented, very low level with an occasional peak discharge. Most whereas in Ngoi Xan and Sap about 60 days remain, but discharges of intermediate size (up to 10 m3/s, for exam- it should be noted that these cascades also have zero ple, in Nam Tha), which used to occur at the beginning flow days in the natural (no dam) situation. and end of the rainy season, will not be restored (figure 7.1, panel b). Dams in the Chien cascade currently can release only very small environmental flows directly from the dam. If the environmental flow rule were to be as high as Q50, Therefore, it may not be technically possible with the cur- the discharge would be closer to the natural situation, rent structure to release larger amounts. Furthermore, but still modified (as shown for Nam Tha 6 in panel c of the model results indicate that a discharge of 0.4 m3/s figure 7 .1). However, during certain periods of the dry leads to complete prevention of “zero flow” days. How- season water volume is insufficient to meet a Q50 rule. ever, the model does not take evaporation and infiltra- This means that the river naturally has a lower discharge tion into account. It is quite possible that a release of 0.4 during these periods. Although the figure shows rela- m3/s could disappear over the 10 kilometer stretch to the tively small differences between the implementation of Nam Chien 1 powerhouse. Additional investigations are Q50 and Q95, the difference in energy production is con- required to better understand these processes. siderable, as displayed in figure 7.2. This figure shows the Future Small-Scale Hydropower Performance 45 relationship between increased minimum flow releases and reduction in energy production for the Nam Tha 6  AM THA 6: RELATIONSHIP BETWEEN FIGURE 7.2 N SHP dam. Similar relationships can be expected to exist MINIMUM FLOW RELEASES AND for the other cascades. ENERGY PRODUCTION 200 In summary, implementing a minimum river flow of, for 180 example, Q95 will help restore low flow conditions by pre- 160 venting the stretches between dams and powerhouses (gigawatt hour/year) Energy production 140 from becoming completely dry. The natural ecosystem is 120 likely to be dependent on natural variations in discharge, 100 and replacing those variations with a fixed minimum 80 discharge will undoubtedly lead to a change in the eco- 60 system. The considerable hydropower generation losses 40 resulting from releasing minimum amounts of water for 20 environmental purposes mean that restoring more natu- 0 ral flow regimes will be financially challenging. 100 90 80 70 60 50 60 70 80 90 50 Environmental flow (percentage of time discharge is exceeded) Effect of Climate Change Source: World Bank. Climate Scenarios The government of Vietnam published a report in 2009 setting forth a number of climate change scenarios for dif- the scenarios are small. All scenarios show increases in ferent regions in Vietnam (MONRE 2009). For the north- precipitation in the period June–February, and decreases west region of Vietnam, three quarterly rainfall change in precipitation at the end of the dry season, March–May. scenarios are shown in table 7 .2. Differences between The analysis in this report uses the A2 scenario. NAM HOA RIVER DOWNSTREAM FROM DAM PHOTO 7.1  © Deltares/World Bank. Used with the permission of Deltares. Further permission required for reuse. 46 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades  ROJECTED RAINFALL CHANGE FOR NORTHWEST VIETNAM TABLE 7.2 P (percent, compared with 1980–99) December–February March–May June–August September–November A2 (high scenario) 2.9 −2.8 5.9 1.1 B1 (low scenario) 2.9 −2.8 5.9 1.1 B2 (medium scenario) 2.9 −2.9 6.2 1.1 Source: MONRE 2009. Model Results the basins will thus be more influenced by anthropogenic impacts (irrigation, deforestation, and the like), than oper- The expected impact of climate change on power pro- ation of the cascade itself, assuming mitigation via envi- duction and flow regime in the cascades is summarized ronmental flows is implemented. in table 7.3. In all cascades the increase in power produc- tion is between 1 and 2 percent. However, because of the variation in power generating capacity, the increase in absolute terms is highest in the Chien cascade (22 Conclusion GWh/y). In all other cascades climate change is expected to lead to no more than 3 GWh/y more energy produc- Many of the dams lack the ability to discharge environ- tion. Because precipitation is expected to decrease mental flows from the reservoir. Operating rules for during the dry season, it is possible that because of sea- many hydropower plants do not stipulate an environmen- sonal variation in pricing, the increase in total energy pro- tal flow even though it is required by law, or, if they do, duction may be insufficient to compensate for the loss of the release is very small (for example, on the order of higher-revenue dry season energy production. Q90) and unlikely to effectively mitigate the long periods during which large stretches of the river dry out. Article Between the dams and the powerhouses, the wetter 9.1 of MONRE Decree No. 112/2008/ND-CP regarding conditions under climate change lead to a minimal reduc- minimum flows is not entirely fulfilled in the studied tion of days without flow (two to six days a year). The fact cascades. Furthermore, meaningful environmental flow that no change occurs in discharges that are exceeded 10 releases would lead to significant reductions of energy percent (high flows, or Q10) and 90 percent (low flows, or production and revenues. Q90) of the time means that climate change does little to restore a more natural flow regime. Possible increases in wet season precipitation caused by climate change could result in the generation of marginal Relative to the base case, the assessment of the A2 cli- amounts of extra energy. However, this extra wet-season mate change scenario on all four cascades shows no dif- production may be insufficient to compensate for the ference in cumulative impact. Future cumulative impacts loss of energy that would have been produced during the on the valued ecosystem components and receptors in dry season, when energy is priced higher. TABLE 7.3 SUMMARY OF IMPACTS OF CLIMATE CHANGE ON CASCADES Nam Tha Ngoi Xan Chien Sap Change in energy (percent) 2 1 2 1 Change in energy (gigawatt hours per year) 3 3 22 3 Change in zero flow days −2 −6 −3 −4 Change in Q10 0 0 0 0 Change in Q90 0 0 0 0 Source: World Bank. Note: Q10 = flow that is exceeded 10 percent of the time; Q95 = flow that is exceeded 95 percent of the time. Future Small-Scale Hydropower Performance 47 Notes King, J.M., R.E. Tharme, and M.S. de Villiers. 2000. “Environ- mental Flow Assessment for Rivers: Manual for the Build- 1. Q95 is the discharge that is exceeded 95 percent of the time, and ing Block Methodology. ” Water Research Commission represents a low discharge. Q95 was determined based on natural Report. TT 131/00, Pretoria, South Africa. discharge series for the location of all SHP plants, and separately for the dry (November to April) and wet (May to October) seasons. Loucks, D.P. and E. van Beek (eds.). 