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Given intense competition for limited water supplies and the predominant role of hydropower in river basins, conflicts increasingly arise between hydropower and consumptive uses down between the late 1990s and the early 2000s as increased private participation resulted in a preference for less capital intensive technologies (thermal power), and also because of heightened public opposition to the environmental and social impacts of large dams. Since then, in response to rising energy prices, escalating demand and growing concerns about climate change, hydropower development has accelerated again, predominantly in Brazil, which concentrates more than 60% of the new capacity installed in the past decade, followed at a distance by Chile, Paraguay and Mexico (OLADE, 2013). Hydropower projects play a central role in the expansion plans of many countries (IEA, 2012b), and are expected to be a major driver of new water demands in the future. At present, the emphasis is not only on large plants, capable of multi-year regulation, but also increasingly on smaller single-purpose reservoirs (the average reservoir capacity of the dams built in the 2000s is only about one-fifth of those commissioned in the 1980s and 1990s [ICOLD, 2013]), run-of-the-river plants, and modification of existing dams to increase their generation capacity. Another concern relates to the vulnerability of hydropower to climate variability. In Brazil, climate change is expected to decrease the overall reliability of hydropower, with negative effects concentrated in the North East and North regions, in terms of both average and firm energy, and positive variations in the South and South East river basins (Margulis and Dubeux, 2011). Hydroelectric power is usually viewed as a non- consumptive water use, even though it is in part consumptive (reservoir evaporation) and has important impacts on other attributes of streamflows (timing and quality). Given intense competition for limited water supplies and the predominant role of hydropower in river basins, conflicts increasingly arise between hydropower and consumptive uses, as with irrigated agriculture in Brazil and Chile (Dourojeanni and Jouravlev, 1999), and in some cases with other instream uses, like recreation. These conflicts are particularly common where hydropower relies on reservoirs with multi-year storage to allocate streamflow to meet power demand that is often out of phase with the seasonal requirements of other water uses, especially irrigation (Huffaker et al., 1993). In Chile, conflicts emerge between farmers who prefer to store water during winter for use during the summer growing season, while hydropower requires water to be stored during summer to meet high electricity demand in winter (Bauer, 2009). As reservoirs are often located upstream and are controlled by hydropower interests, farmers sometimes find much of their water cut off during the peak of the irrigation season; in some cases, they have had to be compensated by hydropower companies. In many countries, there are concerns about the impact of dam construction and operation on aquatic ecosystems and water quality. In Chile, the granting of water rights without the requirement of beneficial and effective use created a barrier to entry for competitors in various markets, particularly electricity generation, thus potentially reducing competition and fostering monopolization. As a result of the 2005 Water Code reform which, among other measures, introduced a licence fee for unused water rights, the situation has improved and unused water rights no longer present an impediment to energy sector development (Peña, 2005). 13.2 Energy consumption in the provision of water services In comparison with other developing regions, Latin America and the Caribbean is well advanced in the provision of water supply and sanitation services: 94% of its population has access to improved water sources and 82% to improved sanitation facilities (WHO/UNICEF, 2013b). Rising energy expenditures present challenges for the water industry: energy is often the highest component of operational costs (30–40%) associated with water supply services in the region (Rosas, 2011). The reasons for this situation are manifold: · Inefficient system design and operation, with little if any attention to energy efficiency · Bad asset condition and high unaccounted-for water (40% on average [Mejía and Rais, 2011], but up to 75% 96 CHAPTER 13 REGIONAL ASPECTSPDF Image | Water and Energy
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