Efficient and robust hydropower system design under uncertainty - a demonstration in Nepal

Interventions to increase benefits from energy-food-water-environment systems can involve changing infrastructure configurations and/or operational rules. In a context of complexity due to interdependencies and uncertainty, resource system intervention appraisal should consider multiple facets of system performance and a variety of plausible future conditions to achieve robust systems that balance multiple stakeholder definitions of acceptable performance. This paper proposes a novel multi-method decision-making under deep uncertainty approach to hydropower system design. The most efficient and robust designs are identified; those that maximize benefits and balance stakeholder interests despite uncertainty. It is applicable in any context where efficient and robust future hydropower systems are desirable. The proposed approach is demonstrated in Nepal, showing the robustness benefits of diversified infrastructure systems; here the mixed development of both storage and run-of-river dams. Stress testing of a selected efficient and robust hydropower investment bundle reveals that institutional or financial uncertainties can most threaten the viability of assets, even when significant climate change is anticipated.