2005. Water Resources Q95 is a minimum discharge, and aims to prevent zero flow days and Systems Planning and Management: An Introduction to to reduce the low flow conditions that result from the SHP plants. Methods, Models and Applications. Studies and Reports in Hydrology. Paris: UNESCO Publishing. References MONRE. 2009. “Climate Change, Sea Level Rise for Vietnam. ” Ministry of Natural Resources and Environment, Hanoi. Acreman, M., and M. Dunbar. 2004. “Defining Environmental River Flow Requirements – A Review. ” Hydrology and Poff, L.L., J.D. Allan, M.B. Bain, J.R. Karr, K.L. Prestegaard, B.D. Earth System Sciences 8(5): 861–76. Richter, R.E. Sparks, and J.C. Stromberg. 1997 . “The Nat- ural Flow Regime. ” BioScience 47: 769–84. Covich, Alan P . 1993. “Water and Ecosystems. ” In Water in Cri- sis: A Guide to the World’s Freshwater Resources, edited Tharme, R.E., and J.M. King. 1998. “Development of the Build- by P .H. Gleick. Oxford, United Kingdom: Oxford University ing Block Methodology for Instream Flow Assessments Press. and Supporting Research on the Effect on Different Mag- nitude Flows on Riverine Ecosystems. ” Report to Water King, J.M., C. Brown, and H. Sabet. 2003. “A Scenario-Based Research Commission 576/1/98. Cape Town, South Africa. Holistic Approach to Environmental Flow Assessment for Rivers.” River Research and Applications 19: 619–39. 8 Potential for Improving the Planning and Operation of Small-Scale Hydropower Planning Plants Planning Problems Observed cat, pangolin etc. ” (Phuc Khnah 2010b). Regardless of whether the size of an animal is important for its con- Current planning procedures do not fully acknowledge servation value, the pangolin is a rare animal and listed the potentially significant cumulative impacts from small- by the International Union for Conservation of Nature as scale hydropower (SHP) cascade development. Neither either endangered or near threatened with extinction. environmental impact assessments required by regula- The EMP lists the pangolin as being present (which may tion nor safeguard frameworks used for the Renewable or may not be true) but apparently fails to recognize this Energy Development Program projects mention the as important. Providing road access into this catchment accumulation of river diversion, leaving large stretches of poses a very significant risk of logging and poaching. It river (up to 93 percent, see table 6.2) virtually dry during is therefore doubtful that the terrestrial ecosystem will lengthy periods of the year. The consequences of such be “stably formed and the terrestrial fauna will tend to physical impacts on aquatic ecosystems were therefore return and live in the area surrounding the reservoir” as not addressed. Although the assessments often recog- is stated in the EMP . nize the change in river environment immediately down- stream of an individual dam, the impact was thought to Planning problems of another kind were observed in be marginal because, for example, the aquatic ecosys- the Sap River basin. It proved to be especially difficult tem of the stream section “is very poor because of slop- to obtain details on cascade development in Sap, prob- ing terrain with many big rocks” (Phuc Khnah 2010a). In ably because eight hydropower projects and six different the absence of an ecological inventory, it is difficult to companies are involved. In Sap, only one dam is opera- evaluate this judgment. tional; two projects were suspended in 2011 for lack of funding and remain suspended as of April 2013. Further- Furthermore, these environmental procedures do not more, some of the dams seem not to be attuned to each identify the interaction between hydropower devel- other; for example, the turbine capacity of Ta Niet (7 .2 opment and deforestation that could lead to cumula- cubic meters per second [m3/s]) in the middle of the cas- tive impacts. The World Bank Environmental Safeguard cade is considerably lower than that of Tat Ngoang (14.8 Framework OP/BP 4.04 Natural Habitats asks for caution m3/s) just upstream of Ta Niet. Ta Niet will therefore act in projects that would lead to the significant loss or degra- as a bottleneck in the operation of the cascade. In addi- dation of any critical natural habitats, including those that tion, the very low reservoir volumes (and zero volume of are unprotected but of known high conservation value. the most upstream dam) provide a challenge to optimal This may be relevant in the case of Nam Tha: it is the only joint operation. cascade being developed in a catchment area containing a remarkable diversity of flora and fauna in pristine forest As indicated in chapter 7, the implementation of envi- cover. However, the environmental management plan ronmental flows in the cascades is complex. The basic (EMP) document for Nam Tha 5 states that at the project problem is balancing the requirement for environmental site “there are no wild animals. The terrestrial animal sys- purposes against resulting reductions in power genera- tem is only small animals, such as mouse, dog, weasel, tion. Environmental flows are generally not addressed at 49 50 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades  RTICLE 25: MAINTAINING MINIMUM FLOW IN RIVER BASINS—GOVERNMENTAL DECREE 120/2008/ND-CP ON BOX 8.1 A RIVER BASIN MANAGEMENT 1. MONRE [the Ministry of Natural Resources and Environment] shall lead and coordinate with related ministries to regulate the determination of the minimum flows to be maintained in river basins. 2. Determination of the minimum flows: • MONRE shall survey, investigate and determine the minimum flow requirements for the river/river section, or for each water source, in the river basins named in the Major River Basin List and the Inter-provincial River Basin List; • For international river basins MONRE shall, on behalf of the Government, negotiate an agreement with other countries sharing that international river basin regarding the maintenance of minimum flows in the main stream of the river basins; • The Provincial People’s Committee shall survey, investigate and determine the minimum flow requirements for the river/river section, or for each water source, in the river basins listed in Provincial River Basin List; • The requirement for minimum flow levels in the river/river section must be publicized and comments sought from economic organizations involved with the exploitation and use of water, and representatives of com- munities living in the river basin. 