iha: EU sustainable finance rules would undervalue hydropower
The International Hydropower Association (IHA) has responded to a public consultation by the European Commission on new rules to define sustainable finance.
While the association welcomes and supports the need for an EU Taxonomy on sustainable activities in order to drive investment in renewable energy, IHA believes the proposal as drafted “raises serious concerns” for the development of a flexible, efficient, and affordable low-carbon energy mix.
As well as failing to treat all renewable energy sources equally, the proposed definition of sustainable electricity storage to exclude open-loop pumped storage hydropower facilities would limit the continent’s clean storage options.
In a statement, Eddie Rich, Chief Executive of IHA, said: “Renewable hydropower is a reliable, versatile and low-cost source of clean electricity generation and responsible water management. In order to boost and balance variable renewable energy sources like wind and solar in the European power grid, we will need more hydropower in the decades to come.
“The EU Taxonomy proposal as drafted risks disincentivising investment in sustainable hydropower projects at the very time we need to scale up access to the vital flexibility and storage services that they provide. Without hydropower, Europe’s clean energy goals and power system resilience could be at risk.”
The draft rules fail to take account of the significant energy storage capacity in Europe’s existing conventional hydropower facilities. These facilities are capable of producing electricity instantaneously to support the integration of variable renewable energy, notes IHA in its response which is publicly available on the EU website.
IHA notes that, under proposed climate mitigation criteria, hydropower is subjected to a life-cycle greenhouse gas emissions assessment, while other renewables such as wind and solar are not. This is despite numerous studies including from the Intergovernmental Panel on Climate Change (IPCC) confirming that hydropower has average life-cycle emissions at similar, or even lower levels than other renewables.
“Hydropower has a long history in Europe, and it remains a leading source of low carbon and renewable electricity,” notes IHA’s response. “In fact, given hydropower’s many flexibility services, it will be increasingly important to balance the growing levels of variable renewable energy on the European grid.