The Riverscope methodology includes three interlinked components of assessment:
– the Rapid Assessment based on a quantitative geospatial analysis;
– the Financial Assessment based on an Expected Delays Model and a bespoke Discounted Cashflow Model, and finally;
– the Deep Dive which is based on a thorough qualitative investigation of specific project issues and/or areas of interest.
This combined approach offers a comprehensive, data-driven assessment process that can be applied to a project, portfolio and/or an area (e.g. a country or region).
Further information on the overarching Riverscope assessment approach can be found in the Process document below.
Details of approaches, methodologies and data sources used to develop Riverscope can be found in the Methodology document below.
ESG risks are systematically underestimated by hydropower developers and financiers, which means that any investment into hydropower should be reviewed.
The hydropower sector should not have access to concessional finance, given its poor commercial, social and environmental case, especially when compared to alternatives.
Where large hydropower projects are pushed forward, high social and environmental standards are needed to improve impact and mitigate risk. To date this has been largely inadequate.
Demand growth and distribution has been directly affected by COVID-19. These uncertain future demand profiles call for a more gradual approach to energy roll out, facilitated by alternatives.
Hydropower is both a contributor to and victim of climate impact. Run-of-river projects are lower impact options, yet they are more vulnerable to climate impacts.
Large hydropower projects can create regional political tensions over their impacts on transboundary river systems. There is an increasing need to better understand the cumulative and transboundary impacts of hydropower so these can be factored into regional-level energy planning.
Large hydropower is often developed with intention of bulk energy exports. But high risks and implementation challenges often make hydropower a driver of debt rather than development.
Riverscope General Summary
This Riverscope synthesis collates overarching findings from the five Riverscope pilots.
It provides insight into the commercial, social and environmental risks common to the hydropower sector, and compares hydropower to alternative energy technologies.
01 - Koukoutamba
Koukoutamba is a multi-purpose dam proposed in the Labé region of Guinea, with a planned capacity of 294MW.
Three-quarters of the energy is intended for export to the West Africa Power Pool, while a quarter will be used domestically.
02 - Luang Prabang
Luang Prabang is a hydroelectric run-of-river dam planned for the mainstream of the Mekong River, 25km upstream of the World Heritage Site of Luang Prabang City, in Laos.
It has a planned capacity of 1460MW, most of which will be exported to Thailand and Vietnam.
03 - Pak Lay
Pak Lay is a run-of-river hydropower project with a planned capacity of 770MW and is one of six dams planned on the Mekong mainstream in Northern Laos.
Mixed reports suggest that Pak Lay will either export most of its energy to Thailand, or keep it for domestic consumption.
04 - Sambor
Sambor is run-of-river hydropower dam planned for the Mekong mainstream in Cambodia. We considered a 2600MW version of the project, which has been fraught with complications since inception, including the withdrawal of initial project developers.
Sambor is currently suspended until 2030, along with all mainstream hydropower projects in Cambodia.
05 - Batang Toru
Batang Toru is a run-of-river dam planned for electricity production in North Sumatra, Indonesia, with a planned capacity of 510MW.
Although Batang Toru claims adherence to the IFC Performance Standards, Riverscope points to non-compliance with most of the Standards.
Climate Change Assessment
This report highlights the need to better understand climate risks in the hydropower sector. We are now actively working on ways to better integrate climate risk into the Riverscope assessment process.
Portfolio analyses (forthcoming)
We are currently analyzing several hydropower portfolios, including both developers and financial institutions.
These analyses will benchmark and rank assets, drawing out key themes and patterns across holdings. Where possible, these will be uploaded in due course but please contact us for a sample.
Area analyses (forthcoming)
We are working on an analysis of a region that is experiencing some of the most rapid hydropower development in the world. This analysis will highlight the riskiest assets while also clearly defining alternative options.
Naturally, it will take a more cumulative view of social and environmental risks than our asset-level analyses. Our area analysis will be presented here once finalized but please reach out if you would like to know more.