Development of ecological standards for hydropower Development of ecological standards for...

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Development of ecological standards for hydropower

WP 2.1 report from the CLEAN-E project

A report prepared as part of the EIE project „Clean Energy Network for Europe (CLEAN-E)”

December 2005

Written by Jochen Markard and Stefan Vollenweider

Eawag

The project "Clean Energy Network for Europe (CLEAN-E)" is supported by the Euro-pean Commission through the EIE programme (contract no. EIE/04/136/S07.38593).

The sole responsibility for the content of this report lies with the authors. It does not represent the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.

© December 2005

The CLEAN-E project consortium:

Öko-Institut (Coordination)

Inter-University Research Centre for Technology, Work and Culture (IFZ)

IT Power Ltd.

Politecnico di Milano, Dipartimento di Energetica (eERG)

WWF European Policy Office (WWF EPO) WWF/Adena WWF Italy

Comité de Liaison Energies Renouvelables (CLER)

Swedish Society for Nature Conservation (SSNC)

Österreichisches Ökologie-Institut für angewandte Umweltforschung (ÖÖI)

Ecofys

Subcontractors:

Eidgenössische Anstalt für Wasserversorgung, Abwasserreinigung und Gewässerschutz (EAWAG)

Verein für umweltgerechte Elektrizität (VUE)

CLEAN-E Development of ecological standards for hydropower

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The CLEAN-E project Quality labels which define a minimum standard for green electricity products assist consumers to verify the ecological performance of green products. National labelling programmes which have emerged in some European countries are important and power-ful instruments to strengthen consumer confidence in the voluntary green electricity market.

Objectives

The CLEAN-E project will accompany the establishment of new and the improvement of existing green electricity product labels in selected EU Member States. In this regard the CLEAN-E project will support the efforts of the European Green Electricity Net-work Eugene1, a non-profit approach which has set up a minimum standard for green electricity labelling schemes. The Eugene standard will serve as the major point of ori-entation throughout the project.

The establishment of new labels will be accompanied by a wide range of activities. This includes the development of ecological minimum standards for the two key renewable technologies hydropower and biomass. The project also investigates the feasibility of widening the scope of green power labelling towards the integration of energy effi-ciency as well as renewable heat. CLEAN-E analyses the interface of green power la-bels with RES related policies on the national and the EU level including the Guarantee of Origin for renewable electricity and Electricity Disclosure. Furthermore, the project will include a wide range of activities aimed at disseminating and sharing best practices for green power procurement.

Expected key results

• New green power labelling schemes in France, Italy and Spain including the estab-lishment of sound labelling structures and the development of label criteria. Existing labels (e.g. in Sweden and Austria) are intended to be improved towards a harmo-nised European standard.

• Guidelines how to implement ecological minimum standards for hydropower and biomass in the scope of green power labels.

• Procedures and methodologies how to integrate measures in the field of energy effi-ciency and RES-H into the scope of green power labelling schemes.

• Guidelines how to integrate new policies on the EU and Member States' level (e.g. Guarantee of Origin, Electricity Disclosure) and private sector initiatives (such as RECS) in green power labelling schemes.

1 Eugene (www.eugenestandard.org) is an independent network bringing together non-profit organisa-

tions such as national labelling bodies, experts from environmental and consumers organisations, and research institutes. The Eugene network pursues no commercial interest. Some of the Eugene activi-ties have been partly funded by the EU Commission (DG Environment).

Development of ecological standards for hydropower CLEAN-E

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Contents

1 Introduction...............................................................................................................7

Part I: Summary of experiences in Switzerland ....................................................8

2 Greenhydro standard ................................................................................................8 2.1 Policy and commercial context.......................................................................8 2.2 Development of the greenhydro standard ......................................................9 2.3 Concept of the greenhydro standard in brief ................................................10

2.3.1 Basic requirements ....................................................................................... 11 2.3.2 Relation to Swiss legislation......................................................................... 12 2.3.3 Eco-investments............................................................................................ 12 2.3.4 Assessment procedure .................................................................................. 13

2.4 Lessons learned.............................................................................................14

3 Naturemade eco-label .............................................................................................15 3.1 Development of the naturemade label ..........................................................15 3.2 The naturemade label concept in brief .........................................................15 3.3 Integration of the greenhydro standard into the naturemade label...............16 3.4 Facts and figures of eco-labelling in Switzerland ........................................17

3.4.1 Certified power plants .................................................................................. 17 3.4.2 Diffusion of labelled electricity and green power products ......................... 18 3.4.3 Eco-investments............................................................................................ 19 3.4.4 Costs ............................................................................................................. 21

3.5 Lessons learned.............................................................................................22

Part II: General guidelines for the assessment and certification of hydropower plants .....................................................................................24

4 General aspects concerning a transfer of the greenhydro standard to other countries.........................................................................................................24

5 Key issues for implementing the greenhydro standard........................................25 5.1 Reference to good practice for fulfilling the basic requirements .................25

Potential solutions .................................................................................................. 26 5.2 Determination and use of eco-investments...................................................26

Potential solutions .................................................................................................. 26 5.3 Regulations for new or expanded hydropower plants ..................................27

Potential solutions .................................................................................................. 27 5.4 Regulations for small hydropower plants and special types ........................28

Potential solutions .................................................................................................. 28

6 Blueprint for general guidelines ............................................................................29 6.1 General assessment principles ......................................................................29 6.2 Basic requirements .......................................................................................30


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6.3 Eco-investments............................................................................................30 6.4 Regulation for new or expanded power plants .............................................31 6.5 Simplified regulations for small plants and special types of

hydropower plants ........................................................................................31

Part III: Roadmap for implementing the greenhydro standard in other countries ......................................................................................................32

7 Setting up a support network and promotion of the transfer.............................33

8 Feasibility Study......................................................................................................33 8.1 Ecological and technical framework conditions...........................................33 8.2 Analysis of the legal context ........................................................................34 8.3 Analysis of interest positions........................................................................34 8.4 Pilot assessments of hydropower plants .......................................................35 8.5 Public debate and stakeholder involvement .................................................35 8.6 Synthesis .......................................................................................................36

9 Implementation of the national greenhydro standard .........................................36 9.1 Resolution of political issues........................................................................36 9.2 Capacity building with regard to the certification procedure.......................36 9.3 Contractual issues .........................................................................................37 9.4 Establishment of environmental expert working group ...............................38

10 Bibliography ............................................................................................................39


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List of Figures

Figure 1: Greenhydro brand .........................................................................................10 Figure 2: Two-step concept of the greenhydro standard: basic requirements and

eco-investments ............................................................................................10 Figure 3: Environmental management matrix: The basic requirements are

assigned to five so-called management fields and five environmental fields. In addition, individual restoration measures are foreseen, which will be carried out using eco-investments. ...................................................11

Figure 4: Steps of the greenhydro procedure ...............................................................13 Figure 5: Histogram of naturemade star certified power plants, by installed

capacity (2004) .............................................................................................18 Figure 6: Areas in Switzerland where naturemade electricity products are

offered (2003) ...............................................................................................19 Figure 7: Cumulative revenues from production and sales (bars) and expenses

(line) for eco-investments.............................................................................20 Figure 8: Roadmap for implementing the greenhydro standard in other

countries........................................................................................................32

List of Tables

Table 1: Overview of hydropower plants certified with naturemade star (End of 2004) .............................................................................................................17

Table 2: Licensed electricity generation and products in GWh per year ...................18


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1 Introduction

Hydropower is a key source for renewable electricity generation and due to its wide-spread use in many European countries, it has an important potential to be marketed as green power, i.e. as an environmentally sound form of power supply. While offering ecological advantages from a global perspective, the construction and operation of hy-dropower plants may cause quite severe environmental impacts at the local and regional level. These impacts include the extinction of fish populations, a loss of aquatic habi-tats, a fundamental change of natural flow regimes, sinking groundwater levels or a de-terioration of landscapes.

Selling hydropower as green electricity therefore requires a thorough evaluation of the benefits on the global scale and the shortcomings at the local-regional level.

The aim of this report and the respective work package 2.1 is to make the scientific knowledge and the practical experiences with the assessment of hydropower in Switzer-land generally available. The idea is to thus facilitate the transfer of the greenhydro standard to green electricity labelling schemes in other countries.

The report consists of three parts:

The first part summarizes the Swiss experiences with regard to the development of the greenhydro standard and the naturemade eco-label, in which the greenhydro standard is embedded. The aim of this part is to identify major lessons learned and to draw conclu-sions for the intended transfer process.