3. The authority to promulgate the minimum flow in river: • MONRE shall promulgate the minimum flow requirements for the river/river section, or for each water source, in the river basins named in the Major River Basin List and the Inter-provincial River Basin List; • The Chairman of the Provincial People’s Committee shall promulgate the minimum flow requirements for the river/river section, or for each water source, in the river basins named in the Provincial River Basin List. 4. Related ministries, ministerial-level agencies, government agencies, and state companies and corporations shall adjust their programs, plans, projects and regulations for water exploitation and use to ensure that the minimum river flows for the promulgated river/river section are maintained. the planning stage, and only since 2005 has the issue for cumulative environmental impact assessments and gotten official attention. Some consultants calculate envi- for promotion of coordination among projects on the ronmental flow requirements based on dry season mean same river for water and environmental management flows using Q90, which is 10 times less than flows under (Suhardiman, de Silva, and Carew-Reid 2011). Only a few normal dry season conditions during which the aquatic strategic environmental assessments for hydropower environment is already stressed. The variable nature of development have been performed and just one for a environmental flows prevents the use of a fixed rule for specific river basin: Vu Gia-Thu Bon river basin (ICEM all river basins in Vietnam. Hence, a more tailor-made 2008). approach is needed. Furthermore, governmental decrees and ministerial circulars are very general in their discus- sions of minimum flows (box 8.1). The efforts by the Min- Suggestions for Planning istry of Natural Resources and Environment to prepare Improvements guidelines for minimum flows and to establish minimum flows in priority rivers (see Instruction Note No. 490/ Vietnam has a well-established institutional framework VPCP-KTN dated July 4, 2012) are therefore welcome. with thorough legal and policy procedures for hydro- power development (see chapter 2). The challenges lie in These observations concur with those made in the previ- the implementation and enforcement of planning rather ous literature regarding the lack of basin-wide planning than in a lack of planning rules. It might even be sug- and management of water and hydropower develop- gested that an overabundance of regulations, decrees, ment. Although many hydropower projects often exist on and decisions for hydropower development jeopardize its one river and in one river basin, there are no procedures effective implementation. Streamlining such procedures, Potential for Improving the Planning and Operation of Small-Scale Hydropower Planning Plants 51 for instance, by drafting specific guidelines for hydro- Optimizing Operating Rules for power cascade development could be considered. These Hydropower could be seen as a tailor-made strategic environment assessment for SHP development. Description of Analysis With regard to cumulative impacts, the scale at which To assess possible improvements to today’s operating those impacts are assessed is most important. This rules and benefits from joint operating rules, two alterna- study focused on one level beyond the single SHP proj- tive situations were modeled, assessed, and compared: ect. The spatial boundary then encountered is the water- shed of the river. Assessment of the impacts at this level • Alternative 1: Existing operating rules or best is urgently needed, as described in the previous section. assumption. Powel Sim was used as the simulation However, in view of the constraints in mitigating the program with hourly resolution. cumulative impacts, it is necessary to scale up one level • Alternative 2: Optimized operation to maximize elec- further to ask what the consequence would be if all rivers tricity revenues for the entire cascade. Short-term and streams were to be occupied with SHP cascades. In Hydro Operation Planning (SHOP) was used as the Vietnam natural habitats are mostly restricted to areas optimization program with hourly resolution. defined by remoteness, high elevation, steep topogra- phy, and other factors that limit suitability for agriculture A workshop was organized in which operating procedures or production forestry. At the same time these areas cor- were discussed with SHP operators. In addition, docu- respond closely to those suitable for SHP development ments describing official operating rules for the plants (ICEM n.d.). Hence, economic development must be bal- were used whenever available. These operating rules anced against preservation of biodiversity. were analyzed for the Ngoi Xan, Nam Tha, Chien, and Sap cascades, Subsequently, possible improvements and One recommendation is that an “intact rivers program” joint operating rules were described. To optimize the use be adopted at the river basin planning level as suggested of available water resources in a basin, joint operating in ICEM (2008). In such a scheme, at least one continu- rules are needed. By studying SHP plants in a cascade ous river waterway in a river basin would be kept free of as a system and not as individual plants, water use for barriers to migration from its headwaters to the ocean, hydropower can be optimized. “Optimal utilization” can and environmentally destructive practices would be be defined as either maximization of hydropower genera- strictly controlled within and adjacent to the intact rivers tion or maximization of hydropower revenue. For all four to maximize habitat quality. Such a scheme would secure cascades, boundary conditions and bottlenecks were complete river continuums that could maintain aquatic identified. Note that neither alternative includes environ- biodiversity and the wild fisheries of the river system, mental flows and other water users in the optimization despite severe disruption to migratory pathways and modeling. This exclusion is further discussed later in this loss and fragmentation of habitats in other parts of the chapter. basin. Not only would the intact river provide an area that would preserve critical fauna by providing for their life cycle requirements, it would serve as an “aquatic faunal Market repository” from which other parts of the system could be repopulated in the future. According to Circular 18/2008 - BCT, the energy price for hydropower projects of less than 30 MW capacity is set Several of Vietnam’s rivers already have high proportions annually. The 2013 prices used in the optimization are of their flows extracted. Based on dry season flows, four given in table 8.1; these data were provided by the cas- basins are in the high stress category, with the Ma River cade operators. being the most stressed (almost 80 percent of dry sea- son flows extracted) and the South East River Cluster TABLE 8.1 ENERGY PRICES, 2013 (US$/kWh) being next (75 percent). The Red River is also approach- ing the high stress zone (Kellogg, Brown and Root 2009). Peak Off peak Therefore trade-offs must be made, and perhaps this trade-off should not be between hydropower develop- Wet season (June–August) 0.029 0.027 ment and ecosystems within each stream, but rather Dry season (September–May) 0.116 0.028 between regulated and unregulated streams at a higher Source: World Bank. scale. Note: Peak periods vary across cascades, but each cascade has five peak hours per day. 52 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades