International Conference on Hydropower in Developing Countries
Geneva, 13.10.2022 - Opening Address by Minister Simonetta Sommaruga, 13 October 2022
The spoken word is final
Dear Ministers, Dear Deputy Ministers, Dear Permanent Secretary,
Dear Director General La Camera,
Ladies and Gentlemen,
in this room and virtually present,
It is my pleasure and honor to open today’s conference. I’m pleased to see some of you here in Geneva.
You may know that we originally planned this conference in spring 2020. The virtual presence of many of you shows that we have also learnt new, climate-friendly ways of exchanging during the pandemic.
We now face a new crisis, this time in the field of energy.
The war in Ukraine and Russia’s weaponization of gas shows us how vulnerable we are. I’m aware that some of you are indirectly impacted, by inflation, high oil prices and LNG being snatched away by European buyers.
One response to reduce dependence on fossil fuels is hydropower.
This conference is about how to accelerate deployment of hydropower in your countries: countries, which hold the largest untapped hydro potential, but struggle to attract investment.
The IEA warns about stagnating clean energy investment in emerging and developing economies, while clean energy investment increases in advanced economies and in China.
All experts, the International Hydropower Association, IRENA and the International Energy Agency, concur:
hydropower is being developed at only about half the rate, which is necessary to reach the targets of the Paris Agreement and net zero emissions by mid-century.
Your countries are disadvantaged by the high cost of capital. This has a severe impact on hydropower, which is very capital intensive.
The lion’s share of hydropower is financed by multilateral banks, a few bilateral development agencies or China.
Switzerland is one of the very few countries, which continues to support the hydropower engagement of the World Bank Group.
Our State Secretariat for Economic Affairs co-finances the Bank’s Hydropower Development Facility. This Facility supports countries with tailored solutions and funds feasibility studies for sustainable hydropower projects.
Only very few private companies, large international or small local, and funds dare to invest in hydropower. Some are present here today and I salute them.
Switzerland’s hydropower tradition is more than a century old. We built our first hydro plants in the late nineteenth century.
After the first World War we decided to electrify our railways to substitute coal, which had become scarce because of the war.
A hydro boom followed in the 1950s and 1960s.
Today, hydro is the backbone of our electricity supply, with a share of 60%. Our trains are 100% electrified and source 90% of their power from hydro.
Much Swiss engineering know-how has contributed to hydropower in your countries.
On Saturday, you will visit the recently inaugurated Nant-de-Drance pumped storage and the floating solar at Lac des Toules, or the Grande-Dixence plant.
Nant-de-Drance is a symbol of regional integration.
It was built not only for Switzerland, but to balance the European electricity system and help integrate wind and solar. Hydro, solar and wind, this is the dream team for our future.
I’m aware that regional power pools are being advanced in many of your regions and I can only encourage you to continue.
Grande-Dixence was for many years the world’s highest dam and can be considered as the monument of Swiss hydropower. I congratulate my Tajik colleague for having overtaken us in terms of height.
As for floating solar at Lac des Toules: Many of you have much larger floating solar plants, but not at such high altitude, where reflected sunlight on snow increases production.
You may wonder why Switzerland decided to organize this conference. While exchanging with many of you at IRENA meetings, we felt that there is a different perception of hydropower in Europe or North America, and in your countries.
In Europe, hydropower is seen as an enabler for large shares of wind and solar.
In most of your countries, hydropower is seen primarily as a solution for energy access and development.
We hope that this conference will help rebalance these two perceptions.
Hydropower has been an instrument of industrial development in many of your countries.
Today, new models are emerging, such as the use of hydropower to produce and export hydrogen. Such schemes must be developed by taking due account of host country needs.
I’m aware that hydropower is facing many challenges – finance, social acceptance, climate, environment.
We face these same challenges, in our own way, in Switzerland. For a decade, until Europe emerged from the pandemic, hydropower was making losses because of low market prices.
This has completely changed now.
New capacity was almost impossible as projects were contested in endless court procedures.
This should also change. We are crafting a new consensus and speeding up procedures.
Environmental and social concerns must be addressed if hydropower is to thrive.
That’s why Switzerland supports the Hydropower Sustainability Standard, launched in September 2021 at the World Hydropower Congress in San José.
The Standard is a multi-stakeholder global certification system, designed and governed by governments, companies, civil society and financiers. Our State Secretariat for the Economy funds capacity building and the application of a hydropower sustainability tool in all countries supported by the Swiss Development Cooperation.
The Nant-de-Drance plant, which some of you will visit, was accepted after intense consultations. The local population and environmental NGOs were involved from the beginning.
It was accepted because the promoter took fourteen compensation measures to reduce the environmental impact, including the creation of biotopes.
In this same spirit of balancing interests, I convened a hydro roundtable with representatives of regional governments, industry and environmental groups. Together, we agreed on moving ahead with fifteen priority projects.
Hydropower dams are also about water management, irrigation and disaster prevention. These issues are very acute in your countries.
Sustainable and integrated water resources management has been a priority of Swiss Development Cooperation for decades.
Switzerland was a co-initiator of a sustainable development goal on water (SDG 6) and supports its implementation.
The beneficiaries of hydropower are not necessarily at the dam site.
To overcome this dilemma, we have a so-called water royalty.
Hydropower producers pay local communities for the use of water, just like mining or oil companies pay for the use of resources.
I’m aware that this adds a cost and makes affordability more challenging. But I recognize that some of you are introducing some compensation schemes.
Dams and their operating regime can considerably alter river flows. Therefore, all stakeholders and countries need to be involved to share the benefits of dams.
Transboundary water cooperation is at the heart of Switzerland’s Blue Peace initiative, which links water, sustainable development and peace.
One appeal of hydropower is that it spans all sizes of projects - from large, billion-dollar projects which take ten years to materialize, to very small projects, which can be developed by local entrepreneurs, banks and communities off-grid.
I welcome that one session of the conference is dedicated to small hydro.
Finally, you may have heard that Swiss people are somewhat perfectionists. It’s true. As you will see on Saturday our hydro plants are well maintained.
In the same spirit, Switzerland, through the World Bank, has been advocating adequate Operations and Maintenance for hydropower in many countries.
Hydropower is like any other infrastructure: if not properly maintained, it produces less. A session will be devoted to this.
While preparing the conference, we noticed that many countries have interesting solutions. But these are seldom replicated.
You will have ample time for discussions in the coming three days. Make full use of them. If some interesting solution may inspire others, we will consider the conference a success.
I wish you many fruitful exchanges. Enjoy Geneva, the lake, the mountains and sites you will visit.
Thank you for your attention.
Address for enquiries
Communication DETEC, +41 58 462 55 11
Publisher
General Secretariat of the Federal Department of Environment, Transport, Energy and Communications; General Secretariat DETEC
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