This research paper provides a comprehensive analysis of hydropower's role in advancing the United Nations Sustainable Development Goals, with particular focus on clean energy (SDG7), climate action (SDG13), sustainable water management (SDG6), and inclusive economic development. The study highlights the multifaceted importance of hydropower, not only as a source of low-carbon electricity, but also as an essential contributor to water storage, flood control, drought resilience, and grid stability. While hydropower is one of the most established renewable energy technologies, it faces renewed attention in today's era of climate change and energy transition, where reliability and resilience are as important as decarbonization.
The report explores hydropower's contributions and limitations across diverse regions, drawing on case studies from Sub-Saharan Africa, Southeast Asia, and South America. It examines the challenges of aligning large-scale projects with modern sustainability frameworks, emphasizing how environmental and social risks—such as biodiversity loss, resettlement concerns, and community opposition—must be carefully managed to secure long-term acceptance and viability. Financing and regulatory hurdles are analyzed in depth, showing how high capital costs, patient investment needs, complex permitting, and inconsistent policy frameworks often delay or derail projects. Attention is given to emerging financing solutions, including blended finance, public-private partnerships, and the rise of green and climate bonds, which are reshaping how investors approach infrastructure aligned with ESG criteria.
The study also evaluates technological advances that are redefining the hydropower sector. Pumped storage hydropower is presented as the dominant form of grid-scale energy storage, critical for integrating intermittent renewables such as solar and wind. Innovations in closed-loop systems, variable-speed pump turbines, and underground or offshore pumped storage demonstrate how the sector is adapting to both technical demands and environmental expectations. The discussion on ESG criteria underscores how access to finance increasingly depends on meeting international benchmarks like the IFC Performance Standards, the Equator Principles, and the EU Sustainable Finance Taxonomy, which collectively push hydropower toward more sustainable practices.
By combining technical, financial, and governance perspectives, this paper provides actionable insights for investors, policymakers, development institutions, consultants, and academic researchers. It balances critical analysis of risks with a forward-looking assessment of opportunities, positioning hydropower as both a driver of sustainable growth and a sector that must evolve rapidly to meet 21st-century challenges.
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Source: Best Practices in ESG, Renewable Energy PDF: Hydropower and Sustainable Development Goals PDF (PDF) Document, Hunter Hughes
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