Part II addresses the actual assessment procedure and a series of key issues, which are value laden. These issues cannot be solved in a general way, e.g. from a scientific or “objective” point of view but have to be negotiated and decided upon in the context of each eco-label. However, we indicate the potential variety of decisions and make rec-ommendations.

The third part, finally, describes a roadmap for transferring the greenhydro standard. This is dedicated to organisations that actually intend to manage the set up of hydro-power certification in countries where no such schemes exist so far.


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Part I: Summary of experiences in Switzerland

2 Greenhydro standard

2.1 Policy and commercial context

In Switzerland, hydropower accounts for roughly 60% of electricity generation and therefore plays a dominant role in the electricity market. In order to understand the de-velopment of a standard for green hydropower together with the set-up of the nature-made eco-label for electricity in Switzerland, we have to briefly review the major events in the political arena related to hydropower.

The first important event was the revision of the Swiss Water Protection Law, which came into effect in 1991. This law increased the ecological minimum standards for hy-dropower, requiring, for instance, precisely defined minimum flow regulations. How-ever, it only applies to new power plants and to those whose licenses expire. In Switzer-land, these licenses typically run over 80 years and so, for the majority of power plants, changes in operation cannot be expected before the year 2020.

Public debate about the revision of the Water Protection Law led to strong political op-position between environmental organisations and electric utilities in the 1980s and early 1990s. The conflict deepened even further due to public protests against new dam construction projects, some of which were finally abandoned. The political debate was also conditioned by the institutional structure of the electricity sector: The sector was – and still is – largely constituted by vertically integrated firms and regional monopolies for electricity distribution. In Switzerland, public authorities hold some 75% of the shares of electric utilities. Therefore, interest conflicts also arouse between federal au-thorities, supporting the Water Protection Law, and regional (cantonal) authorities in their role as shareholders and tax receivers of hydropower plants.

As a second important change, the deregulation of electricity markets began to shape expectations in Switzerland, although the Swiss market is not yet liberalized.1 The pros-pect of a new market order put pressure on hydropower operators to reduce costs and to improve competitiveness. This narrowed the room for manoeuvring with regard to cost-effective ecological improvements even more. However, market liberalisation also opened up new business opportunities for utilities: Experience from other countries showed that some customer segments are willing to pay a premium price for electricity which stems from renewable energy sources and is generated with low environmental impacts.

1 Market liberalization was originally intended to start in 2003 but was then rejected due to a public

vote. A new, modified law for restructuring the electricity market is currently in the parliamentary process.


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In other words, a window of opportunity opened which made green power marketing on the basis of strict environmental criteria a promising alternative to resolve some of the entrenched conflicts in the field of hydropower in Switzerland (Truffer et al. 2001). Various studies highlighted that the success of green power marketing relies on certain key conditions (Markard & Rothenberger 2000; Farhar 1999; Holt 1997). Green power sources should fulfil a set of criteria assuring a good ecological standard and the cus-tomer's financial contribution should be used for ecological improvements in a transpar-ent way. Moreover, electric utilities who want to market green electricity should posi-tion themselves as credible promoters of environmentally benign electricity.

For hydropower, in particular, views differed widely about what constitutes environ-mentally friendly operation modes. Therefore, the need arose to develop a profound standard for environmentally friendly hydropower production, which was neither na-tionally nor internationally available at that time (Markard et al. 2001).

2.2 Development of the greenhydro standard

In Switzerland, the standard for green hydropower was developed together with the naturemade star eco-label, which today applies the greenhydro standard in practice (cf. chapter 3). Development started in 1997, when a research project “Green Electricity from Hydropower” was set up at the Swiss Federal Institute for Aquatic Science (Eawag). The project had the aim of developing criteria and a certification procedure for green hydropower, to support the set up of a national eco-label and to also exchange experiences internationally (Truffer et al. 2002). The research was based on literature reviews, expert workshops and on a case study on a storage power plant in Southern Switzerland. In the case study, a selection of criteria was tested in detailed biological, chemical and physical measurement programs. During the entire project the Eawag team collaborated with other research institutes, private consultants, electric utilities and hydropower operators.

Besides the criteria, a procedure to assess and improve the ecological performance of the power plants had to be developed. An important task in this process was to provide a rather simple scheme in order to overcome the initial reservations of the hydropower industry against the perceived complexity of the approach. Therefore, a step approach was selected, starting with a preliminary study, followed by a main study (resulting in the so-called management concept) and the final audit (cf. Figure 4).

Reservations concerning the assessment procedure were also reduced by defining a spe-cifically adapted investigation programme for small hydropower plants. Moreover, the general procedure was designed according to familiar environmental management sys-tems (such as Environmental Impact Assessment or the ISO 14001 norm) which were already widely accepted in the by industry.

Once the criteria and the assessment procedure were available, pilot certifications were carried out on power plants of various types and sizes. In the course of the pilot certifi-cations, the certification process was optimised and the ecological criteria were subject to a first test of their practicability. In the autumn of 2000, the first hydropower plant


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was certified and awarded the “naturemade star” label. Sales of green hydropower commenced at the end of 2000. In 2001, the greenhydro standard was published (Bratrich & Truffer 2001) and the Eawag project terminated. Furthermore, the greenhy-dro logo has been registered as a protected brand.

Figure 1: Greenhydro brand

2.3 Concept of the greenhydro standard in brief

The idea underlying the greenhydro standard is that certified hydropower plants are characterised by environmentally sound operation and effectively protect the local aquatic ecosytems. This guiding principle applies to all plants, independently of their installed capacity, age or mode of operation. For these requirements to be put into prac-tice in a plausible way, a power station must not only achieve a general standard, but also fulfil more specific requirements adapted to the river’s individual ecological needs and the technical framework conditions of the plant. For this reason the greenhydro standard consists of two components (cf. Figure 2).

ecological integrity

catchment site

greenstandard

basic standard

present statecondition

2. eco-investments

1. basic requirements

Figure 2: Two-step concept of the greenhydro standard: basic requirements and eco-investments

First, hydropower plants have to fulfil a set of basic requirements, which have been for-mulated in a general way. The basic requirements ensure that all certified power plants reach a comparable ecological standard. Second, power plants commit to carrying out measures for the ecological improvement of their immediate surroundings and for the protection of the utilised river. Such measures are financed by an income generated by a fixed surcharge per kWh of green electricity sold (eco-investments). The eco-


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investments are specifically adapted to the ecological situation of the power plant at hand. In the following, we will briefly summarise the two elements. For a more detailed description see Bratrich & Truffer 2001.

2.3.1 Basic requirements

The basic requirements are structured along two dimensions, which are related to the potential environmental impact and the operation of a hydropower station. In both di-mensions five domains are distinguished: The environmental domains include (1) hy-drological character, (2) connectivity of river systems, (3) solids load and morphology of the river, (4) landscape and biotopes and (5) biocenoses and protected species along and in the river (cf. Figure 3). The management domains include: (1) regulations on residual flow, (2) regulations on hydropeaking regime, (3) regulations on reservoir man-agement, (4) guidelines on bed load management and (5) guidelines on an environmen-tally compatible power plant design.

For each field of the resulting matrix, specifications for ecological targets, assessment criteria and methods / literature references of how to verify these criteria are described.

construction& operationconstruction& operationconstruction& operation

reservoirmanagement

reservoirmanagement

reservoirmanagement

bedloadmanagement

bedloadmanagement

bedloadmanagement

hydro-peakinghydro-

peakinghydro-

peakingminimum

flowminimum

flowminimum

flow

management topicsmanagement topicsmanagement topicsmanagement topics

environmental topicsenvironmental topicsenvironmental topicsenvironmental topics

hydrologicalregime

hydrologicalregime

connectivityconnectivity

solid material andchannel structuresolid material andchannel structure

biological communities

biological communities

landscapefeatures

landscapefeatures

minimumflow

minimumflow

minimumflow

•••

1. ecological goals •

••

•••

•••

•••

1. ecological goals

1. ecological goals

set of:

2. criteria 3. literature

set of:

2. criteria 3. literature

•••

•••

•••

•••

•••

Figure 3: Environmental management matrix: The basic requirements are assigned to five so-called management fields and five environmental fields. In addition, individual restoration measures are foreseen, which will be carried out using eco-investments.


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2.3.2 Relation to Swiss legislation

In contrast to the legal requirements for hydropower use in Switzerland the matrix is rather innovative as it combines environmental topics and management topics in a sys-tematic way. It also integrates all essential issues in one scheme, whereas in legislation a series of different laws and regulations (water protection, fishery, environmental pro-tection, nature conservation etc) applies on different levels (national, cantonal). More-over, while some requirements in the fields of minimum flow, reservoir and bedload management as well as construction are also imposed by law, the hydropeaking issue is basically new.

