An integrated approach for assessing the economic impact of climate change on hydropower systems

The vulnerability of the hydropower sector to climate change necessitates a comprehensive assessment of its future implications for water and energy planning. In this study, an integrated framework is employed, intertwining climatic, hydrologic, hydropower simulation, and economic models to scrutinize climate-induced alterations in streamflow and their effects on hydropower generation and economics. Various General Circulation Models are applied to project future climatic conditions and the HadGEM3-GC31-MM model is selected for its superior performance. The study results indicate that, under the SSP1-2.6 and SSP5-8.5 scenarios, average temperatures are projected to rise by 0.8–1.58 °C, while annual precipitation may decrease by 3.3 %–16.6 %. These changes are projected to reduce streamflow by 4.7 % in the optimistic scenario and 20.1 % in the pessimistic scenario. Consequently, hydropower production at the Abriz and Maroun power plants is expected to decrease significantly, with total energy output reduced by 29.5 %, and substantial economic impacts estimated at 3.47 million dollars annually. These findings are crucial for guiding energy production strategies and water resource management under changing climatic conditions. The study provides valuable insights for stakeholders to make informed decisions and adapt to potential future challenges in the hydropower sector. • Comprehensive integration of hydrological, energy, and economic models. • HadGEM3-GC31-MM was chosen for projecting future climate. • Streamflow reductions lead to a significant decline in energy production. • Economic damages are estimated at $3.47M annually.