The Nature Conservancy publishes the study ‘The Power of Rivers: a business case’ done in partnership with PSR

Publication – 05.05.2017

Forecasts show a doubling of renewables by 2030 as nations around the world turn to low-carbon energy. This global shift is key to maintaining the climate within safe boundaries, but also presents complex challenges as solar, wind and hydropower development can have significant impacts on our lands and waters. The Nature Conservancy – in partnership with McGill University, The University of Manchester, and PSR – has released a new report, The Power of Rivers: A Business Case, that shows how system-scale planning and management of hydropower can yield economic, financial and environmental benefits. A leading low-carbon energy source, hydropower will represent nearly US$2 trillion USD of investment between now and 2040. Through a system-scale approach—what the report calls Hydropower by Design—we can identify a set of projects that capture system-level financial efficiencies, reduce social conflict and investment risk and maintain connectivity of hundreds of thousands of river kilometers. In this study, different PSR’s models were used. HERA was used to apply modern dam design and costing frameworks to 97 potential dams that were selected for the Magdalena river basin at Colombia. OptGen was used to conduct the Business as Usual (BaU) Project Selection by utilizing a ‘cherry picking’ methodology that prioritizes sites on an incremental, individual basis according to the highest Net Present Value. Optfolio was used to generate the investor return profile (ex- risk considerations) to create projected IRR (Internal Rate of Return) distribution curve. The study also included a variant in which development risks were incorporated in the development cost of projects due to eventual entrance delays and cost overruns. Project risk premium depends on its social and environmental complexity and is fed into HERA for portfolio selection. To find out more this study, click here.