With regard to labelling practice, Swiss stakeholders agreed that the level of the basic requirements should be (more or less) comparable to recently introduced legal require-ments for hydropower use. This implies that the greenhydro standard also refers to the Water Protection Law, which has had little impact so far because it only applies to hy-dropower plants, which have been newly built, reconstructed or which need a renewal of their license. Against this background, one aim of the greenhydro standard in Swit-zerland was to set an incentive for power plants to voluntarily meet a higher standard although the license is still running.

2.3.3 Eco-investments

Besides the basic requirements, the hydropower plant has to invest a fixed payment per kilowatt-hour.2 These so called eco-investments will be used to restore, protect or up-grade the environment in the catchment area of the plant at hand. Eco-investments allow for additional ecological improvements which are adapted to the individual situation of the power plant, thus taking the particularities of each power plant into account.

The improvements financed by eco-investments are intentionally designed to go beyond the level established by the basic requirements, cf. Figure 2. Eco-investments make sure to be “on the safe side” regarding the ecological quality of the power plant because there is some room for interpretation of the basic requirements in every case. In other words, even for experiences auditors it is sometimes difficult to assess whether some advanced improvement measures should be rather regarded as a part of the basic re-quirements or not.

Moreover, eco-investments do not call for certified power plants to be comparable with each other. With eco-investments it is possible to focus on certain aspects which are ecologically sensitive and / or very important from a local stakeholders perspective. Furthermore, eco-investments may serve as a key marketing argument with regard to green power consumers. Due to the link with green power sales the power plant opera-tor can assure that the purchase decision of ecologically oriented customers makes a

2 The amount, which has to be paid for eco-investments, cannot be determined on a scientific basis but

is a political decision, which has to be made by the interest groups who support an eco-label. In the case of the Naturemade-Label (cf. section 3.3) it was decided that 0.9 Rp/kWh (0.6 €ct/kWh) have to be paid for actual green power sales and another 0.1 Rp/kWh (0.067€ct/kWh) have to be paid for the certified amount of energy produced under the label (whether it will be sold as green power or not).


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difference for the environment, i.e. the mitigation of ecological impacts (additionality). Finally, eco-investments provide some flexibility. Firstly, with regard to the selection of actual improvement measures and secondly, as stated above, with the interpretation of the basic requirements.

2.3.4 Assessment procedure

The greenhydro standard provides a step approach for assessing, improving, and con-tinually ensuring the ecological performance of a hydropower plant (Figure 4).

In the first step, the preliminary study, a system overview and a cost estimate are carried out in order to inform the decision whether a certification will be economically viable. Also, criteria most relevant or most critical for the power plant in question are identi-fied.

In the second step, the main study (or management programme), all ecological criteria are checked. Where criteria are not fulfilled by the power plant in the present situation, a management programme is defined which determines of how to fulfil these criteria, e.g. by changes in the power plant operation or by introducing specific river restoration measures. Additionally, the management programme makes suggestions for eco-investments. It develops a list of potential measures and ranking in priority (although the final decision will be left to a roundtable committee of local stakeholders).

Figure 4: Steps of the greenhydro procedure


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As a third step, the audit ensures that all criteria are finally met. The audit will be fol-lowed by a regular success monitoring (step four).

2.4 Lessons learned

Concerning the process of defining criteria for green hydropower, three critical condi-tions for success can be identified:

• the integration of different knowledge stocks to develop a feasible standard,

• a transparent process including an intense communication with stakeholders, and

• an explicit differentiation and handling of facts and values.

In relation to the assessment, the goal of the multi-disciplinary Eawag research team was not to establish a completely new procedure. The group was, therefore, tasked with synthesising available knowledge and gaining new insights for the specific context of Green Hydropower. This required close collaboration with other institutes and private consultants.

Several stakeholders did not accept the research institute as a neutral mediator. Instead, the project team was accused of being an agent of the „opposing side” of the political conflict. Building trust, therefore, turned out to be a major success factor that required a maximum of transparency and recurrent bilateral exchanges with several representatives of all interest groups.

In the course of the project it became clear that there were a number of value questions which had to be addressed in tight interaction with the relevant interest groups. This is especially the case because of the ambivalent role of hydropower, being a renewable energy source but causing substantial local impacts. As a response to these conflicting views, the organisation behind the naturemade label (VUE) and the Eawag team de-cided to judge all renewable energy systems along the same assessment principles, e.g. to apply criteria both at the local and the global level.

Another key question concerned the quality level of the basic requirements; this issue was intensely debated within VUE. After a long negotiation process, the level of basic requirements was set similarly to the ecological quality which is achieved by a newly licensed power plant, i.e. one that fulfils the requirements of the revised Water Protec-tion Law in Switzerland. Other examples for aspects of the assessment procedure based on value judgements were specific criteria for newly built plants, communication rules for the marketing of Green Hydropower, special conditions for small hydropower plants, compensation rules for non-reversible damage to local ecosystems, and the amount per kWh contributed to the eco-investment fund (cf. Footnote 2).

The eco-investment mechanism itself was especially well received among plant opera-tors, regulators and consumers (Bratrich et al. 2004). It provides flexibility (most in-vestments are due only if green electricity is sold), synergy (hydropower plants and regulators join forces, e. g. in revitalisation projects) and transparency (consumers can be informed about the progress in a specific river system). In fact, the mechanism does


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not only further improve the ecological integrity of affected river systems but also serves as a strong marketing tool for highlighting the ecological benefits of green elec-tricity (Hart et al. 2002).

3 Naturemade eco-label

3.1 Development of the naturemade label

As described above, the Swiss situation was characterised by strong political conflict between environmental organisations and electric utilities in the 1990s. The initiative to overcome these tensions came from two pioneers, the municipal utility of Zurich (EWZ) and the World Wide Fund for Nature (WWF). Both agreed that a successful green power label would be mutually beneficial, but could only be achieved by means of co-operation between actors from the electricity sector and NGOs. The utility’s rationale was that it would be important to have credible environmental organisations on board. It also recognised that independent certification was crucial for the success of a green power market as a whole. WWF, on the other hand, saw the potential to speed up the process of ecologically improving power plants to which the new Water Protection Law did not yet apply because current licences are not affected.

At the beginning of 1998, a “green electricity label” working group was established and Eawag’s research project on green hydropower had just been running for one year. In 1999, a consulting company was hired by EWZ and WWF to develop a business plan for the label. Simultaneously, members of Eawag engaged in several negotiation meet-ings with all relevant stakeholders, thus increasing the acceptance of the process and its results. After another year of mediation and research concerning the criteria for low impact hydropower, the Association for Environmentally Sound Electricity (VUE) was founded.

The VUE organises the certification and audit procedures and awards the eco-label which was named “naturemade”. The board of VUE consists of a broad set of stake-holders, including representatives of environmental NGOs, consumer associations, so-lar, wind and biomass associations, hydropower producers, electric utilities and indus-trial electricity users.

By end of 2004, a total of 53 hydropower plants obtained the naturemade star label, in addition to several wind, solar and biomass power plants. The overall amount of certi-fied power generation with naturemade star quality was 483 GWh.

3.2 The naturemade label concept in brief

The naturemade eco-label encompasses two quality levels of certified electricity (cf. www.naturemade.ch). The level “naturemade basic” mainly indicates that the electric-ity has been produced from renewable energy sources like wind, solar, hydropower and biomass. The top quality level “naturemade star” not only asks for renewable energy


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sources but also requires the fulfillment of ecological criteria which are related to the local environment of the power plants. In the case of hydropower, the greenhydro stan-dard has to be met for the naturemade star label.

Furthermore, certification in practice distinguishes two target groups that may obtain the eco-label: power plants and products. Power plants undergo an initial assessment according to the principles described above. Once they are certified as “star” or “basic” power plants can serve as the sources which a certified green electricity product can be based upon. Such a product, however, has to fulfil further requirements, among which the so-called “promotion model” is the most important. The promotion model is part of a so-called “additionality-mechanism” to support the installation of new power plants and the diffusion of the greenhydro standard: All labelled products have to make sure that 2.5% of the electricity sold to consumers stems from new renewable energy sources (i.e. solar, wind, biomass). For naturemade basic products, another 2.5% have to be generated by hydropower plants which meet the greenhydro standard.3 For naturemade star, all hydropower has to fulfil the greenhydro standard.

