The Politics of Hydropower Shortages in a Warming World

Johnny Guy, Ishana Ratan, you are part of a team at UC Berkeley that includes Professor Jennifer Bussell, that received a grant from IGCC to conduct research related to the security implications of climate change. What’s the problem to solve?

Johnathan Guy: Climate change is affecting hydropower production, both for dams that have already been built or will be built, and other hydropower structures, like run-of-river turbines. It’s making hydropower production less predictable. Under previous climatological conditions, precipitation patterns and the rate of snow melts over the course of a year were things we understood pretty well. People were able to plan and anticipate the supply. Climate change makes it much, much harder to predict and plan.

Climate change is also resulting in structural declines in overall hydropower production and increased seasonality in some cases. So in some places, there might be more overall production, but way more of it is happening during a wet season, and less is happening during the dry season. This poses challenges. If countries aren’t able to manage those challenges, they are going to contribute to lots of problems, including energy insecurity, issues with development, getting electricity to firms and consumers, and geopolitical tensions that result from unstable water flows.

Ishana Ratan: We’re thinking about this both in terms of short- and long-term responses. In the short term, how do states choose to distribute the costs of needing to impose blackouts on certain communities? How do they manage civil unrest that arises from power outages and other implications of energy shortages? In the long term, we want to dive into the debates that are happening within political institutions and legislative bodies. States are taking measures to identify how this is going to impact the power systems in the longer term, [and we want to understand] the longer-term planning processes that will shape distributional outcomes for years to come in terms of building new types of energy generation, reconfiguring the grid, and other measures for resiliency.

Johnathan Guy: Our main outcome of interest is: what sort of power sources are states drawing upon to replace some of the lost hydropower? In some cases, it’s more fossil fuels and other cases, it’s more renewable energy. Hydropower is the biggest low carbon energy source in the world right now, yet it’s out because of climate change.

How do hydropower shortages and disruptions lead to conflict and security challenges?

Ishana Ratan: When there’s a big drought and hydropower production gets cut, the state has to make choices about where energy supply is allocated. That means they’ll likely have to cut power to certain parts of the country if there’s not enough to go around to meet demand. I was chatting with a colleague about blackouts in Brazil for example. In the early 2000s, after droughts, the state had to choose: are we going to cut power to a major urban area? This could trigger civil unrest or a backlash at the polls (if people are left without power for hours a day, they’re obviously not going to think very favorably of their government). Politicians might face repercussions for choosing to cut power to their constituencies, even if there are technical reasons for it.

Johnathan Guy: It’s hard to definitively tie climate change to any particular conflict. We’ve definitely seen conflicts over hydropower projects due to uncertainty over the hydrological and economic impacts of dams, for example on the Nepal-India border and on the Ethiopia-Egypt border. Interestingly, climate change-induced fluctuations in hydropower production are also forcing India and Nepal to come closer together in terms of their trade. Droughts are affecting seasonal agricultural production in Nepal, and the increasingly unpredictable flow of water from the Himalayas into Bihar is impacting agricultural production in India as well. Water interdependence could potentially have a more stabilizing effect on Nepal and India relations.

But unless proper trade mechanisms are in place, unpredictability in hydro flows and thus electricity production could be difficult to manage, especially from a Nepali point of view. India definitely seems to have greater bargaining power, in part due to its size. Shifts in this bargaining power due to climate change should trigger conflict, as predicted by international relations theory, but it’s not yet clear to me which partner in the relationship might get the advantage. This relates to China-India relations as well: India refuses to import power from Nepali hydropower projects that have Chinese involvement, presumably in an attempt to bring Nepal into its own orbit and away from China. How climate change might influence this development, I’m not yet sure.

How big a role does hydropower play in different places?

Ishana Ratan: Our project focuses on countries where over 50 percent of their generation share is hydroelectricity. This is Colombia, Brazil, and Nepal, for example. There are at least 40 or 50 countries in our sampling frame where hydro is the majority of their generation capacity—not an insignificant number.

That said, in other countries, where it’s not the majority, but still a significant portion—like in Pakistan, it’s about 30 percent of generation—hydro is still really important. In this project, we’re looking at countries where hydro plays such a fundamental role in electricity generation that these countries will be impacted in a devastating way when drought affects their electricity mix. But this issue applies quite broadly across other countries, even countries that haven’t fully tapped their hydro potential yet, like Malaysia. This project could inform countries that are looking to explore their hydro capacity because it’s such an attractive potential for renewable electricity. But it might not be the most prudent thing to build, depending on how a country could be affected by climate change.

Johnathan Guy: Globally about 15 to 16 percent of electricity production is hydro, which doesn’t seem like a lot, but it’s distributed very unevenly. In Latin America, the main baseload power is hydro. Same for Central and parts of East Africa, some of the Himalayan states, like Afghanistan, northern India, Bhutan, and Nepal, and a few Southeast Asian countries, namely Laos, Cambodia, Myanmar, and Vietnam.

