Letter To World Bank PCF Regarding Misuse of the Term "Small Hydro"

Ken Newcombe
Fund Manager, Prototype Carbon Fund
The World Bank
1818 H Street, NW
Washington, DC 20433

Dear Mr. Newcombe,

We are writing to you concerning your erroneous and misleading use of the term "small hydro" to describe all hydroelectric projects in the Prototype Carbon Fund’s Clean Development Mechanism portfolio. We ask that you correct this language on your website and in future publications.

The most commonly used definition of small hydro is that it applies to projects with an installed capacity of not more than 10 MW. According to the International Association for Small Hydro, the 10 MW threshold is "becoming generally accepted." Ten megawatts is used by inter alia the European Small Hydropower Association, and both the International Energy Agency’s Small–Scale Hydro Task Force, and Renewable Energy Working Party.

PCF’s annual reports and other public materials claim that all hydros in the PCF’s portfolio are "small" despite these including projects of up to 98 MW capacity. The PCF website and other materials explicitly describe hydros such as the 43 MW El Canadá and 26 MW Chacabuquito projects as "small hydro." When asked to clarify your definition of small hydro by International Rivers, the World Bank’s Carbon Finance Helpdesk stated on 2 April 2004 that "Small hydro would be 15 MW or less" consistent with the "Marrakech Accords definition of small–scale projects."

The PCF is clearly not applying its own definition of "small hydro." This definition furthermore confuses two separate issues. The Marrakech Accords establishes a category of "small–scale" projects for which simplified modalities and procedures can be used when seeking registration. But this does not mean that a hydro project that meets this criterion is a "small" hydro project in the sense that the term is commonly used; only that it is a "small–scale" project under the Marrakech Accords.

The distinction between small and large hydro is critical in helping to define what technologies are to be considered as "renewable." At the June 2004 Bonn renewables conference, World Bank staff, including Managing Director Peter Woicke, stressed that the World Bank would in the future exclude large hydro greater than 10 MW from their definition of renewables.

PCF publications make the misleading claim that "The primary focus of PCF projects is on renewable energy technologies – such as wind, small hydro, and biomass..." This is demonstrably false. Of the 8 hydro projects in the PCF portfolio for which we have Project Design Documents, only 3 are below the 10 MW threshold and thus "renewable" small hydro projects.

We ask therefore for an indication that the PCF will comply with prevailing practice and, consistent with the definition set out by the World Bank in Bonn, use the 10 MW limit for "small hydro" renewable projects, and that your website and publications will cease mislabeling large hydro projects.

We await your early reply.

Sincerely,

Patrick McCully
International Rivers
1847 Berkeley Way
Berkeley, CA 94703 USA

Ben Pearson
CDM Watch
42/177 Glenayr Avenue
Bondi 2026
NSW Australia