Model Results because of lack of information on how the Nam Chien 1 reservoir is being operated. Theoretical maximum gross Table 8.2 summarizes the plant operation optimization income for this cascade is US$57 .8 million, mainly from model results for the four cascades. For both Ngoi Xan Nam Chien 1. and Nam Tha, production under alternative 1 (“operation today”) is higher than that stated in the design docu- The results of the Powel Sim model indicate that the ments from the developers, suggesting that there is operating schedule is conservative, and in most situ- indeed considerable potential for optimization for these cascades. For the Sap cascade, however, production pro- ations the model indicates that production in off-peak vided by the model appears to be much lower than sug- hours is required. The optimization results show that the gested by the design documents. Therefore, the model Ngoi Xan, Nam Tha, Sap, and Nam Chien cascades could results for Sap indicate that further inquiry is needed. increase income from scheduling with SHOP . These model results can be attributed to a combination of the The simulated increase in average annual energy produc- following: tion for Ngoi Xan, Nam Tha, and Sap ranges between 2 percent and 9 percent and is mainly the result of reduced • Optimized use of the turbines, taking into account water spill with the SHOP model compared with the that their highest efficiency is reached below maxi- Powel Sim model. Most interesting, however, is the con- mum capacity siderable potential increase in revenues, ranging from • A reduction of spill by taking into account the entire 20 percent to 36 percent. Table 8.2 shows that the total cascade theoretical maximum annual gross income for Ngoi Xan • An assumption of perfect foresight of inflows (2010), Nam Tha (1986), and Sap (2004) is US$11.5 mil- (although not possible to fully achieve in reality, the lion, US$10.9 million, and US$7.5 million per year, respec- combination of good historic flow statistics and tively. For Nam Chien, only the results of optimized joint weather forecasts normally provide fairly accurate operation using the SHOP model are shown in table 8.2, projections)  OTAL MODELED ANNUAL ENERGY PRODUCTION AND REVENUES FOR TABLE 8.2 T THE FOUR CASCADES FROM VARIOUS TYPICAL YEARS Ngoi Xan Nam Tha Nam Chien Sap Alternative 1 (“operation today”) (results from Powel Sim) Production from Powel Sim (gigawatt hours) 236.6 200.8 152.7 Production as documented 216 177 1,027 255 Average load (megawatts) 27.0 22.9 17.4 Income (US$ million/year) 9.44 9.00 5.51 Alternative 2 (optimized operation) (results from SHOP) Production (gigawatt hours) 257.7 210.7 1,119.0 156.3 Average load (megawatts) 29.4 24.1 128.0 17.8 Income (US$ million/year) 11.48 10.88 57.80 7.51 Change in marginal values (2 minus 1) Change in production (gigawatt hours) 21.0 9.9 3.6 Percentage difference 8.9 4.9 2.3 Change in average load (megawatts) 2.41 1.2 0.4 Change in income (US$ million/year) 2.04 1.88 2.00 Percentage difference 21.6 20.8 36.3 Source: World Bank. Note: The “typical years” are Ngoi Xan, 2010; Nam Tha, 1986; Nam Chien, 1979; and Sap, 2004. Typical years were chosen based on proximity to mean annual runoff and lack of extremes, that is, neither very dry nor heavy flooding. SHOP = Short-term Hydro Operation Planning model; Powel Sim = Program for short-term hydropower planning (Powel AS Smart Generation family). Potential for Improving the Planning and Operation of Small-Scale Hydropower Planning Plants 53 Power Optimization and Other Water Demands From an integrated water management perspective, opti- mization could partly offset the costs of environmental When developing joint operating rules for a cascade, other flow, thereby reducing the environment-power conflict. water demands, including those for environmental flow, The results from the sensitivity analysis are not conclu- can be an integral part of the system. As shown in chap- sive because environmental flows are usually released ter 6, environmental flow releases will cause a significant during the dry season when electricity prices are high, reduction in power production (between 15 percent and which lowers the average price used in the calculation in 31 percent). If these values are strictly deducted from table 8.2. The conflict could possibly be further reduced the values of energy production in table 8.3, reductions by combining optimization of power revenues with flex- will be the same for “operation today” (alternative 1) ible environmental flow demands (that is, spatially and and optimized operation (alternative 2). Using the model temporally varying environmental flows as needed for results for Ngoi Xan, Nam Tha, and Sap (table 8.2) the environmental purposes). Additional optimization model- power reductions for both alternatives were deducted to ing that includes variable environmental flows is there- perform sensitivity analysis (table 8.3 and figure 8.1) . The fore recommended. The same approach for optimization results show that under optimized conditions with Q95 applies to other water demands, such as irrigation.1 discharge releases, power production and revenues are considerably higher than if environmental flows without For example, optimization for the Glomma and Laagen optimization were to be implemented. In Ngoi Xan, rev- cascade in Norway is undertaken in an adaptive and enues could even be slightly higher than they would be dynamic manner through modeling at the basin scale that without optimization and without environmental flows. also allows for adjustments to be made seasonally and In other words, optimization creates financial room for annually to meet the needs of the riverine environment environmental flows. TABLE 8.3 SENSITIVITY ANALYSIS FOR THE EFFECT OF ENVIRONMENTAL FLOWS UNDER OPTIMIZATION Ngoi Xan Nam Tha Sap Alternative 1: “Operation today” without environmental flows Production (gigawatt hours/year) 236.6 200.8 152.7 Income (US$ million/year) 9.44 9.00 5.51 Average price (US$/kilowatt hour) 0.040 0.045 0.036 Alternative 1+ Environmental Flow: “Operation today” with Q environmental flows 95 Production (gigawatt hours/year) 191.6 143.8 102.7 Income (US$ million/year) 7.64 6.45 3.71 Change in production compared with Alternative 1 (gigawatt hours) −45 −57 −50 Percentage difference −19.0 −28.4 −32.7 Change in income with Alternative 1 (US$ million/year) −1.80 −2.55 −1.80 Percentage difference −19.0 −28.4 −32.7 Alternative 2 + Environmental Flow: Optimized operation with Q95 environmental flows Production (gigawatt hours/year) 212.7 153.7 106.3 Income (US$ million/year) 9.48 7.94 5.11 Average price (US$/kilowatt hour) 0.045 0.052 0.048 Change in production compared with Alternative 1 (gigawatt hours) −23.9 −47.1 −46.4 Percentage difference −10.1 −23.5 −30.4 Change in income compared with Alternative 1 (US$ million/year) 0.04 −1.06 −0.40 Percentage difference 0.4 −11.8 −7.3 Source: World Bank. 54 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades FIGURE 8.1 SENSITIVITY ANALYSIS FOR THE