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Trung Son Hydropower Project: Hydropower FAQs

What is hydropower?

There are many types of hydropower projects being implemented around the world, ranging in size and purpose – either solely hydro or multi-purpose infrastructures. The World Bank’s portfolio includes run-of-river, rehabilitation and water storage projects that feature hydropower.

  • Run-of-river: Projects that do not affect the natural river flow more than for daily storage.
    Rehabilitation: Upgrading, refurbishing, and changing operations at existing facilities, which can be run-of-river or storage projects.
  • Storage: Allows for seasonal collection of water, which can have multiple uses.

Trung Son is a water storage project.

Why is Trung Son called a multi-purpose dam?

Through project design and operations, multi-purpose dams provide several benefits. They can feature several water management tools, such as hydropower generation, irrigation, domestic and industrial water supplies, water storage, and protection from floods and droughts. When well developed and managed, multi-purpose infrastructures provide important opportunities for urban and rural communities in developing countries.

Trung Son is a multipurpose power generation and flood control project.

What is the role of hydropower in the world?

Currently, 19% of the world’s electricity is generated from hydropower sources. In several developed countries such as Canada, Norway, and Switzerland, hydropower is a major energy source. Countries that are part of the Organization for Economic Co-operation and Development (OECD) have developed approximately 70% of their hydropower capabilities compared to 5% in Sub-Sahara Africa. Many in the developing world, such as India, China, and East Africa, are recognizing hydropower as a critical component in their energy and water plans. Vietnam’s actual electricity share coming from hydropower is 31% of the mix , other sources are gas and coal.

How is hydropower different from other energy resources?

Hydropower, a renewable energy and low-carbon fuel as declared by the 2002 World Summit on Sustainable Development, does not produce the same harmful emissions as fossil fuels, such as natural gas, oil, or coal. It is also, for most countries, a domestic resource and not subject to the volatility of the international fossil fuel markets. Projects experience significant start-up costs but face low operating costs. In addition, hydropower projects have longevity, frequently being used for 50 years or more.

Why is hydropower complicated?

The World Bank has placed much attention on minimizing the impacts of new hydropower projects by enforcing stringent safeguards and policies.

One of the most effective environmental and social mitigation measure is good site selection, to ensure a proposed projects will cause relatively little damage in the first place. Trung Son was selected after three sites were investigated and follows all Bank’s policies and safeguards.

What are the issues concerning hydropower?

Protecting affected people and the environmental are the main concerns as are the financial impacts of a project.

Environmental impact:

Hydropower projects generate renewable energy while producing less harmful emissions than thermal power plants, which burn fossil fuels, such as natural gas, fuel oil, or coal. Some hydropower projects, including large ones, have the potential for a negative impact on the environment if not carefully implemented. They can inundate lands and change natural water flows, which can affect terrestrial and aquatic ecosystems. It is important to consider environmental mitigation and adaptation, along with guidelines from the Environmental Impact Assessment and Environmental Management Plan, when considering a project.

Climate change impact:

Climate change may impact the quantity and pattern of water at hydropower sites, which is why it is important to conduct hydropower forecasts and scenario testing and to design smart, flexible infrastructure. Water infrastructure and storage are vital tools in managing the effects of climate change and increased vulnerability to water variability. Seasonal storage can protect communities from catastrophic events, such as floods and droughts, and can have multiple water uses. However, certain projects that are not well designed may emit greenhouse gasses. As the World Bank and the World Commission on Dams state, it is necessary to have strict environmental safeguards and careful site selection to mitigate these effects.

Social impact:

Great effort is made to minimize the impact of hydropower projects on local and indigenous people. Measures are taken to displace the least amount of people, if any at all, and to provide improved resettlement options for those affected. The World Bank finds displacement of  individuals a significant consideration in reviewing a potential project and has safeguards to minimize the social impact, preserve cultures and communities, and ensure that all stakeholders, including the poor, share in the benefits.

Financial implications:

Hydropower projects experience significant start-up costs, which require large sums of financial support. However, they face low operating costs. These projects are frequently used for 50 years or more, providing steady revenues which can be allocated towards domestic poverty alleviation projects.

How does the World Bank help governments implement hydropower projects?

The World Bank uses strict safeguards, policies, and due diligence to carefully review proposals from governments to assess (1) the impact of engagement and non-engagement (2) the need for support and (3) the sustainability and quality of a project. In addition to financial support, the Bank provides sound planning guidance, careful supervision, technical assistance, and capacity building.

The Bank also works with national governments, the international community, and project financiers. Once a project receives support, there is an active oversight role to ensure compliance with the agreed project execution and management, including resettlement action plans and environmental management plans.

How does the World Bank implement the World Commission on Dams’ guidelines?

The World Bank supports the core values and strategic priorities in the World Commission on Dams (WCD) report. The WCD priorities, along with the International Energy Association guidelines and the International Hydropower Association's Assessment Protocol are valuable quality enhancement tools for the evaluation and management of sustainable hydropower projects. Such tools are complementary to, not a replacement of the World Bank safeguard policies which are the institution's compliance tool and the WCD described as "...the most sophisticated set of policies, operational procedures and guidelines amongst the international donor community."

What is the extent of the WBG’s energy portfolio?

The World Bank Group is responding to the global energy challenge both alongside our client countries and in international fora. The WBG is growing and transforming its energy operations.

By all analyses, all forms of energy will be needed in the foreseeable future to help citizens get the energy they need and want. The WBG energy portfolio is increasingly oriented toward renewable energies and energy efficiency (RE/EE).

In FY09, the World Bank Group’s (WBG) energy financing was $8.23 billion. Approx. 76% was for non-fossil fuels. Of this 40% was for RE/EE (including all hydro), 36% was for transmission and distribution systems and services, and policy work/sector reform. The remaining 24% was for fossil fuels, the large majority being natural gas (production + thermal generation). In FY09, renewable energy represented 40% of all energy financing, reaching a high of $3.3 billion.

Over the last three years -FY07-08-09 - total WBG energy financing was $19.4 billion. Approx. 75% was for non-fossil fuels, 38% for renewable energy, 37% for all transmission and distribution systems and services, and policy work (investments that support reform of the energy sector). Over the last five years (we are measured by commitments made at an international RE/EE conference in Bonn in 2004) WBG has financed more than $7 billion in RE/EE projects/programs, more than three-and-a-half times the target we committed to.

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