3.3 Integration of the greenhydro standard into the naturemade label

As the certification of hydropower as green electricity is a key issue in Switzerland, the greenhydro standard was integrated into the naturemade eco-label. While the concept and the assessment criteria (matrix) could be adopted straightforwardly, further deci-sions had to be taken for some issues which will be referred to as “political decisions” in the following. These issues include the determination of the actual amount of eco-investments and the corresponding payment mode, the question of whether and under which conditions to accept newly constructed hydropower plants, as well as the set up of a simplified assessment procedure for small hydro plants.

With regard to eco-investments, for instance, it was decided that an amount of 0.1 Rp (about 0.067€ct) has to be paid for every kilowatt-hour (kWh) produced in a greenhydro power plant. An additional 0.9 Rp/kWh (0.60€ct/kWh) has to be paid for the electricity sold to end consumers under a naturemade star product. As a matter of fact, a fund for financing eco-investment, will receive a total of 1 Rp (0.67€ct) for every kWh sold as green electricity. In Part II of this document, we will describe how each of these issues has been dealt with in the case of the naturemade label. In general, the stakeholders included in the VUE have negotiated and, finally, agreed upon a common position. The challenges of such a negotiation process will also be addressed in part 3.

3 A product, for example, which is based on a portfolio of 95% “normal” hydropower, 2.5% greenhy-

dro and 2.5% solar, fulfils the requirements of naturemade basic. A naturemade star product, on the other hand, may be based 97.5% greenhydro and 2.5% solar. Note, that under the naturemade star la-bel all generation from hydropower has to fulfil the greenhydro standard.


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3.4 Facts and figures of eco-labelling in Switzerland

3.4.1 Certified power plants

By January 2005, a total of 53 hydropower plants were assessed according to the green-hydro standard and awarded the naturemade star eco-label. Among them were 12 run-of-the-river plants, 3 storage power plants, 33 drinking water plants, and 5 other (e.g. side channel hydropower plants or combinations of types).

As seen in Table 1, run-of-the-river plants constitute the highest share of the installed capacity and the highest amount of licensed generation (about 2% of the total power generation of run-of-the-river plants in Switzerland). This can be regarded as an indica-tion that the “greenhydro” method proved suitable for a substantial number of run-of-the-river plants, including two larger plants of 15 and 25 MW respectively.

Table 1: Overview of hydropower plants certified with naturemade star (End of 2004)

Power plant type Number of power plants Installed capacity (MW) Average generation (GWh/a)

Run-of-the-river 12 60.1 346.8

Storage 3 13.6 41.8

Drinking water 33 11.9 40.7

Other 5 12.1 54.0

Total 53 97.7 483.3

With regard to storage plants the actual uptake of the naturemade star label was less strong; only three of them have been awarded the eco-label so far and the amount of licensed generation is 2‰ of the overall power generation of Swiss storage power plants. Certainly, for typical large storage power plants some criteria required by the greenhydro standard (e.g. criteria concerning connectivity of rivers) are more difficult to fulfil.

The opposite holds true for drinking water plants as it is relatively easy for such plants to meet the local environmental criteria of the matrix. Most of the matrix’ fields do not apply in the case of drinking water plants. Due to the small size of typical drinking wa-ter plants, their share of licensed electricity generation is moderate despite the large number of 33 certified facilities.

The figure shows that the largest number of certified power plants is made up of those with installed capacities smaller than 0.5 MW.


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0

5

10

15

20

25

30

< 0.5 MW 0.5 - 1 MW 1 - 5 MW 5 - 10 MW > 10 MW

Figure 5: Histogram of naturemade star certified power plants, by installed capacity

(2004)

Naturemade star certified hydropower plants can be found in 11 out of the 26 Swiss cantons, with a larger number of power plants in two cantons (Graubünden and Berne), where large plant operators have been active in the field of green hydropower from the outset.

3.4.2 Diffusion of labelled electricity and green power products

From the end of 2000 to 2003, i.e. in the first three years, a strong increase in nature-made star certified generation and products took place, cf. Table 2. The naturemade star licensed products4 make up roughly two thirds of the overall amount of licensed generation (which means that still more green power could have been sold).

Naturemade basic, on the other hand, showed an impressive figure of licensed electric-ity on the product level in 2000 immediately after the label’s launch. However, after a short period, these products turned out to be negligible in terms of effective sales. How-ever, the amount of electricity, which is licensed according to the naturemade basic standard, remained quite high. Naturemade basic certified power plants are often owned by hydropower companies that also operate naturemade star power plants.

Table 2: Licensed electricity generation and products in GWh per year

Licensed electricity 2000 2001 2002 2003 2004

“naturemade star” generation 103 158 238 421 483

“naturemade star” products 12 137 193 298 279

“naturemade basic” generation 3’012 5’403 7’104 7’338 7’360

“naturemade basic” products 568 0 25 26 6

Total 3’695 5’698 7’560 8’083 8’128

4 The licensed electricity on the product level is the amount for which license fees have been paid to the

VUE. So this is the maximum amount of green electricity, which can be sold under the Naturemade eco-label in the respective year. Usually, these figures are lower than the actual sales (174 GWh in 2004).


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Naturemade star certified products are sold mainly by local utilities and - as the Swiss electricity market is not yet liberalised - are therefore only available in some parts of the country (marked in dark red colour in Figure 6). Naturemade star hydropower is sold in equal amounts both as exclusively hydropower products and as a part of green electric-ity products, which contain various forms of electricity generation including wind, so-lar, and biomass.

Figure 6: Areas in Switzerland where naturemade electricity products are offered (2003)

The surcharge for naturemade star products, compared to the normal electricity retail prices of the corresponding utility, ranges between 1.9 and 13.9 Rp/kWh (1-9 €ct/kWh). The large differences arise because in some models certain off-peak discounts are not granted to green power customers. The median surcharge of green power is 6 Rp/kWh (4 €ct/kWh).

This surcharge can be subdivided into the contribution to the eco-investment fund and into other expenses like contributions to new renewable energy production and adminis-trative costs. Two utilities that disclose their cost calculation use around 2 Rp/kWh (1.3 €ct/kWh) for the support of new renewable electricity generation and 1.4-2 Rp/kWh (0.9-1.3 €ct/kWh) for administration, marketing and other expenses.

3.4.3 Eco-investments

Figure 7 shows that in the beginning, contributions to the eco-investment funds came mainly from production (contribution of 0.1 Rp/kWh produced, as described above). This is due to the fact that certified hydropower plants run at installed capacity from the beginning, although only a small fraction of the produced electricity is sold as Green Hydropower. From 2002 on, electricity sales (contributing another 0.9 Rp/kWh) amounted to the majority of the payments.

Withdrawals from the funds for local improvement measures increased strongly in 2003, when enough money was available to undertake the first actions. The cumulated


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amount of all eco-investment payments at the end of 2003 was 1.5 million Swiss Francs.

0

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Figure 7: Cumulative revenues from production and sales (bars) and expenses (line) for eco-investments

Typical amounts for measures vary between 50,000 and 200,000 Swiss Francs, although smaller measures such as ecological studies were also carried out. Sales from the two largest certified power plants amounted to contributions of several hundred thousand Swiss Francs within two years.

Measures5 carried out using eco-investments can be found in the following categories:

• Improvement of connectivity (improvement of fish passes, beaver passes, connec-tion to side streams).

• Installation of protected areas (through land purchase).

• Improvement of flow dynamics (increase of minimum flow, increased variation in the flow).

• River restoration measures (changes in the streambeds, addition of structures, clean-up, addition of native vegetation).

• Monitoring and pre-studies (fish pass monitoring, fish counting devices, studies on the restoration potential).

5 Note that the eco-investments carried out in the local environment of each greenhydro power plant are

beyond legal compliance and also exceed criteria requirements laid out in the matrix (basic require-ments).


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In general, only a small number of the planned measures have been implemented so far because of the short time period since the beginning of the eco-investment payments and the relatively high costs of the measures.

3.4.4 Costs

How much does it cost for a hydropower plant to comply with the greenhydro standard? Although it is frequently posed, this question cannot be answered in a straightforward way as some major cost components are very case specific. In this section the main cost drivers are differentiated and some orientation in this matter is provided.

There are at least five categories of costs which occur during the certification process. First, and usually most important, costs to fulfil the basic requirements. Secondly, costs related to the eco-investments. Thirdly, costs for the preliminary study and the man-agement concept. Furthermore, costs for the audit and also license fees for the eco-label have to be taken into account.

Basic requirements The costs of measures, which are needed to fulfil the basic requirements, can not be predicted on a general basis because they very much depend on the original ecological status of each power plant. Usually, it takes a greenhydro expert visiting the site in or-der to make a rough cost estimation. Under favourable circumstances the costs may be zero or close to zero and in some cases they may be prohibitively high. The Swiss ex-perience has shown that power plants with rather good ecological conditions were among the first to apply.