EFFECT OF ENVIRONMENTAL FLOWS UNDER OPTIMIZATION a. Production b. Income 300 Loss due to environmental flow 14 Loss due to environmental flow Production with environmental flow 12 Income with environmental flow 250 10 Gigawatt hours 200 Million US$ 8 150 6 100 4 50 2 0 0 Alt. 1 (NX) Alt. 2 (NX) Alt. 1 (NT) Alt. 2 (NT) Alt. 1 (Sap) Alt. 2 (Sap) Alt. 1 (NX) Alt. 2 (NX) Alt. 1 (NT) Alt. 2 (NT) Alt. 1 (Sap) Alt. 2 (Sap) Source: World Bank. Note: Alt. = alternative; NT = Nam Tha; NX = Ngoi Xan. (environmental flows) and other water users. Such adap- maximize peak generation in all the SHP plants in the tive and integrated management benefits the environ- cascade. By using an optimization model or optimization ment and various user groups under different conditions. planning tool, the best joint operation of all power plants The flow scheme under the cascade joint operating rule can be achieved. aims to secure optimal implementation of environmental flows for the best environmental effect. Managing basin Joint operation also has to take into consideration the operation in an integrated fashion ensures sustainable efficiency curves for all plants. In general, a turbine is use of water resources, including environmental flows most efficient at a point lower than maximum capacity, and optimal water usage for all users, and thus helps the say, at some 80 percent of capacity. Turbines should usu- basin organization guarantee reliability of supply to the ally not be operated at maximum load except in peak hydropower industry in the basin (Lillehammer 2011). hours, when the peak price is much higher than the off- peak price, or in the wet season when water inflows are generally high. Opportunities for Optimization The information on operating rules for all cascades in Each of the four cascades in this study was analyzed this study indicates that production planners have a high for optimized operation. The smallest reservoir in each degree of freedom. Consequently, removing any of the cascade can only be used for daily peaking. Reservoirs practices the power plant operators have today is not rec- with larger volumes can be used for weekly and to some ommended. More important would be to highlight pos- extent even seasonal regulation. These larger reservoirs sible opportunities for optimal production planning when are Trong Ho in Ngoi Xan; Nam Tha 3 in Nam Tha; Nam it comes to both operating rules and joint operation in Chien 1 in Chien; and Chieng Pan, Sap Viet, and Phieng cascades. Cong in Sap. The most significant benefit to joint opera- tion of the reservoirs and power plants is the ability to Good joint operations would ideally be overseen by one operate these larger reservoirs to maximize peaking gen- planner, in a common operation center,2 for all power eration in all downstream power plants. plants in a cascade. The planner would need good his- torical flow statistics and hydrological and meteorological In Nam Chien, the largest reservoir is very large, and forecasts for the coming hours and days. Joint opera- will most probably be operated on a seasonal basis not tion is most important in the dry season, when there are directly linked to needs in the downstream SHP plants. large variations between peak and off-peak prices that Electricity Vietnam pays to generators. A special challenge in Sap is the “bottleneck” in Ta Niet and how to operate the cascade with as little spill as The linchpin to success is the largest reservoir, specifi- possible at this plant without losing peak capacity in the cally, how to operate and utilize the stored water volume, other plants. both in the short term and on a longer-term basis, to Potential for Improving the Planning and Operation of Small-Scale Hydropower Planning Plants 55 Joint Maintenance be removed so daily storage can be obtained. In contrast, all the reservoirs in Sap are very small, so flushing them General frequently will be important. Nam Chien 1 is a large res- ervoir, so no major removal of sediments will be possi- The main types of maintenance are the following: ble. However, the expected lifetime of its active reservoir is long. Nam Chien 2 is flushed every other year. • Maintaining the live storage volume of the reser- voirs by sediment handling (flushing sediments and The effect on energy production of sediment in the res- the like) ervoirs is shown in table 8.4. The reductions in annual • Maintenance of the electromechanical parts to keep energy are caused by increased spill due to reductions in the plants running efficiently available reservoir capacity. • Others (civil works, refurbishment, upgrading, and so on) Maintenance of Electromechanical Parts and Other Civil Works Sediment Handling So far the maintenance undertaken has been oil filling In the Nam Tha and Ngoi Xan cascades, a larger reservoir and minor works, and there are no special signs of wear- is situated upstream (Nam Tha 3 and Trung Ho, respec- ing of the turbines. When needed, refurbishing turbines tively), making sediment removal more difficult. There- (repair, coating or changing of runners/runner blades) one fore these reservoirs will have limited lifetimes, but it by one can be undertaken in the dry season to reduce is important to have clean intakes so the plants can act or avoid loss of energy production. The civil works struc- as run-of-the-river when the reservoir is filled with sedi- tures are regularly inspected for cracks, corrosion, leak- ment. In that case, part of the sediment could possibly age, tightness, and so on. TABLE 8.4 REDUCTION IN ANNUAL ENERGY PRODUCTION FOR VARIOUS SEDIMENT FILLING SCENARIOS Reduction in annual energy Scenario Cascade production (gigawatt hours) Nam Chien 1 Upper reservoir, Nam Chien: 100 percent live storage, no sediment 4.0 Other reservoirs: 0 percent live storage, filled with sediment Nam Tha 1 Upper reservoir, Nam Tha 3: 100 percent live storage, no sediment 1.1 Other reservoirs: 0 percent live storage, filled with sediment 2 Upper reservoir, Nam Tha 3: 0 percent live storage, filled with sediment 5.0 Other reservoirs: 100 percent live storage, no sediment 3 All reservoirs: 0 percent live storage, filled with sediment 6.1 Ngoi Xan 1 Upper reservoir, Trung Ho: 100 percent live storage, no sediment 2.7 Other reservoirs: 0 percent live storage, filled with sediment 2 Upper reservoir, Trung Ho: 0 percent live storage, filled with sediment 8.3 Other reservoirs: 100 percent live storage, filled with sediment 3 All reservoirs: 0 percent live storage, filled with sediment 11.1 Sap 1 All reservoirs: 0 percent live storage, filled with sediment 19.1 Source: World Bank. 56 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades Conclusion References Current planning procedures do not fully acknowledge ICEM (International Center for Environmental Management). the potentially significant cumulative impacts from SHP 2008. “Strategic Environmental Assessment of the cascade development. The prescribed environmen- Quang Nam Province Hydropower Plan for the Vu Gia-Thu tal assessments for the studied hydropower