Chapter 5 focuses on hydropower development and outlines why SEA is crucial for planning hydropower projects at a watershed or basin level. It emphasizes the need to manage cumulative environmental and socio-economic impacts, engage stakeholders, and inform better decision-making across the hydropower lifecycle.
This chapter provides insights into hydropower’s environmental and social impacts and offers strategies to mitigate risks and optimize outcomes, especially through integrated water resource management and coordinated river basin planning. It also includes global examples of SEA applications in the hydropower sector, highlighting the importance of this tool in supporting sustainable energy transitions.
5.1 How SEA Can Benefit the Hydropower Sector
5.2 Existing SEA Guidance/Guidelines for the Hydropower Sub-Sector
5.3 Hydropower Installed Capacity
5.4 Background to Hydropower Generation
5.5 Environmental and Socio-Economic Issues Associated with Hydropower Development
Hydropower is an important source of renewable energy, but building hydropower projects can cause environmental and social problems. Common environmental issues include loss of habitats and biodiversity, water pollution, downstream impacts, and greenhouse gas emissions from reservoirs. On the social side, building dams and other infrastructure can force people to move, take away their livelihoods, and cause conflicts over land and water.
Explore the four distinct types of hydropower installations in the flip boxes below.
Strategic Environmental Assessment (SEA) helps make sure that policies, plans, and programs (PPPS) for the hydropower sector are framed in a way that, when implemented (mainly through individual projects), they balance energy production with protecting the environment and people’s well-being. Instead of just looking at individual projects, SEA looks at the big picture, focusing on entire watersheds or regions to better manage environmental and social risks.
SEA helps identify problems early, like how multiple hydropower projects in the same area might affect the environment and communities.
One of the main benefits of SEA is its ability to pinpoint the best places for hydropower projects. It can show which areas are too risky to develop and suggest better locations where the impact on nature and people will be less harmful. This planning ensures that we get the energy we need while minimizing negative effects.
SEA also helps bring people into the conversation. It encourages early involvement from local communities, including marginalized groups and Indigenous peoples, to avoid conflicts and make sure the benefits of hydropower are shared more fairly. Listening to different perspectives early on when preparing PPPs makes it easier for subsequent projects to succeed.
SEA improves the overall management of hydropower projects by streamlining environmental and social impact assessments (ESIAs), saving time and money. It also encourages countries to work together on shared rivers, especially in regions where water flows across borders.
In short, SEA helps ensure that hydropower PPPs (and subsequent projects) support the shift to cleaner energy in a way that is good for both the environment and people. By using SEA, decision-makers can plan better, reduce risks, and create more sustainable outcomes for everyone.
Nam Theun 2 is a widely referenced example of how upstream assessment can shape hydropower development in ways consistent with SEA principles. Before moving forward, planners carried out broad, system-level studies to understand downstream flow needs, reservoir water quality, vegetation clearing options, and the vulnerabilities of nearby communities.
This early work helped identify risks, assess trade-offs, and guide decisions on maintaining seasonal environmental flows, choosing a selective approach to biomass removal, and investing in essential local infrastructure and services. The project illustrates how looking at the entire watershed—not just the project site—can improve outcomes for ecosystems and people.
Although not without challenges, Nam Theun 2 demonstrates how early strategic analysis can help balance energy generation with environmental protection and community well-being—exactly the type of sector-wide improvement that SEA aims to support.
Learn more about Nam Theun 2 (and other hydropower SEAs in action) by downloading the full chapter at the top of this page.