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nor<strong>the</strong>rn South America, <strong>the</strong> Caribbean <strong>and</strong> parts of sou<strong>the</strong>rn Asia (Ebinger <strong>and</strong> Vergara,2011). Ano<strong>the</strong>r trend is a substantial increase in heavy precipitation events in manyregions, even in areas that have experienced a decrease in overall precipitation.To assess climate change impacts on hydropower, long-term changes in climatevariables are translated into run-off (Su <strong>and</strong> Xie, 2003; Madani <strong>and</strong> Lund, 2010; Singh,Thompson et al., 2010). The areas most affected include mountainous areas, valleys <strong>and</strong>rivers fed by melting snow <strong>and</strong> ice, where run-off <strong>and</strong> early spring discharge haveincreased (Dussaillant, Benito et al., 2010). However, as glaciers <strong>and</strong> snow melt <strong>and</strong>precipitation patterns change, run-off is likely to decrease. These impacts severely affect<strong>the</strong> availability of hydropower resources at regional <strong>and</strong> local levels. The warming oflakes <strong>and</strong> rivers affect <strong>the</strong> <strong>the</strong>rmal structure <strong>and</strong> water quality (Delpla, Baures et al.,2011). An indirect impact is increased competition <strong>for</strong> water among economic sectorssuch as agriculture, energy <strong>and</strong> recreation.The supply of electricity from hydropower depends partly on <strong>the</strong> variation in water flows<strong>and</strong> partly on installed generation capacity. Most systems are designed based onhistorical records assuming a stable climate, but increasingly analysis try to modelprojected changes in hydropower generation (Kim <strong>and</strong> Kaluarachchi, 2009). Two factorsare particularly important <strong>for</strong> <strong>the</strong> vulnerability of hydropower to climate change impacts:1) The share of hydropower in <strong>the</strong> energy mix of <strong>the</strong> system, <strong>and</strong> 2) Integration oftransmission networks nationally <strong>and</strong> regionally, as this decides whe<strong>the</strong>r plants should beoptimized individually or in <strong>the</strong> context of a larger energy system. Small run-of-riverplants offer little flexibility, but are at <strong>the</strong> same time associated with much lowerinvestment costs, whereas reservoir storage capacity can compensate <strong>for</strong> seasonal – evenannual – variations in water flows (Raje <strong>and</strong> Mujumdar, 2010).Peer reviewed literature is larger in volume <strong>and</strong> available <strong>for</strong> more regions of <strong>the</strong> world<strong>for</strong> hydropower than <strong>for</strong> wind power, although developing country analysis is underrepresented(Mideksa <strong>and</strong> Kallbekken, 2010)5. A study by Harrison et al. (2003)analyses <strong>the</strong> impacts of climate change on financial risk in hydropower projects using <strong>the</strong>Zambezi river basin as a case. They find that climate change has <strong>the</strong> potential to bedoubly damaging <strong>for</strong> hydropower with <strong>the</strong> alteration of both <strong>the</strong> expected return fromhydroelectric installations <strong>and</strong> <strong>the</strong> financial risk that <strong>the</strong>y face. Large parts of Africa relyheavily on hydropower <strong>for</strong> electricity production <strong>and</strong> recent droughts have hadsignificant impacts on power supply <strong>and</strong> economies (Eberhard et al., 2008; Karakezi etal., 2009). Fur<strong>the</strong>r analyses of financial risk implications would be valuable both <strong>for</strong>Africa <strong>and</strong> generally.In relation to liquid biofuels, <strong>the</strong> crops used as raw material to produce ethanol <strong>and</strong>biodiesel such as sugarcane, soybeans <strong>and</strong> maize are vulnerable to <strong>the</strong> effects of climatechange. Climate change affects temperature, precipitation patterns, extreme wea<strong>the</strong>revents (droughts, floods, storms, fires <strong>and</strong> frost) <strong>and</strong> <strong>the</strong> level of CO 2 affecting <strong>the</strong> rate ofphotosyn<strong>the</strong>sis, which all have significant impacts on crops (Dhakhwa, Campbell et al.,5 Studies include detailed analyses of impacts caused by <strong>the</strong> anticipated consequences of climatechange on Peru’s hydrology <strong>and</strong> hydropower potential (World Bank 2010c; World Bank, 2010d);hydropower generation vulnerability to climate change <strong>and</strong> water management practices in Brazil(Freitas <strong>and</strong> Soito, 2009); linkages between energy, poverty <strong>and</strong> climate change in Latin America<strong>and</strong> <strong>the</strong> Caribbean (Bariloche Foundation, 2009); analysis of climate change implications onhydropower in <strong>the</strong> Nordic region (Beldring et al. 2006; Fenger, 2007); evaluation of <strong>the</strong> impacts onhydropower, power plant efficiency, unproductive spills <strong>and</strong> reservoir reliability due to changes in<strong>the</strong> hydrological regimes <strong>for</strong> <strong>the</strong> Peribonka River water resource system in Quebec (Minville et al.,2009); analysis of <strong>the</strong> impacts of projected climate change on two Aegean water basins <strong>and</strong> relatedissue of water stress <strong>for</strong> competing uses (Ozkul, 2009); large scale distributed hydrologicalmodelling to study <strong>the</strong> impact of climate change on <strong>the</strong> water flows of <strong>the</strong> mountainous Upper-Danube watershed in Central Europe (Mauser <strong>and</strong> Bach, 2009); impacts on hydropower productionbased on <strong>the</strong> Colorado River (Barnett et al., 2004) <strong>and</strong> <strong>the</strong> Central Valley (van Rheenen et al., 2003)in <strong>the</strong> United States.Risø International <strong>Energy</strong> Conference 2011 Proceedings Page 29

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