Ishana, you mentioned that one of the unique things about your research is that you’re looking at short- and longer-term responses to hydropower shortages. Can you elaborate on that?

Ishana Ratan: When I think of short-term, I think about what happens when it’s been three months and there’s no rain, and the reservoirs that we’ve been using are depleted. In 2015, there was a big drought in Latin America, and for both Colombia and Brazil, two of our cases, hydro supply was very, very impacted. The short-term response is that you import and then switch on thermal plants as backup capacity. But where do you import electricity to recover those losses, so that you don’t have to cut power immediately to balance the grid?

In the longer term, how does the government plan to structure energy auctions to increase generation capacity? Is the government going to think about new cross-border electricity trading measures, like Johnny mentioned in Nepal and India? Are you going to build that transmission line, so that maybe in a couple of years, next time there’s no rain, it’s already there? It won’t fix your problem right now, but it will reduce the costs of having to scramble it last minute five years down the line.

Johnathan Guy: Climate change is causing more gradual changes in aggregate production, but it’s also making these kinds of short-term shocks more frequent and more severe and often more durable. Part of the thing to understand is that a lot of countries don’t have the capacity for planning and anticipating the shocks. And so unfortunately, in some cases, they’ve had to learn through experience to think about and plan for climate change, and haven’t had a lot of the capacity for foresight. We’re hoping this project will shed light on what forms of state capacity might be most effective at planning and managing climate risks.

In your work so far, what are you seeing that countries do when there’s a shock? Do politics tend to drive decisions, or technical constraints, or a combination?

Johnathan Guy: It is definitely political. There are already political factors within the system that predispose the build out of some projects more than others in terms of technology, scale, size, and ownership. In Nepal, it’s very difficult to build a large-scale reservoir for a lot of reasons that are very political, ranging from difficulties with resettlement, to political volatility influencing the assignment of contracts to construction firms, to difficulties and breakdowns of bargaining with international financial institutions. These factors existed before climate change came onto the radar, and they shape the responses that seem to be available to politicians, at least from their view.

Countries vary significantly in the ways in which climate change is affecting hydropower production. For some countries, it’s more about the long-term structural decline, versus other countries, it’s more about managing increasing volatility, or even perhaps overproduction. The nature of the challenge also determines what’s needed. Do you need more variable power? Do you need more baseload power? Do you want something that needs to be scaled up or down very quickly, like natural gas, or some forms of like reservoir? We’re political scientists, so we’re going to be predisposed to saying that politics is really what’s driving what’s happening. But of course, a big part of the story, too, is the development of technical expertise, prediction models, advancements in hydrology and meteorology and stuff like that.

Ishana Ratan: I haven’t started the fieldwork yet, but what’s coming out of my background scoping in Colombia is that it’s very political. Colombia’s energy sector is a competitive market, based on supply and demand. But the government has been reasonably effective in implementing programs that make sure that there’s backup power in a way that protects consumers from high prices under scarcity conditions. Backup power is still mostly thermal, and we’d like that to be renewable in the future. But it’s encouraging that the government and the general population support paying a charge in the present moment, so that when there is a bad drought, backup thermal generators can come online without charging an incredibly high price for power due to scarcity conditions. This is one politically feasible agreement that has allowed them to avoid imposing blackouts on urban areas and really antagonizing a large part of the electorate. I’m interested to further investigate how compromises like this one come about between different actors in the market, and the general population. There’s a balancing act between regulating an energy market that operates based on supply and demand in a competitive way and ensuring that the government’s responsibility in terms of providing essential services is also met.

To the extent that the social sciences get involved in energy issues, it’s usually economists. There’s not as much attention to political scientists or sociologists or anthropologists. I’m curious how you view your role in the space?

Johnathan Guy: When it comes to energy transitions, economists often think in terms of least-cost solutions and estimating the social cost of carbon. Think about the size of a carbon tax, or optimal renewable energy subsidies as part of targeted industrial policy. Those things are really valuable. But hydropower systems are incredibly complicated. They involve huge governmental bureaucracies and all sorts of stakeholders that make claims on politicians. In countries that are very hydropower dependent, political news cycles often revolve around the development of these projects and their operation and their failure. In Nepal, everyone tells me that hydropower is extremely political. To me, it’s clear that political science has an important contribution to make.

Ishana Ratan: I see our role as using political science tools to better understand how certain institutional configurations came to be and why interest groups that benefit from the structures of power currently exist, so that we can understand why they endure and why certain pathways may be more or less politically feasible. So, there might be the most efficient way to do things, but because of the constellation of interests in a country’s energy market, those efficient outcomes might not be possible. Our role is to understand why institutional structures are the way they are so that we can lay out what a possible future actually could be in terms of decarbonization and energy resiliency in these places

Image credit: The Srisailam Dam in India. Photo courtesy of Wiki Commons.