cascades Bon River Basin.” Prepared for the ADB, MONRE, MOITT mainly focus on each plant’s local effects, and address & EVN, Hanoi, Vietnam. ADB Technical Assistance Con- impacts to the broader river basin weakly, if at all. With sultant’s Report. regard to joint operation, the simulations indicate signifi- ICEM. n.d. “Biodiversity and Development of the Hydropower cant potential to increase energy production, partly as a Sector: Lessons from the Vietnamese Experience, Vol- result of reduced spill. These findings lead to the formula- ume II – Hydropower and Biodiversity: The Use of Strate- tion in the next chapter of specific policy recommenda- gic Environmental Assessment as an Assessment Tool. ” tions to improve the sustainability of SHP development in Vietnam. Kellogg, Brown and Root. 2009. “Preparation of a Monitoring ” TA4903-VIE and Evaluation Strategy for the Water Sector. Water Sector Review Project. ADB Technical Assistance Notes Consultant’s Report. Lillehammer, L. 2011. “Benefit Sharing and Hydropower Devel- 1. In all studied cascades except Sap, irrigation demands were found not to be in conflict with electricity production, mainly because irriga- opment: Enhancing Development Benefits of Hydro- tion off-takes occurred further downstream, where flows were not power Investment through an Operational Framework. ” influenced by the cascade. Glomma and Lågen Basin – Case Study Report. World 2. A common operations center is admittedly difficult to establish Bank, Washington, DC. in cascades with many different owners. Global experience, for example, in Scandinavia, shows that joint operations do exist and Phuc Khanh Energy Development and Construction Investment can be achieved on a commercial basis, providing shared benefits Corporation. 2010a. “Environmental Management Plan for all owners. ” for Nam Tha 4 Small Hydropower Project. ———. 2010b. “Environmental Management Plan. Nam Tha 5 ” Small Hydropower Project. Suhardiman, D., S. de Silva, and J. Carew-Reid. 2011. “Policy Review and Institutional Analysis of the Hydropower Sec- tor in Lao PDR, Cambodia and Vietnam. ” Mekong (MK1) Project on Optimizing Reservoir Management for Liveli- hoods, Challenge Program for Water and Food. Interna- tional Water Management Institute, International Centre for Environmental Management, and CGIAR Challenge Program on Water and Food. 9 Conclusions and Recommendations Development of Small-Scale hydropower project with corresponding installed turbine Hydropower in Vietnam capacity. Risks for deforestation and impacts on biodiver- sity also follow from the opening up of pristine areas with Small-scale hydropower (SHP) in Vietnam has come a access roads. These are examples of indirect cumulative long way, benefiting from the knowledge gained from impacts that are often ignored. developing hydropower in the country over the past 50 years. The well-established institutional framework in On the other side of the coin, because SHP cascades Vietnam includes legal and policy procedures for hydro- are often built in remote mountainous areas, unsuitable power development, and experience and skills are for agriculture, resettlement of people and conflicts with embedded in the organizations of the major ministries, irrigation are normally minor. Impacts on river flows are institutes, and local consultants. mostly limited to within the cascade because of the normally small reservoir volumes for SHP . The effect of Nevertheless, challenges to SHP development remain. peaking—producing energy during only a few hours of The studies of six SHP cascades in northwest Vietnam the day—may have negative impacts on water users just indicate that the cumulative impacts of building several downstream of the cascade during the dry season, but small dams in a river may be significant. SHP cascade the studies of the six cascades in northwest Vietnam development creates trade-offs with values important to indicate that such impacts are limited. The cumulative other stakeholders, similar to the development of individ- impacts on project-affected peoples related to SHP in ual large hydropower plants. Therefore, one main conclu- Vietnam are, therefore, antagonistic because the addi- sion of this report is that planning and development for tion of more plants upstream will not significantly change SHP should focus on the system (or cascade) level rather the downstream flow regime. than on individual projects. The studies of the six river cascades further indicate that The studies for this report find that SHP cascades as a optimizing the operation of the SHP plants as a system system tend to have significant impacts through aquatic would yield significantly higher power production and habitat fragmentation because the series of diversion higher revenues, but providing environmental flows schemes significantly reduces river flows for long dis- would reduce power production and revenues. Thus, tances. Cumulative impacts on aquatic fauna are thus not from the policy maker’s perspective, balancing the trade- strictly additive but synergistic because the SHP cascade offs between the private benefits to SHP operators and exacerbates the impacts on migration and mobility of riv- the external benefits to the environment is important. erine animals. Furthermore, although land take is small The application of joint planning, joint operations, and for each project, the accumulated required land for the joint maintenance of the SHP projects in the cascades cascade as a whole may be comparable to that of a large will lower costs and increase total benefits. 57 58 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades Recommendations for Policy Makers • Provide incentives for private developers to build, operate, and maintain SHP cascades in an Vietnam has already taken many essential policy steps efficient, environmentally sound, and participa- to support the sustainable development of SHP. Recent tory way. Ownership of cascades by individual or examples are the decrees requiring certain minimum collaborative companies can be promoted for joint environmental flow releases and minimum land take per operations and maintenance, and the capacity of pri- installed megawatt for new development. vate developers can be built for the use of power optimization tools and for the implementation of cor- The studies underpinning this report, however, high- porate social responsibility programs. light the difficulties associated with the enforcement of general rules on individual new projects. Minimum flow These two recommendations illustrate the need to requirements for biodiversity or ecosystem services for work on two different scales. The first recommendation local people vary considerably by region, river, and even focuses on the country-wide and regional planning scale, parts of the stream. And effects on deforestation and bio- which guides where SHP projects should be built (and diversity may be much different from the physical foot- where not). This step should be the responsibility of the print of individual SHP