Background
As part of work package 5 of the FIThydro project, a report is now available on the regulatory landscape which influences actions relevant to environmental improvements in the context of planning and operating hydropower plants (FIThydro Deliverable 5.1). Emphasis is given to the requirements of the EU Water Framework Directive (WFD), nature protection policies and policies on renewable energy and climate change adaptation, thereby outlining opportunities, barriers and challenges in reaching multiple environmental objectives. In addition to reviewing the regulatory landscape, the report also looks at the use of financing instruments especially in the countries where FIThydro test sites are located. The present review has identified a number of challenges as well as opportunities related either to the legislation and regime of authorisations or the financing tools for environmentally-friendly hydropower.

In general, challenges are related to uncertainties of the interpretation of the legal framework (e.g. of the WFD requirements for the objectives of heavily modified water bodies) or lack of specification of a time-frame for implementing miigation in existing HPP. In some countries of the countries investigated, there are ongoing reviews (or have been until recently) of the legislative framework and/or permit regime, which create uncertainty for the sector but also opportunities for new developments with appropriate mitigation of impacts.

European policies and national legislation
Several EU policies set ecological/environmental requirements on hydropower plants. Examples are EU policy requirements for environmental impact assessment as well as nature protection requirements of the Habitats Directive. Additionally, the further use and development of hydropower should consider the environmental objectives of the WFD, which aims at the achievement of good ecological status in European waters. The review of national policies concentrated on eight European countries in the four regions (Scandinavia, Alpine, Iberian peninsula and France/Belgium) where FIThydro test sites are located. These eight countries are also characterised by an important hydropower sector within these four regions. Important recent amendments to the key legislation have been highlighted because of their relevance to the operation of existing HPP or the authorisation of new HPP.

Strategic planning instruments
Most of the reviewed countries have strategic planning instruments in place for new hydropower use and development that are often part of or related to other planning processes. The kind of strategic planning instruments identified include the formulation of legal requirements on where development of hydropower is allowed or not, national/regional master plans or strategies to guide hydropower development, decision support systems to guide decision-making (e.g. criteria catalogues for hydropower development) as well as studies on the potential for hydropower.

Environmental requirements in the context of authorising hydropower plants
Prior to the strengthening of environmental legislation in the second half of the 20th century, many countries offered unlimited concessions or particularly long concessions to HPP.  However, based on recent changes in environmental legislation and social pressure, permit duration for HPP has been in general reduced. Still, there remains a large number of unlimited permits on old HPP which are complex to revise. In most of the reviewed countries, the duration of concessions generally differs between new and existing HPP. In specific, the WFD and revisions of national policy related to the WFD have been strong drivers for modifying authorisation procedures for new HPP as well as for revising permits of existing hydropower. According to this review, authorisations for existing hydropower are being adapted or are expected to be adapted to meet the requirements of the WFD in most of the eight countries examined.

Mitigation measure requirements for HPP
The type of mitigation measures required for new and existing HPP have been reviewed, focusing on the following key domains of environmental improvements at HPP: upstream/downstream fish migration, flow conditions, hydropeaking, gravel transport, habitat enhancement, as well as fish stocking provisions. Requirements for mitigation of the impacts of disrupted upstream fish migration and modified flow conditions are the ones most commonly based on legislation. In some countries, there is a lack of relevant requirements for mitigation related to gravel/sediment transport, hydropeaking impacts and downstream fish migration., mainly due to still open questions which need clarification through further research or pilot studies. In general, mitigation requirements for new and for existing HPP do not differ substantially, if there is an option to revise existing permits.

Financing instruments
In order to support the implementation of multiple environmental objectives, financing and support instruments for hydropower development should be linked to ecological criteria for the protection of the water environment. Results indicate that the instruments primarily being used in most countries are financial support schemes for the modernisation of existing plants, followed by feed-in tariffs and green power labels. Overall, the adequate financing to support necessary mitigation measures at hydropower stations still is a major bottleneck.

More details can be found in the deliverable 5.1 of FIThydro, which can be downloaded here.