The Political Economy of Hydropower Dependant Nations

Abstract

Imad Ahmed's deep dive into the story of Zambia's development of and dependency on hydropower provides a timely input into how countries with hydro resources should think about their energy transitions to zero-net emissions systems that provide reliable, affordable, and clean energy for all. Like many other countries, Zambia relies on an aging hydropower stock, developed when the speed and the full force of climate impacts seemed either unlikely or far into the future. For countries like Zambia, how can hydro play an optimized role in a diversified energy system, efficiently, serving the environment, people, and industry, as regional weather patterns change? How will they be financed with levels of indebtedness climbing past prudent limits in Zambia and across the region? What is hydropower's role in the energy systems of the future? This book is an excellent place to look back to move forward."-Rachel Kyte, Dean, The Fletcher School, Tufts University, USA; former UN SG Special Representative for Sustainable Energy; former World Bank Group Vice President and Special Envoy for Climate Change "Imad Ahmed has written a fascinating and meticulously researched book on Zambia, which details the various challenges posed by hydroelectric power. This book is a must-read for all interested in Zambia and energy policy in the developing world.

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“…Of the eleven SSA nations with a more than 50% dependency on large hydro (>50 MW), six are SAPP members (Angola, DRC, Malawi, Mozambique, Namibia, and Zambia) and make up 20% of the installed capacity in the SAPP. El-Niño-induced droughts, predicted to occur more frequently as average global temperatures rise, mark this reliance as climate vulnerability [22]. The region's national utility companies are cash poor and typically unable to adapt fully in the face of lost capacity.…”

“…The region's national utility companies are cash poor and typically unable to adapt fully in the face of lost capacity. SAPP data show that Angola, Botswana, the DRC, Malawi, South Africa, Tanzania, and Zimbabwe all had installed capacities greater than their peak demand in 2016, yet they all experienced capacity shortfalls in that drought-stricken year [22]. In such cases, diesel back-up capacity and emergency imports come at a great cost (and with higher emissions).…”

“…Semieniuk and Mazzucato [10] show that financing flows and specific sources of finance create innovation pathways as certain technologies are deployed, proven, and de-risked, resulting in a lower cost of capital in subsequent projects. Ahmed [22] considers Zambia's commitment to large hydro infrastructure, even following droughts in 2015, 2016, and 2019, and suggests a deep ('third degree') path dependency now exists that is based on initial conditions (such as early financial support for hydropower from multilateral development banks) and ignores new information that implies course correction is required. Important political economy dynamics are thought to contribute to lock-in [28,29].…”

“…Emerging from the recent literature are useful quantitative starting points for further climate modelling. As Ahmed notes [22], there are nearly two decades of forecasting that point to harsher and more frequent drought and low reservoir levels in the Zambezi basin, with clear direct impacts for hydropower capacity factors. As a possible benchmark, comparing 2014 and 2016, the average capacity utilisation rate fell from 71% to 54% across Zambia's four large hydropower dams as drought struck.…”

The impact of power outages on households in Zambia

“…As global average temperatures rise, so too do the frequency and intensity of El Niño Southern Oscillation-induced droughts (Wang et al, 2017), which in turn threaten the reliability of hydropower (Ahmed et al, 2020). 1.4 billion people live 1 3 in countries where hydropower constitutes more than a quarter of the electricity production and which have experienced El Niño droughts, meaning many more power outages can be expected around the world (Ahmed, 2021a). Little research has been conducted on the impact of power outages on mental health.…”