plants. government and should clarify, at both the regional and river basin levels, how the national decrees should be The main policy recommendation in this report is, implemented (for example, quantification of environmen- therefore, to break the paradigm of planning and tal flows). The second recommendation focuses on the enforcing rules for SHP on a one-project-at-a-time cascade scale, to guide how SHP projects can be jointly basis. The government of Vietnam should strengthen optimized for maximum revenue and minimum impact. planning for SHP at both the regional and national lev- Although the responsibility of private developers, the els, and should promote the development of robust and government should provide appropriate guidance and efficient cascades in rivers that are the most suitable incentives. based on multiple criteria. Policy changes should focus on future new development, but should also address the The main goal of the policy recommendations is to focus implementation of “no-regret” measures for existing on what is needed for sustainable SHP—a clear regu- cascades, implying measures that are beneficial regard- latory framework and guidelines, and the capacity and less of changes in the future. incentives for developers to implement the framework and guidelines. Government-led planning at both the The main recommended steps for policy makers are the regional and river basin levels should provide clarity and following: detailed guidance on how the national decrees should be interpreted and implemented. Development and dissem- • Strengthen the requirements for and perfor- ination of skills for optimizing construction, operation, mance of participatory technical optimization and maintenance, including active stakeholder participa- and strategic environmental assessments at tion, will increase the capacity of developers. The set- both the river basin and regional levels. Stron- ting of long-term tariffs should provide developers with ger assessments will enable both the optimization the confidence to make the necessary up-front capital of hydropower plant operation and the evaluation investments not just for civil works, but also for sustain- of impacts at the system level. The result will be an able environmental and social management. overall improvement in power production efficiency as well as the most reasonable and cost-effective mitigation of negative impacts. Because SHP proj- Recommendations for Planners, ect areas are also affected by exogenous factors Regulators, and Developers (especially anthropogenic factors and the growing economy), the cumulative impacts of SHP cascades Based on the observations, analysis, and conclusions will need to be periodically reassessed and updated, from the study, a number of tangible recommendations and actions and measures will need to be adjusted have arisen that may improve the sustainability of SHP accordingly. development in Vietnam. These recommendations target the category of end users of the study that encompasses operators and developers, planners, and regulators (see table 4.1). Conclusions and Recommendations 59 Improve Cascade Efficiency • Promote the design of robust cascades, with at least one upstream dam having weekly or monthly SHP cascades are intended to produce energy and earn storage capacity. Larger reservoirs, preferably revenues from a given river or stream. Optimization upstream, should be an integral part of cascade depends on both the objectives and boundary condi- planning when developing new SHP cascades in tions. With respect to the objectives, there is a differ- Vietnam. ence between producing maximum energy and gaining maximum revenues, which is especially relevant during • Raise awareness of the benefits of joint cooperation the dry season when higher tariffs during peaking hours across companies and promote and design mecha- apply. Non–energy production objectives, such as envi- nisms for convening multiple companies along ronmental flows and flood prevention, should also play one cascade. a role (although the small reservoirs associated with most SHP plants often minimize their significance). Joint operation is a promising means for optimizing water use Reduce Negative Environmental Impacts efficiency throughout the cascade, making effective envi- ronmental and social management financially feasible. Environmental flows are an important and legally man- dated mechanism for at least partially offsetting negative The key to success is the largest reservoir, specifically, cascade impacts. However, implementation of environ- how to operate and utilize the stored water volume both mental flows is challenging. Several of the existing dams in the short term and on a longer-term basis, to maximize do not have the technical ability to release an environ- peak generation in all the SHP plants in the cascade. mental flow. Furthermore, the absence of quantitative Joint operation also has to take into consideration the guidelines leads to subjective and arbitrary flow require- efficiency curves for all plants in the cascade and utiliza- ments, the ecological efficiency of which is doubtful. tion of the smaller reservoirs. An optimization model or optimization planning tool can help achieve the best joint The environmental impacts of SHP cascades may go operation of the power plants. beyond the simple summing of impacts from individual hydropower projects, and their magnitude and sig- For the studied cascades and for those planned for the nificance are especially dependent on other river basin future, maintenance will become more important as developments. Because SHP development is dominated the plants age. Reservoirs get filled with silt, and tur- by diversion schemes with small reservoirs, the down- bine efficiency declines because of wear on the units. stream cumulative effect is marginal. However, because The reservoirs should be flushed of sediment simulta- the cascades are mainly located in upstream, remote, neously, when the plants are shut down. This method mountainous regions, the risks of opening and disturb- ensures that more flushing water is available and that ing pristine areas of relatively high natural value can be water with suspended material will not pass through the considerable. Furthermore, the aquatic habitat fragmen- turbines, which could increase wear. The units should be tation and loss of river connectivity associated with cas- refurbished one by one in a planned manner to minimize cades is very hard to mitigate. production and income losses. Whether units should be upgraded in the dry or wet season will depend on which The main recommendations to reduce the environmental is considered most important to the maximization of rev- impacts of SHP cascades are the following: enues, the value of peak capacity or the loss of more kilowatt hours in the wet season. • Prescribe a set of procedures or methods for set- ting environmental flows, and ensure that appro- The main recommendations for planners, developers, priate environmental flow requirements are included and regulators are the following: early in the planning of hydropower cascades. Both volume and pattern of discharges should be • Promote joint operation and maintenance and addressed, duly considering the importance of pro- use an optimization model or optimization plan- viding high, medium, and low flow conditions during ning tool to obtain maximum energy revenues for specific periods of the year. Flexibility for regional SHP cascades while accommodating other water and local conditions should be allowed, after proper uses, including environmental flows. study and evaluation. 