Eco-investments The costs of eco-investments will depend on the respective regulations of the eco-label. For naturemade star, for example, about 0.67 €ct have to be paid for each kilowatt hour of green power sold to a consumer, cf. section 3.3. The ok-power (Germany) label in-tends to define a level of 0.1 €ct / kWh. One may assume that these two values provide a suitable indication of the specific costs for eco-investments.

Preliminary study and management concept Costs or expenditure of time for these kind of investigations very much depend on the size and complexity of the power plant and on available data. If studies, e.g. on fish migration, are already available the assessment will become cheaper and less time con-suming.

A preliminary study usually includes a site visit and a short report of a few pages by an expert in greenhydro issues. This may take two days and will cost two daily charge r-ates. The management concept is more encompassing and requires a detailed assess-ment of the ecological situation and potential shortcomings. Experiences in Switzerland show that management concepts are mostly in the range of two to fifteen expert days, or daily rates respectively.


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Audit and license fees The main audit has the task to double check the assessment results of the management concept. This also requires trained experts who usually require between half a day and two days of effort.

License fees, again, depend on the specific regulations of the labelling body. In the case of the naturemade label they consist of fixed fees and variable components depending on the size of the power plant6.

3.5 Lessons learned

Some important lessons can be learned from the process of stakeholder involvement, which was actively pursued during the phase of label development. Eco-labelling gen-erally has a potential to lead to a win-win situation for all market actors involved: pro-ducers and suppliers, consumers and environmental organisations. The Swiss experi-ence underlines that it is crucial to address different stakeholders early on and to explic-itly integrate the relevant groups in the standard development process in order to over-come previously conflicting positions. If major interest positions are neglected, there is a danger of either limited acceptance of the label or even a counterproductive develop-ment of competing certification schemes as occurred in the German market (Truffer et al. 2001b).

Obtaining additional supporters focused on already established personal contacts of the actors in the “green electricity label” working group. As a first step they were found in the existing organisational structures: the newly founded Swisspower AG for the elec-tric utilities and the internal discourse at WWF between national and local offices. Here arguments were collected and the concepts were tested before they were presented to the outside world and before they caused open opposition from a specific actor field. The strategic and stepwise selection of partners was a crucial condition for success. Fur-thermore, the voluntary nature of the initiative facilitated the networking process.

The manner in which government departments were included into the process was also of strategic importance. The major ministries concerned with the matter were consulted from the beginning. Thus, an important know-how resource was tapped (stemming for instance from the experiences of recent re-licensing of hydropower plants). The private nature of the network did not put officials in a situation in which they would have to act by legal force. In the best of the cases, the private initiative would support their work. Otherwise, they would not be put into difficult political situations, as the standard did not touch their constitutional function.

A central success factor was also the sensitive dealing with borderline actors, i.e. those institutions which had a potential interest in the initiative but were not yet prepared to join the network. Communication with these actors proved to be decisive for the ulti-mate support of key institutions like the Association of Swiss Electricity Companies

6 300 € as certification fee (each 5 years), 130 € as a fixed licence fee for each plant and 20 € up to 45 €

for each gigawatt hour, depending on the size of the power plant (see www.naturemade.ch).


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(VSE). On the other hand, the behaviour of such actors regularly surprised stakeholders, with the former turning their backs and beginning to move away from the core project or criticising it openly. It was the management of such weak ties which ultimately gave the initiative its momentum in the decisive moments of the network formation.

In the Swiss case of Green Power, not only the procedural design of label development and the initial constellation of actors involved were essential for a cooperative solution, but also the emerging market environment: The exogenous change of market conditions (e. g. the onset of market deregulation) created a strong incentive to overcome some old entrenched conflict lines.

Nevertheless, a consensus-oriented labelling strategy with broad stakeholder involve-ment, as was pursued in Switzerland, required a resource-intensive discussion process. Especially the preliminary and the final design phase required a substantial amount of time and money. In the Swiss case, it took two years from initial discussions to the ac-tual launch of the labelling scheme.

Finally, one should be aware that the evaluation criteria as well as the certification pro-cedure have become quite complex, which may constitute a challenge with regard to the public perception and understanding of the label.


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Part II: General guidelines for the assessment and certification of hy-dropower plants

The experiences in Switzerland have clearly demonstrated the organisational and finan-cial practicability of integrating the greenhydro standard into an eco-label for electric-ity. In the following, we will review the key issues and value judgements that have to be made when applying the greenhydro standard to other countries. For each of these key issues, we describe basic solution alternatives which are followed by a recommendation based on the experiences in Switzerland.

Before we turn to these key issues in chapter 5, we shortly reflect the general feasibility of a transfer of the greenhydro standard to other countries in terms of ecological and legal framework conditions.

4 General aspects concerning a transfer of the greenhydro standard to other countries

As the environmental management matrix for the greenhydro standard contains scien-tifically objective criteria and follows a rather generic approach, a transfer to other types of rivers and power stations should be generally unproblematic. However, particu-larities of certain types of hydropower plants and of legal frame-conditions have to be considered in the transfer and adaptation process. Furthermore, depending on the legal requirements, the current ecological situation of hydropower plants may vary from country to country, thus resulting in different costs to fulfil the basic requirements.

In Switzerland the basic requirements have been applied repeatedly to all types of power stations and a broad capacity range. To date, no examples are known which are not adequately covered by the environmental management matrix. Therefore, as long as rivers of other countries do not differ fundamentally from the character of Swiss Alpine and lowland rivers we expect only minor adjustments to the criteria being necessary7. However, if the greenhydro standard is to be applied to other countries, it may be help-ful to characterise these countries’ prerequisites concerning different types of rivers and power stations in an overview study (cf. Part III). If differences become evident, power station types are to be identified for which adaptation is required and a process is to be defined by which possible deficits could be met using scientifically objective criteria. In such cases Eawag is available for advising on necessary adjustments. For controversial cases Eawag is similarly prepared to offer support and advice until a national technical committee can be formed.

The ecological basis of the greenhydro standard should take into account the general level and the particularities of national legislation on environmental and aquatic protec-

7 It is rather likely that the differences between aquatic systems are not that big. We rather expect new

“techno-natural constellations”, e.g. hydro turbines in natural lakes that directly released their outflow to the sea in the form of a water fall – water that is now caught and lead through an underground channel to a turbine and directly into the sea.


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tion and should not contradict, but rather, sensibly complement national legislation. Clarification of the legal situation further facilitates practical support of the standard, as technical agencies and consultancies can be referred to current practice with regard to the professional standards established in the fields of environmental impact assessment and renewal of licenses (cf. Part III).

For these reasons a transfer of the greenhydro standard should include an examination of the most important national and regional legislation relevant to the use of hydro-power. Before transferring the standard, potential legal obstacles should be identified which might complicate greenhydro certification (e.g. if concessions prevent further alterations to the river, even if these may result in an improvement of its ecological state). Moreover, the European Water Framework Directive (WFD) and its application on a national level has to be taken into account.

5 Key issues for implementing the greenhydro standard

Next to the objective scientific criteria of the basic requirements the greenhydro stan-dard is additionally dependent on decisions to be taken at a political level, see also sec-tion 3.3. Ideally, this process should be carried out by a network in which the most im-portant interest groups are represented in order to create broad support and to avoid criticism later on.

The issues and questions requiring political determination can be described as follows:

• Which legal standard or which specific power stations can serve as a reference for illustrating the ecological level of the basic requirements in a national context? (see chapter 5.1)

• How should eco-investments be generated? (see chapter 5.2)

• What should be the assessment procedure for newly constructed power plants? (see chapter 5.3)

• How can the certification process of small power stations be simplified without jeopardising the ecological standard? (see chapter 5.4)

5.1 Reference to good practice for fulfilling the basic requirements

In the greenhydro standard, the basic requirements are spelled out in a general way. As every river and power station is different, the criteria in the matrix have to be inter-preted on site. In this regard some discretion exists. Therefore, some examples of good practice and / or a reference to an existing (e.g. legal) standard is needed in order to provide orientation for hydropower producers, environmental NGOs, auditors and oth-ers.


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Potential solutions

In Switzerland, the ecological standard of newly licensed power plants (in compliance with the Water Protection Law) was chosen as such a reference point. For most power plants this signifies a clear ecological improvement to the current licensing basis. This does not imply that every power station with a new legal license automatically fulfils the basic requirements of the greenhydro standard. In fact, there may be several aspects (e.g. hydropeaking) in which further measures are necessary prior to certification. How-ever, it can be assumed that newly licensed plants are generally not far from meeting the basic requirements, i.e. that the additional efforts (and the corresponding costs) are somehow limited.

