Designing Climate Resilient Hydropower Sector: A Case of Nepal

Designing Climate Resilient Hydropower Sector: The Case of Nepal

Divas B. Basnyat and Dibesh Shrestha

Nepal Development Research Institute (NDRI)

Kathmandu, Nepal

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Climate-Resilient Water Management Approaches: Adaptation in an Age of

Uncertainty

A webinar series from UNESCO, AGWA, & ICIWaRM

Webinar 5 | Climate Risk Assessment on Hydropower

Wednesday, 10 March 2021

08:45-10:15 UTC / 14:30-16:00 Kathmandu

Outline

• Hydropower in Nepal

• Climate and hydrological regime

• Rationale

• Methodology

• Key messages• Vulnerability Assessment

• Adaptation pathways

• Barriers and Entry points

2Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021

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Hydropower in Nepal

Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021

78°E

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Hydrological/Climate Regime

Indian Summer Monsoon (80% rain in JJAS)

Hydrology: -Rainfall-runoff-Glacier melt-Snow melt-Baseflow

• Catchment response – glacier (>~5,000m) and snow-fed (>~3,000m), rain-fed

• Geo-hazards– Landslides, Landslide Dam Outburst Floods, GLOFs, Flash Floods and Riverine Floods, Debris Flows

Snow / Glacier Melt contribution to Discharge( %)

H. Biemans et al. (2019)


RationaleClimate Risk Assessment Approach

• GCM-based Top-Down or A priori scenario definition

• Bottom-up Approach or Ex post scenario definition

Challenges

• Highly variable topography and climate of Nepalese Catchments

• Future changes are highly uncertain

• Current actions for future risks

What is needed is a Robustness-based approach emphasizing preparedness for a range of possible futures.

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Future Climate

VulnerabilityAssessment

Impact Assessment

ClimateRisks

Top-down Approach Bottom-up Approach

Climate Driven

System Driven


Types of Uncertainty• Climate change uncertainty

• Most models project increased monsoon precipitation, but no agreement on winter precipitation

• Wide variations on level of warming (temperature)- glacier/snow melt, evapotranspiration

• Precipitation extremes projected to increase – sedimentation, floods, landslides

• Elevation dependent warming

• Other uncertainties

• Regulatory and policy- tariff, national market, cross-border trading, power mix (including variable renewables- solar, wind)

• Project variables - Cost and time overrun, discount rates

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Clim

ate

Pro

ject

ions

: 2040-2

059

RX

1d

ay


Methodology

• Step 1- Vulnerability Assessment using the bottom-up Climate Risk Assessment (CRA) approach;

• Step 2- Identification of Adaptation Options using the Adaptation Pathways approach;

• Step 3- Understand and address mainstreaming of adaptation in the hydro-power sector through Institutional Analysis and identification of entry points and barriers.

NDRI, PAC & GCAP, 2016 7Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021

Stakeholder-defined Performance Indicators

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Stakeholders Key Performance Indicator (KPI)

Government Policy Maker, Regulator

Power System Reliability and Quality, Marginal Cost, Dam Safety, Design Standards, Social and Environment Impacts

Financial Institutions/ Lending Agencies

Project Economics (Cost and Benefit Stream), Social/Envi Impacts, Dam Safety

Project developer (private and public)

Project economics (NPV, FIRR), Adaptation Cost, Seasonal Energy Generation and Reliability (firm, secondary)

Project Designer, Hydrologists, Engineers

Design Flood, Geo-hazards, GLOF, Sediment, Water Availability (Hydrology)

Communities, Environmental Stakeholders

Dam Safety, Flood and Geo-hazard Risks, Flow Variations, Environmental Flows

Resiliencein terms of:

• Safety• Water/Energy

Security• Economics


Stress Test – Case Study

0

50

100

150

200

1 2 3 4 5 6 7 8 9 10 11 12

Yie

ld(m

m)

U/S

Base +1 C°

+2 C° +3 C°

+4 C° +5 C°

%

0

250

500

750

1000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ene

rgy

(GW

hr)IRR

Catchment Response – Hydrological Model

Hydropower Model

Economic Model

Climate Input

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Feb-11 Apr-11 Jun-11 Jul-11 Sep-11 Nov-11 Dec-11

Co

nce

ntr

atio

n(p

pm

)

Sediment Concentration


Current climate and hydrological variability is a major challenge for Nepal’s hydro- sector

However, there is large variation in this variability

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• Higher variability in smaller catchments, higher in rainfed than in snow-fed catchments

