Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO

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Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
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

Designing Climate Resilient Hydropower Sector:
The Case of Nepal

Divas B. Basnyat and Dibesh Shrestha
Nepal Development Research Institute (NDRI)
Kathmandu, Nepal

Wednesday, 10 March 2021
08:45-10:15 UTC / 14:30-16:00 Kathmandu
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Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Outline
• Hydropower in Nepal
• Climate and hydrological regime
• Rationale
• Methodology
• Key messages
       • Vulnerability Assessment
       • Adaptation pathways
       • Barriers and Entry points

Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021   2
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Hydropower in Nepal

                      Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021

                                                          3
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Hydrology:
Hydrological/Climate Regime                                                      Snow / Glacier Melt
                                                                                 contribution          -Rainfall-runoff
                                78°E                                             to Discharge( %)      -Glacier melt
                                                                                                       -Snow melt
                                                                                                       -Baseflow

    Indian Summer
    Monsoon (80%
    rain in JJAS)                                     H. Biemans et al. (2019)

• 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
                                                                                                                  4
  Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Rationale
Climate Risk Assessment Approach             Top-down Approach      Bottom-up Approach
   • GCM-based Top-Down or A priori scenario
     definition                                    Future                 Climate
   • Bottom-up Approach or Ex post scenario        Climate                 Risks
         definition
Challenges
                                                    Climate          System
  • Highly variable topography and climate of       Driven           Driven
    Nepalese Catchments
  • Future changes are highly uncertain
  • Current actions for future risks
What is needed is a Robustness-based
approach emphasizing preparedness for a                  Impact        Vulnerability
range of possible futures.                             Assessment      Assessment
                                                                               5
Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Types of Uncertainty
• Climate change uncertainty
    • Most models project increased monsoon

                                                              Climate Projections : 2040-2059
      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

                                                     RX1day
     (including variable renewables- solar, wind)
   • Project variables - Cost and time overrun,
     discount rates
                                                                                           6
Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
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   7
Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Stakeholder-defined Performance Indicators
Stakeholders                       Key Performance Indicator (KPI)

Government Policy                  Power System Reliability and Quality, Marginal
Maker, Regulator                   Cost, Dam Safety, Design Standards, Social and
                                   Environment Impacts                                 Resilience
Financial             Project Economics (Cost and Benefit Stream),
Institutions/ Lending Social/Envi Impacts, Dam Safety                                  in terms of:
Agencies
Project developer                  Project economics (NPV, FIRR), Adaptation Cost,
(private and public)               Seasonal Energy Generation and Reliability (firm,   • Safety
                                   secondary)
Project Designer,                  Design Flood, Geo-hazards, GLOF, Sediment,          • Water/Energy
Hydrologists,                      Water Availability (Hydrology)                        Security
Engineers
Communities,                       Dam Safety, Flood and Geo-hazard Risks, Flow
                                                                                       • Economics
Environmental                      Variations, Environmental Flows
Stakeholders
                                                                                                  8
Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Stress Test – Case Study                                                                                                      200
                                                                                                                                           Base            +1 C°
                                                         Catchment Response                                                                +2 C°           +3 C°                   U/S

                                                         – Hydrological Model                                                 150
                                                                                                                                           +4 C°           +5 C°
   Climate Input

                                                                                                             Yield(mm)
                                                                                                                              100

                                                                                                                               50

                                                                                                                                0
                                                                                                                                       1   2       3   4   5       6   7   8   9    10 11 12

                                                                                                                                               Sediment Concentration
                                                                                                                             50,000
                                                                                                                             45,000

                                                                                                       Concentration (ppm)
                                                                                                                             40,000

                                                  Hydropower Model                                                           35,000
                                                                                                                             30,000
                                                                                                                             25,000
                                       1000                                                                                  20,000
                   %

                                                                                                                             15,000

           IRR                         750                                                                                   10,000
                       Energy (GWhr)

                                                                                                                              5,000
                                       500                                                                                       -
                                                                                                                                     Feb-11 Apr-11 Jun-11 Jul-11 Sep-11 Nov-11 Dec-11
                                       250

                                         0
                                              Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

                                                                                                Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
 Economic Model                                                                                                                                                                           9
Designing Climate Resilient Hydropower Sector: The Case of Nepal - UNESCO
Current climate and hydrological variability is a major challenge
    for Nepal’s hydro- sector
    However, there is large variation in this variability
    • 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
                                                                                                                                                                                                      ROR Projects
                                                                                                                                                                      50
                                                         Storage Projects