As an alternative or complement, it is possible to define some specific power plants that fulfil the basic requirements and, therefore, can serve as examples of good practice in their class8. Such reference to actual hydropower stations, however, may be rather illus-trative in nature as a generalisation is always difficult due to the particularities of each plant.

5.2 Determination and use of eco-investments

Eco-investments serve two purposes. First, they assure a specific ecological quality of the power plant which exceeds the basic requirements and is adapted to the particulari-ties of the local situation. In this respect, they also shift any discretion in the interpreta-tion of the basic criteria towards high ecological performance.9 Secondly, they are also a strong marketing tool with regard to green power customers. Obviously, each kWh hour sold as green hydropower leads to a further improvement of the ecological situa-tion at hand. Thus, consumer choice for green power makes a difference.

However, it has to be determined how high the surcharge for eco-investments should be and how they should be generated, i.e. in relation to overall power generation, to green power sales etc. Furthermore, rules of how and where to spend the money have to be set up.

Potential solutions

In Switzerland, there was much discussion at the beginning about the adequate level of the surcharge for eco-investments. Finally, stakeholders agreed to support the following solution. For each kWh produced in the particular power plant 0.1 Rp (0.067 €ct) has to to be paid into a fund, out of which eco-investments, i.e. further improvement measures are paid. This regulation assures that a minimum contribution will be made for each greenhydro power plant regardless of the success of the corresponding product in the market. Furthermore, an amount of 0.9 Rp (0.60 €ct) has to be paid for every kWh sold

8 By class we refer to some basic parameters such as size, general type of power plant, river etc. 9 With regard to this uncertainty in the interpretation of basic criteria (part of) the eco-investments can

be interpreted as a key element to assure the general eligibility of the hydropower station. With regard to the second function, however, eco-investments also incorporate an “additionality element”.


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as green electricity. This mechanism reduces the risk for the electricity producer or mar-keter respectively and, at the same time, makes sure that consumer choice makes a dif-ference, i.e. that green power sales lead to an increasing contribution into the funds for eco-investments.

Moreover, it has been agreed that each power station has to manage an individual fund for financing eco-investments. A local round table including stakeholders from different organisations (representatives of the power station, environmentalists, fishermen, ad-ministration officials etc.) has to decide what to spend the fund resources on. These de-cisions are oriented at the proposals for improvement measures identified in the man-agement concept, cf. chapter 2.3. As a general rule, eco-investments have to be linked to the hydropower station, where they were generated, i.e. they cannot be spend on pro-jects in other regions or on other renewable energy sources.

With regard to the Eugene standard, the decision was taken by the Eugene board to de-termine 0.1 €ct/kWh as a minimum payment for eco-investments, which will be used for restoring, protecting or upgrading the environment in the catchment area used by the plant in question. It has not been made explicit, however, whether this sum applies to the overall production of a hydropower plant or to its actual green power sales.

5.3 Regulations for new or expanded hydropower plants

In some countries new hydropower installations are met with significant concern for the environment, while other countries place a particular focus on substituting power sta-tions running on fossil fuels. An assessment procedure for green hydropower therefore has to deal with the question whether power stations, which have been built recently, are yet under construction or will be planned in the future should be generally eligible for certification or not.

Potential solutions

In Switzerland, the technical potential for the exploitation of hydropower has been used to a large extent and all major river streams are deeply affected. Therefore, the political opposition against the construction of new power plants is rather high. The naturemade eco-label has therefore formulated a high threshold that applies for new or expanded power stations. It says that these can only be certified if they do not pose any additional ecological impact on natural habitats, species or landscapes. Exceptions from this rule are only possible if a complete substitution of the lost of habitats and the like can be assured. How this substitution will look like has to be determined on a case to case basis with the support of experts in the respective fields. So far, no such case has occurred.

In Sweden, power plants that have been built after 1995 are generally excluded from certification.

According to the Eugene guidelines new or expanded power plants can only be labelled as green if the hydropower facility leads to a substantial improvement of the local and regional ecological quality (in excess of legal compliance).


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5.4 Regulations for small hydropower plants and special types

Small hydropower plants usually outnumber large stations although they contribute only a small fraction of overall hydropower generation. In Switzerland, for example, there are about 1’000 hydropower stations with less than 10 MW of installed capacity.10 These facilities produce about 10% of the total electricity generation from hydropower (Vollenweider 1999).

There is no direct connection between the size of a power plant and the ecological qual-ity of the power production. Whatever the size of device is, a power plant should be eligible for certification if it achieves a good ecological standard.

In the case of small power plants there is a risk that encompassing ecological assess-ments and / or eco-investments can hardly be financed out of the revenues. In order to not exclude small facilities due to prohibitive costs, simplified procedures for small power plants are needed (cf. Vollenweider 1999; Truffer & Seiler 2001).

Potential solutions

In Switzerland, there are several instruments and administrative simplifications for small hydropower plants to make sure that the certification procedure does not exclude small hydropower plants:

• The mandatory membership for the VUE is free if the annual production is less than 5 GWh.

• Hydropower plants with a capacity of less than 100 kW do not have to make eco investments because the cost of setting up a fund and organizing a round table rather exceed the income generated by the payments.

• There is a special support for the certification procedure for the operators of small hydro power plants, e.g. in the form of particular fact and information sheets.

• There is a possibility to certify a group of small devices in order to reduce the costs for the management concept and the auditing process.

• For small hydropower plants, which use the energy in drinking water and sewage pipelines, the assessment of environmental impacts and the application of the green-hydro standard is neither reasonable nor necessary. So a special more or less admin-istrative assessment is implemented.

The concept of basic requirements together with the requirement to set up a manage-ment concept, however, also apply to small hydropower plants.11 The fact that the many of the certified power plants in Switzerland are smaller than 1 MW (cf. Figure 5) shows that the specific regulations for small hydropower stations work in practice.

10 That equals 85% of the overall number of hydropower plants. 11 From an ecological point of view it cannot be argued that, for example, a simplified set of criteria is

sufficient for small hydro.


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6 Blueprint for general guidelines

6.1 General assessment principles

Hydropower plants can be certified as green hydropower facilities if the design of the power plant and its operation are environmentally sound. This means that the ecological key functions of the aquatic system are preserved and targeted mitigation measures are undertaken, which are tailored to the specific circumstances of the power plant and the affected ecosystems.

To make these principles operational, the hydropower plant has to meet the following three basic conditions. Other conditions or criteria, such as size or age of the power plant, which do not provide an ecologically sound basis for assessments shall not be approved.

Condition 1: Basic requirements

The hydropower plant has to fulfil general basic requirements for green electricity. The basic requirements are based on a set of local criteria, which apply for all hydropower plants. The intention of such basic requirements is to allow for a supra-regional compa-rable certification of different power plants, regardless of their age, size or how they are built or operated.

Condition 2: Eco-investments

The hydropower plant has to invest a fixed payment per kilowatt-hour produced, or sold respectively. These so-called eco-investments will be used to restore, protect or upgrade the environment in the catchment area of the plant at hand. Eco-investments allow for ecological improvements, which are adapted to the individual situation of the power plant, thus taking the particularities of each power plant into account.

The improvements financed by eco-investments are intentionally designed to go beyond the level established by the basic requirements, cf. Figure 1. Unlike the basic require-ments, this does not call for certified power plants to be comparable with each other.

Condition 3: Reliable assessment procedure

The audit and certification process has to be organised in a way to insure compliance with the criteria. The process has to be clearly defined, transparent and should not dis-criminate any hydropower plant or operator. The labelling body has to make sure, that auditors are competent to carry out the necessary investigations and assessments (e.g. by an auditor accreditation process). The labelling body also has to assure that compli-ance is checked on a regular basis.


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6.2 Basic requirements

Basis requirements have to be organised in a way that is in line with the Eawag green-hydro standard in general (Bratrich & Truffer 2001) and the matrix in particular (Figure 3). However, deviations due to national particularities (cf. chapter 4) are to be accepted.

6.3 Eco-investments

The minimum level for payments into a fund for financing eco-investments should be in line with the Eugene standard.

There are basically two modes of how to generate payments. Firstly, a certified power plant can make a basic contribution per year for each megawatt hour of electricity pro-duced (basis payments). This option has the advantage that a minimum degree of con-tinuous improvements is assured, which does not depend on the actual green power sales and, therefore, resembles best the fulfilment of eligibility requirements together with the basic criteria.

Secondly, financial contributions can be made on a yearly basis for each megawatt hour that has been sold as green electricity (sales dependent payments). This option has the advantage that it does not entail any risk for the producer.