• Run-of-river (ROR) projects more affected by variability than storage projects

• Sediment load generally high, particularly on some catchments

10

20

30


Ene

rgy

(GW

hr)

10

30

50


Ene

rgy

(GW

hr)

High – snow fed

Rain-fed

-20% P, +3 T Extreme Case

Storage > 50 % of Monsoon Runoff Storage = 8 % of Monsoon Runoff

0

250

500

750

1000


Ene

rgy

(GW

hr)

0

100

200

300


Ene

rgy

(GW

hr)

Storage Projects

ROR Projects


The greatest impact of climate change is from increased climate induced hazards, rather than from changes in water availability

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• Financial performance (IRR) of hydro projects designed under current tariff and PPA rates are within performance threshold for projected change

• Increased climate induced hazards – sediment, extreme floods, GLOFs, LDOFs- more important risk and will be exacerbated by climate change

0

2000

4000

6000

8000

0 10 20 30 40 50 60 70 80 90 100

Dis

char

ge (

m3

/se

c)

Distance (km)Tsho Rolpa Thulagi LakeImja Tsho Upper Marsyangdi ADudh Koshi Storage Tamakoshi III / II

0

2000

4000

6000

8000

0 2 4 6 8D

isch

arge

(m

3/s

ec)

Travel Time (hrs)Tsho Rolpa Thulagi Lake

Imja Tsho Upper Marsyangdi A

GLOF Risk


The impact of climate change on hydropower sector is additional to other factors

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In the short-term, current and new plants affected by:

• Current variability, climate- induced geo-hazards, and

• Uncertainty on institutional and regulatory issues related to tariffs and pricing, export opportunities, construction costs (and risks of delays and over runs) and project financing

For future plants (after 2030), the impacts of climate change could be much more significant,

• However, design of these plants need not be finalized now: there is opportunity to learn more about emerging trends and changes, and adjust these investments

• This requires preparation and action today, e.g. on hydro-met data and monitoring

IRR 12%

IRR 11.2%

Base

CC

Learn, Act later

IRR 10.9%

IRR 11.4%

Adapt in design


Current power system suffers from inefficient power mix –resulting in high economic costs

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Run of River Projects

Storage Projects

• Projects designed under current regime (pricing, market and regulatory policy) may not perform as designed with future changes (uncertainty)

• Current power mix - 10% Storage and 80% RoR; Future – approx. equal capacity (47% each) with energy mix at 72% for ROR and 18-22% for storage

0%

20%

40%

60%

80%

100%

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

Ca

pa

cit

y M

ix,

%

Base Case ROR Baae Case Storage

CC Case ROR CC Case Storage

System ExpansionPlan

Adaptation Pathways

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Iterative climate risk management Low or no-regret options

1. Addressing existing climate variability i.e. current adaptation gap

Options that bring immediate economic benefits, and build future resilience to future changes

2. Considering future climate change in immediate decisions with long life-times

Options that allow reductions in future risks, e.g. risk screening, low cost over-design, flexible design, provide greater robustness

3. Planning for future climate challenges, with uncertainty and an iterative (learning) in mind

Iterative plans for future major changesMonitoring programs and iterative portfolios to address future risksLearning over time

Current plants

Planned plants

Future risks

What

act

ion t

o t

ake n

ow

?


Institutional Context, Barriers and Entry Points

• Stakeholder roles and responsibilities, exposure to CC risks, mechanism to implement adaptation, and their influence

• Barriers: investment, institutions, policy (PPAs, regulations)

• Mainstream adaptation into the institutional and policy/sector landscape e.g. policy intervention addressing vulnerabilities to the specific context, location, project size and type (not one size fits all)

• Include climate in existing activities (e.g. Risk screening in Design Guidelines, System Planning, EIA process, PPAs, Dam Safety, Risk Sharing Mechanism) to make it climate smart, rather than stand-alone

• Invest to learn: monitoring, research and pilots, to improve future decisions and planning

15Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021

Thank you!

Divas B. Basnyat, [email protected]@gmail.com

Dibesh Shrestha, [email protected]

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NDRI Water and Climate Program: https://ndri.org.np/project_cat/water-climate-program/Weather Generator Tool: https://ndri.org.np/ourproject/weather-generator-and-climate-change-scenario-generator-for-climate-risk-assessment/

Middle MarshyangdiHEP

mailto:[email protected]



https://ndri.org.np/project_cat/water-climate-program/

https://ndri.org.np/ourproject/weather-generator-and-climate-change-scenario-generator-for-climate-risk-assessment/

Designing Climate Resilient Hydropower Sector: A Case of Nepal

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