                                                                                                                                                      Energy (GWhr)
                                                                                                                                                                      30
                       Storage > 50 % of Monsoon
                                                                                                                                                                                                High – snow fed
                       Runoff                                                              Storage = 8 % of Monsoon Runoff                                            10
                1000                                                                                                                                                       Jan Feb Mar Apr May Jun   Jul Aug Sep Oct Nov Dec   -20% P, +3 T Extreme Case
                                                                                           300

                 750
                                                                                           200                                                                        30
Energy (GWhr)

                                                                           Energy (GWhr)

                 500

                                                                                                                                                     Energy (GWhr)
                                                                                           100
                 250                                                                                                                                                  20                                Rain-fed
                   0                                                                        0
                       Jan Feb Mar Apr May Jun   Jul Aug Sep Oct Nov Dec                         Jan Feb Mar Apr May Jun   Jul Aug Sep Oct Nov Dec                    10
                                                                                                                                                                           Jan Feb Mar Apr May Jun   Jul Aug Sep Oct Nov Dec

                                                                                                                                                                                                                                                10
Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
The greatest impact of climate change is from increased climate
induced hazards, rather than from changes in water availability
• 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
                                                                     8000

                                                Discharge (m3/sec)
                                                                     6000
           GLOF Risk                                                 4000
                                                                     2000
                                                                        0
                                                                            0 10 20 30 40 50 60 70 80 90 100
                                                                                    Distance (km)
                                                                       Tsho Rolpa             Thulagi Lake
                                                                       Imja Tsho              Upper Marsyangdi A
                                                                       Dudh Koshi Storage     Tamakoshi III / II
                                                                                                                              8000

                                                                                                         Discharge (m3/sec)
                                                                                                                              6000

                                                                                                                              4000

                                                                                                                              2000

                                                                                                                                 0
                                                                                                                                      0            2        4          6            8
                                                                                                                                                  Travel Time (hrs)
                                                                                                                                     Tsho Rolpa                Thulagi Lake
                                                                                                                                     Imja Tsho                 Upper Marsyangdi A       11
 Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
The impact of climate change on hydropower sector is
additional to other factors
In the short-term, current and new plants affected by:
    • Current variability, climate- induced geo-hazards, and
    • Uncertainty on institutional and regulatory issues related      Base              IRR 12%
       to tariffs and pricing, export opportunities, construction
       costs (and risks of delays and over runs) and project           CC              IRR 11.2%
       financing

                                                                    Adapt in design    IRR 10.9%
For future plants (after 2030), the impacts of climate change
could be much more significant,
    • However, design of these plants need not be finalized         Learn, Act later   IRR 11.4%
       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
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Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Current power system suffers from inefficient power mix –
resulting in high economic costs               Run of River 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
                                     100%                                       Storage Projects
                   Capacity Mix, %

                                     80%
                                     60%
                                     40%
System Expansion                     20%
      Plan                            0%

                                            2045
                                            2021
                                            2023
                                            2025
                                            2027
                                            2029
                                            2031
                                            2033
                                            2035
                                            2037
                                            2039
                                            2041
                                            2043

                                            2047
                                            2049
                                            Base Case ROR   Baae Case Storage
                                            CC Case ROR     CC Case Storage                        13
Adaptation Pathways
                                            Iterative climate risk management Low or no-regret options

                                            1. Addressing existing climate           Options that bring immediate economic
                                               variability i.e. current adaptation   benefits, and build future resilience to
                 What action to take now?

Current plants                                 gap                                   future changes

                                            2. Considering future climate change     Options that allow reductions in future
                                               in immediate decisions with long      risks, e.g. risk screening, low cost over-
                                               life-times                            design, flexible design, provide greater
                                                                                     robustness
Planned plants
                                            3. Planning for future climate         Iterative plans for future major changes
                                               challenges, with uncertainty and an Monitoring programs and iterative
                                               iterative (learning) in mind        portfolios to address future risks
                                                                                   Learning over time

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  Future risks                                                                         Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
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
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  Divas B. Basnyat and Dibesh Shrestha, 10 Mar 2021
Thank you!
Divas B. Basnyat, Ph.D.
divas@ndri.org.np
divas.basnyat@gmail.com

Dibesh Shrestha, M.Sc.                           Middle
dibeshshrestha@live.com                          Marshyangdi
                                                 HEP

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/
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