According to the experiences made in Switzerland we recommend a combination of the two modes. Still, the final decision should be left to the national labelling bodies.

Cap of basic payments

Basic payments represent an entry barrier for the certification of hydropower plants as they have to be paid regardless of green power sales. This barrier will be particularly significant if there is a large gap between actual production and green power sales fig-ures. Such a gap is likely to occur when a producer has just started green power market-ing and sales figures are still low. A similar situation may occur for large hydropower plants with a generation capacity that exceeds green power sales by far.

National labelling bodies, therefore, may decide to define a cap of basic payments.

Use of eco-investments and selection of mitigation measures

Eco-investments should primarily be used to finance targeted mitigation measures within the affected ecosystems of the certified power plant. Eco-investments can be made in all management fields to fund mitigation measures in any environmental field. They may also be used to remedy environmental shortfalls that have not been caused primarily by the power plant.

Mitigation measures should be agreed upon in consultation with representatives of rele-vant local and regional stakeholders (roundtable).


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6.4 Regulation for new or expanded power plants

New hydropower plants are defined as power plants which have become operational after January 1st, 2001 and for which i) a new dam or barrier was built or ii) an existing dam or barrier was changed significantly. Such facilities can only be certified as green hydropower plants if their overall ecological effect is positive compared to the former ecological situation of the river. If natural habitats are affected in a negative way com-pensation measures are required. Any assessments in relation to new power plants should basically follow the matrix (Figure 3).

Expansions or re-activations of power plants that do not include new or significantly changed dams should be treated as existing hydropower plants.

6.5 Simplified regulations for small plants and special types of hydro-power plants

Small hydropower plants

Small hydropower plants are considered to be power plants with an installed (overall) capacity of not more than 1 MW. National labelling bodies are encouraged to develop measures, which make the certification of small hydropower plants easier in terms of costs. Such procedural simplifications, however, have to ensure that the investigated plant complies with the basic requirements of the environmental management matrix.

There are four main categories of potential simplifications:

- Simplified handling and / or reduction of eco-investments - Reduced licensing fees - Simplified audit procedure and / or assistance from the labelling organisation - Group certifications for a series of small stations in the same river stretch

Special types of hydropower plants

For some hydropower plants, like for instance in the case of exploiting the energy in drinking water pipelines, the assessment of environmental impacts and the application of the greenhydro standard is neither reasonable nor necessary. National labelling bod-ies may define types of hydropower plants, which are eligible without any further eco-logical requirements or simplified ones.


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Part III: Roadmap for implementing the greenhydro standard in other countries

So far, Eawag’s greenhydro standard for the assessment of hydropower has been ap-plied in Switzerland under the naturemade star eco-label (Bratrich & Truffer 2001; Moosmann & Markard 2005). Although its principles, criteria and methods are gener-ally applicable, the greenhydro standard refers to the Swiss legal framework for the operation of hydropower and the protection of aquatic systems. It also refers, mostly implicitly, to stakeholder participation and negotiation processes taken place in Switzer-land in the preliminary stages of the implementation.

Thus, a series of investigations and some adjustments will be necessary to apply the greenhydro standard in other countries. The aim of this part of the report is to highlight the steps and investigations required in order to apply the greenhydro standard to a de-fined national context. In particular, the document discusses specific questions and ad-justments to be addressed if the greenhydro standard is to be implemented as a uniform, national standard without neglecting the individualistic character of different hydro-power stations. This roadmap (cf. Figure 8) is intended to work as a general tool for any country. In a particular situation, however, additional steps may become necessary.

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Figure 8: Roadmap for implementing the greenhydro standard in other countries.


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The main part of the roadmap is a feasibility study to be conducted as a pre-condition for the transfer of the greenhydro standard. Such a feasibility study is under way for Austria in the context of a diploma thesis at the University of Natural Resources and Applied Life Sciences (BOKU) Vienna. Another one will be carried out for Germany, sponsored by the Deutsche Bundesstiftung Umwelt (DBU) and the Energie Baden-Württemberg (EnBW AG).

7 Setting up a support network and promotion of the transfer

The greenhydro standard has to be embedded into a national eco-label, which certifies green electricity products. On the basis of the eco-label, several value-laden decisions have to be made (cf. Part II) . Experiences from Switzerland have shown that it may be a crucial success condition that the most important interest groups are represented in a network that supports the decisions and the eco-label respectively.

Furthermore, funding and coordination will be needed for carrying out the feasibility study and the other steps of the roadmap. Thus, at the beginning of the processes, at least one organisation (e.g. an environmental NGO) has to act as the promoter of the greenhydro transfer. Such a promoter does not need to carry out the feasibility study on his own. This task may also be commissioned to a consultancy or research institute. The promoter(s) also may not necessarily be involved in eco-labelling in the end - although this is rather likely.

8 Feasibility Study

The feasibility study provides a building block for the transfer of the greenhydro stan-dard and for further decisions as well as negotiations among interest groups. The extent of such a study may depend on national particularities and whether much of the knowl-edge is readily available. We estimate that the cost of such a study will be about 25-40 k€ and that it will take about 6-9 months to carry it out (mostly time consuming will be the pilot investigations of hydropower plants).

8.1 Ecological and technical framework conditions

As the environmental management matrix for the greenhydro standard contains scien-tifically objective criteria, a transfer to other types of rivers and power stations is gener-ally unproblematic. To date no examples are known which are not adequately covered by greenhydro standard. Therefore, as long as rivers of other countries are by and large comparable to the character of Swiss mountain and lowland no far-reaching adjustments to the criteria will be required. However, certain adjustments may be necessary in the case of large run-of-the-river plants (> 100 MW), as this type of plant has presently not been certified in Switzerland and therefore no adequate experience is available. Similar adjustments may be needed for hydropower plants that are situated close to the sea.


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So, as a first step the feasibility study should check whether the typical conditions for hydropower use in the target country are more or less comparable with the situation in Switzerland or not. The study should indicate the target countries’ prerequisites con-cerning different types of rivers and power stations. Furthermore, the study should pro-vide a rough overview of the size of potential candidates for a greenhydro assessment.

If the characteristics of river types and power station types do not differ greatly from the previously certified Swiss plants and river types no further investigations are required and the criteria of the environmental management matrix can be applied directly. If dif-ferences become evident, power station types are to be identified for which adaptation is required and a process is to be defined by which possible deficits could be met using scientifically objective criteria.

8.2 Analysis of the legal context

The requirements of the greenhydro standard are defined by scientific criteria. As each river and each power station differ individually, certain criteria can only be defined on site and some scope of discretion exists. In Switzerland, the requirements of the re-newed water protection law served as some kind of benchmark, i.e. the ecological situa-tion of a power plant that meets the greenhydro standard should be comparable with a recently licensed facility in compliance with the water protection law.

With regard to the transfer, the ecological basis of the greenhydro standard should be assessed against the background of national legislation on environmental and aquatic protection in the target country. The greenhydro standard should not contradict, but sensibly complement national legislation. Clarification of the legal situation addition-ally facilitates practical support of the standard, as technical agencies and consultancies can be referred to current practice with regard to the professional standards established in the fields of environmental impact assessment and renewal of licenses.

A necessary pre-condition within the feasibility study, therefore, is an examination of the most important national and regional legislation relevant to the use of hydropower. This requires an analysis of the most important legal documents on the protection of water, nature, environment and energy supply and the status of the implementation of the WFD. Before transferring the standard, potential legal obstacles should be identified which might complicate greenhydro certification (e.g. if concessions prevent further alterations to the river, even if these may result in an improvement of its ecological state).

8.3 Analysis of interest positions

Besides the objective scientific criteria of the environmental management matrix the greenhydro standard is additionally dependent on decisions to be taken at a political level. Ideally this process should be carried out by a support network in which the most important interest groups are represented (see above). This not only increases the stan-


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dard’s credibility, but also creates the environment for dealing with special controver-sial cases.

As a third step, therefore, an overview of the most relevant stakeholders and their inter-est positions related to the environmental impacts of hydropower should be prepared. Common positions as well as major conflict lines have to be made transparent in order to make a first estimation about potential support as well as opposition with regard to a national greenhydro standard.

8.4 Pilot assessments of hydropower plants

For testing the feasibility of a concept transfer, the greenhydro criteria should be exem-plified in the respective countries using selected pilot plants. This step represents a key part of the feasibility study. The selection should include different types and sizes of hydropower plants (reservoirs, run-of-the-river plants and small facilities). The pilot assessments may be fairly rapid if the countries and power stations hold good basic data describing both the technical situation of the plants and the ecological state of the rivers. If no such data are available, the time effort will be accordingly higher.