60 Cumulative Impacts and Joint Operation of Small-Scale Hydropower Cascades BOX 9.1 BENEFIT SHARING FOR HYDROPOWER DEVELOPMENT Benefit sharing is a promising concept in sustainably implementing hydropower and water infrastructure projects, and is emerging as a supplement to the standard requirements of compensation and mitigation. Benefit sharing is being driven by a societal responsibility to ensure that local communities end up with something better than pre- project economic conditions. For benefit sharing to work, certain core mechanisms must be in place: policies and the regulatory framework (government), corporate social responsibility policies (project proponent), and community acceptance of the project. Cooperation among these three parties enables tripartite partnerships (Lillehammer, Martin, and Dhillion 2011). Mitigation measures are normally anchored in commitments related to the environmental impact assessment and licensing processes, either in international guidelines or more specifically in national legislation and regulatory pro- cesses. Benefit sharing goes beyond these commitments and focuses on enhancing community development related to opportunities created by the projects instead of only mitigating impacts. Figure B9.1.1 illustrates the rela- tionship and differences between traditional compensation and mitigation measures compared with benefit sharing. FLOW CHART SHOWING MEASURES THAT GO BEYOND THEIR EXPECTED OBLIGATORY LIMITS FIGURE B9.1.1  IN QUALITY AND TIME Measures going beyond • Community development obligatory requirements— (for example, public health) continuity of mitigation processes • Conservation of watershed, • Scoping biodiversity, and PES • ESIA and participatory consultation • Obligatory mitigation and compensation • Rights over resource use • Safeguard frameworks • Enhancement measures and land • Public-private partnerships for example, FSMP, RAP, CDP as key enablers • Revenue allocation Benefit sharing (for example., taxes, license fees, royalties) • Development funds Source: Lillehammer, Martin, and Dhillion 2011. Note: CDP = community development plan; ESIA = environmental and social impact assessment; ESMP = environmental and social management plan; PES = payment for ecological services; RAP = resettlement action plan. Vietnam has been developing and piloting benefit sharing for local communities affected by hydropower projects since 2006. The A’Vuong hydropower project was selected as a pilot study for benefit sharing in Vietnam, where the government of Vietnam and the Asian Development Bank were involved. As part of the technical assistance, a draft decree on benefit sharing was prepared in 2008, for pilot testing for the A’Vuong project. The pilot was completed in 2010 and implemented by the Electricity Regulatory Authority of Vietnam in close cooperation with the Provincial People’s Committee of Quang Nam Province. The pilot included a wide range of actions such as direct involvement of communities and payments for ecological services (Lillehammer, Martin, and Dhillion 2011). Such a benefit-sharing framework can be similarly utilized in small-scale hydropower development in Vietnam for future sustainability of the planning process. Conclusions and Recommendations 61 • Implement regular strategic environmental Reduce Negative Social Impacts assessments for SHP development, at least at Because of their inherent characteristics (small reser- the cascade level, but preferably at the river basin voirs located in remote and thinly populated environ- or provincial planning level. Closer interaction and ments), SHP cascades usually affect only small numbers cooperation between hydropower planning and river of people. Resettlement is often not required, but land basin management, involving existing institutional take does affect the livelihoods of local people, for which structures, is recommended. they are compensated. In general, it seems that hydro- power development has a positive effect on the local • Introduce the concept of intact rivers, whereby economy as well as on individual incomes. However, at least one continuous stream of the river basin because cumulative effects may occur (partly due to local remains free of any hydropower development, as economic development spurred by the SHP plant) that an alternative or additional offset of the negative are not always easy to mitigate, and may impinge on the impacts created by habitat fragmentation and lost traditional livelihood of ethnic minorities often found in connectivity caused by SHP development in other these locations, hydropower owners could be specifically areas of the river basin. tasked with supporting local sustainable development. Benefit sharing, which goes beyond the one-time com- • If a strategic environmental assessment is not con- pensation for lost land, could be the vehicle. ducted, implement a cumulative impact assess- ment (CIA) for new SHP development, the outcome The main recommendations for reducing negative social of which (for example, recommended environmen- impacts are the following: tal flows, sediment management, social benefit sharing, and water quality monitoring) should be • Promote communication between developers and mandated and reflected in the respective conces- locally affected people, and develop awareness and sion agreement. Also, the option of either SHP or capacity of all parties in sustainability issues. This medium to large hydropower should be explicitly could be accomplished by providing developers with addressed in the CIA. incentives to implement corporate social responsi- bility programs. • Update construction codes and standards to include technical facilities for releasing environmental • Include benefit-sharing options (see box 9.1) as a flows and to improve construction supervision, part of the planning and operation process to ensure licensing, and operational permits so as to ensure environmental integrity, social equity, and economic compliance with regulations regarding environmen- efficiency in river basin development. tal flows. Reference Lillehammer, L., O. San Martin, and S. Dhillion. 2011. “Benefit Sharing and Hydropower Development: Enhancing Devel- opment Benefits of Hydropower Investment through an Operational Framework. ” Final Synthesis Report. SWECO report for the World Bank. The World Bank Group Asia Sustainable and Alternative Energy Program 1818 H Street, NW Washington, DC 20433 USA www.worldbank.org/astae