Considering the significant risk of negative impacts on biodiversity, human rights, and climate, Reclaim Finance recommends conditioning the financing of new hydropower projects (greenfields and brownfields) to the strict application of robust standards.

Although some forms of hydropower may have a role to play in a rapid and just energy transition, its vulnerability to climate events like droughts and extreme rainfall – both growing in frequency and intensity with global warming – mean that it cannot be relied upon to a large degree. PSH is likely to remain an important storage source and grid stability factor, yet priority should be given to energy sources and technologies with fewer impacts and that are less exposed to climate change risks, such as wind and solar, and batteries for short-term storage.

To reduce the need for new hydropower plants, priority in this sector should be given to the maintenance and rehabilitation of existing hydropower infrastructure and, where relevant, additions or increases of generating capacity at existing dams. In particular, no new hydropower should be developed in Europe, as most of hydropower potential has already been harnessed, with significant negative impacts on ecosystems and biodiversity and increasing hydropower capacity should exclusively rely on refitting and upgrading existing hydropower plants.

New hydropower projects must be examined on a case-by-case basis, should apply the recommendations and principles of the World Commission on Dams,24 and should respect the consent of local populations with the FPIC principle25 for Indigenous Peoples. For both new and existing hydropower plants, a project must not compromise any efforts to restore riverine and riparian ecosystems.