In both cases the necessary investigative steps should be conducted by experts or insti-tutions with several years of experience in the area of hydropower and aquatic ecology. Institutions with access to comprehensive data archives of several power stations are particularly ideal candidates (universities, private consultancies who have been in the business for a long time, etc.).

In a similar way, pilot assessments will benefit from a careful selection of power plant owners or operators respectively. Pioneers with a strong interest to be among the first to obtain an eco-label for environmentally sound power are likely to show a high degree of cooperation and support. Potential candidates (firms and power plants) may already be identified earlier as a part of step 3 (cf. chapter 8.3) of the feasibility study.

8.5 Public debate and stakeholder involvement

As said before, broad stakeholder support will be a crucial success condition for the actual uptake of greenhydro certification by plant operators and the demand for green electricity from hydropower by private and commercial customers. We therefore rec-ommend a two-step follow up process.

First, the (adjusted) greenhydro standard should be presented to and discussed in a wider audience (e.g. in a public workshop). The audience may include hydropower pro-ducers, green power marketers, environmental consultants, NGOs and government offi-cials. This public debate has the target to raise interest (mostly among experts in that field) in the whole process and to increase its transparency. A further necessary step is to respond to potential criticism and integrate suggested amendments.

Second, the promoters may want to involve some stakeholders more directly (e.g. as part of the organisation that owns and operates the national eco-label) in order to assure


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support for the greenhydro standard. Potential candidates may be identified on the basis of existing contacts and the analyses carried out under 2.3.

8.6 Synthesis

Finally, the results obtained in the above mentioned steps have to be synthesised. The aim is to obtain an encompassing draft of how to adapt and actually implement the greenhydro standard in the respective country.

9 Implementation of the national greenhydro standard

The implementation requires activities on three levels. First, and most importantly, some “political” decisions have to be made. Secondly, a licence contract has to be for-mulated, in which the use of the (adjusted) greenhydro concept is regulated. Thirdly, a consulting work group should be established, which accompanies the greenhydro appli-cation in practice.

9.1 Resolution of political issues

When it comes to implementing the greenhydro standard, a series of value-laden deci-sions have to be made. These include answers to the following questions:

a) Which legal standard or which specific power station(s) can serve as reference for illustrating the ecological level of the basic requirements in a national context?

b) How should the use of the contributions for eco-investments be managed? And how high should the surcharge be?

c) How to deal with newly constructed power plants? Under which circumstances will they be eligible for certification? Can extensions to existing power stations be certi-fied and if so, will the entire plant be affected or only the extension?

d) How can the certification process of small power stations be simplified without jeopardising the ecological standard?

Although many of these questions seem to be quite fundamental, propositions on how to deal with as well as experiences are readily available. In fact, the Eugene Standard and the guidelines in Part II of this report will not leave much room for manoeuvre on a na-tional basis.

9.2 Capacity building with regard to the certification procedure

In order to successfully establish the greenhydro standard in other countries, a network of consultancies is needed besides ecological and political criteria, which can guarantee a transparent and credible auditing process. Such a network must have

a) several years of technical and professional expertise in water management,


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b) technical hydropower expertise and

c) the necessary know-how in quality assurance.

Evaluating the ecological basic requirements calls for knowledge of aquatic ecology and reliability in practical data acquirement within this field. To achieve objective and comparable results the technical auditing of the power stations (technical audit12) should only be carried out by experienced parties. For a transfer of the greenhydro standard it is therefore important to initially clarify how the country’s experts - who may be con-sidered for technical auditing - are organised and which minimal conditions are to be placed on their professional expertise (cf. section 6.1). In this context, national labelling bodies may consider to establish a regular exchange of knowledge and experience at the international level in order to assure a good and comparable practice of applying the greenhydro standard.

Energy accounts and finances of the individual power stations should be examined by accredited auditors with sufficient experience in this particular field (lead audit13). In this case, internationally active businesses can generally be relied on (e.g. Société Gé-nérale de Surveillance, Technischer Überwachungsverein etc.).

9.3 Contractual issues

In Switzerland, the application of greenhydro standard within the naturemade star eco-label has been regulated by a contract concluded between Eawag as the developer of the standard and the VUE as the organisation carrying out the respective certifications of power plants and electricity products. This contract (amongst others) spells out rights and responsibilities for Eawag and the VUE and assigns the roles to play for both par-ties in the application of the standard. The contract furthermore regulates how the stan-dard will be developed further and it also includes a paragraph on the financial reim-bursements VUE has to pay for the use of the standard. Finally, Eawag and VUE ex-pressed their intention to also cooperate in other countries.

Whether and in what form similar contracts will have to be concluded in other countries should be decided on a case by case basis. Eawag’s and the VUE’s main concern in this respect is to guarantee that the registered greenhydro brand assures a high quality level of application in practice. However, the assessment procedure itself, its underlying prin-ciples and methods are publicly available and considered as a common good. National labelling bodies are therefore free to develop minimum standards for hydropower which are oriented at the greenhydro approach but still different.

12 The so called “technical audit” is the audit to ensure that the greenhydro standard is applied by the

certified hydropower plant. In Switzerland the technical audit is organised by accredited ecologists. 13 The so called “lead audit” is the audit to ensure that the certified power plant fulfils all the other crite-

ria regulated by the labelling organisation like the regulations for the accounting of generation and selling. In Switzerland the “lead audit” is organised by accredited professional audit organisation.


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9.4 Establishment of environmental expert working group

To ensure a high quality and continuous improvement of the audits a regular exchange of experiences amongst technical auditors is sensible. In Switzerland the VUE organises a workshop for exchanging experiences amongst technical auditors twice a year. Its purpose is for further education and for discussing controversial cases.

In a similar vein, a group of environmental experts (e.g. consultants) and representatives of the labelling body should be established in the target country to discuss and solve general problems that occur in the practice of greenhydro certification.

Furthermore, an exchange of experts may be organised at an international level.


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10 Bibliography

Bratrich, C., Truffer, B., 2001. Green Electricity Certification for Hydropower Plants - Concept,

Procedure, Criteria. Swiss Federal Institute for Environmental Science and Technology (EAWAG), Kastanienbaum.

Bratrich, C., Truffer, B., Jorde, K., Markard, J., Meier, W., Peter, A., Schneider, M., Wehrli, B., 2004. Green Hydropower: a new assessment procedure for river management. River Re-search and Applications. 20 (7), 865-882.

Farhar, B.C., 1999. Willingness to Pay for Electricity from Renewable Resources: A Review of Utility Market Research. National Renewable Energy Laboratory, Golden, CO.

Hart, D.D., JOHNSON, T.E., BUSHAW-NEWTON, K.L., HORWITZ, R.J., BEDNAREK, A.T., CHARLES, D.F., KREEGER, D.A., VELINSKY, D.J., 2002. Dam Removal: Chal-lenges and Opportunities for Ecological Research and River Restoration. Bioscience 52 (8), 669-682.

Holt, E., 1997. Green Pricing Resource Guide. The Regulatory Assistance Project, Gardiner, Maine.

Markard, J., Rothenberger, D., 2000. Transparenz und Glaubwürdigkeit: Zentrale Erfolgsfakto-ren bei der Vermarktung von Ökostrom. In: J. Markard and B. Truffer (Ed.), Umweltma-nagement und Ökolabeling für die Wasserkraft. Band 4, Eidgenössische Anstalt für Was-serversorgung, Abwasserreinigung und Gewässerschutz (EAWAG), Kastanienbaum, pp. 15-22.

Markard, J., Truffer, B., Bratrich, C., 2001. Green Marketing for Hydropower. Market dynamics and Eco-Labeling initiatives. Hydropower & Dams 8 (1), 81-86.

Truffer, B., Bloesch, J., Bratrich, C., Gonser, T., Hoehn, E., Markard, J., Peter, A., Wehrli, B., Wüest, A., 2002. Ökostrom aus Wasserkraft - ein transdisziplinäres Forschungsprojekt. Schlussbericht (1997 - 2001). EAWAG, Kastanienbaum.

Truffer, B., Makrard, J., Bratrich, C., Wehrli, B., 2001. Green electricity from alpine hydro-power plants. Mountain Research and Development 21, 19-24.

Truffer, B., Seiler, B., 2001. Umweltzertifzierung Kleinwasserkraftwerke. BFE (Hrsg.), Bern.

Vollenweider, S., 1999. Ökologische Bewertung und Zertifizierung von kleinen Wasserkraftan-lagen. EAWAG, Kastanienbaum.

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