3.2.1. Stakeholders' Skepticism

All respondent groups tended to be positive about "whether SHPs are green energy", with support from 96.4% of the owners, 90.9% of the administrators, and 81.8% of the public. However, of the corresponding groups, 51.7%, 69.1%, and 81.9% considered SHPs to have negative impacts on the environment, respectively. Similar proportions (54.6%, 63.3%, and 91%, respectively) supported the implementation of E-flows.

### 3.2.2. Economic Conflicts

Because the administrators required the SHPs to release E-flows without any compensation, SHP owners were not willing to follow the requirement. Implementing E-flows involves reducing the discharge volumes available to produce electricity, which inevitably results in economic losses for SHP owners.

The SHP owner and SHP administrator groups were asked about the magnitude of losses experienced with the 10%MAF strategy, the results of which are shown in Figure 3. Nearly two-thirds of the owners of diversion-type SHP and nearly half of the owners of barrier- and mixed-type SHP suggested that their losses would exceed 10%. The diversiontype SHP owners estimated losses to be more than 15%, and these estimates were much higher than those of the barrier- and mixed-type SHP owners.

**Figure 3.** Influences of releasing E-flows on electricity production losses estimated by the owners of different types of small-scale hydropower projects.

These estimates are corroborated by our calculations of electricity production losses assuming the 10%MAF method based on available information, which implies that losses vary between SHPs types (Table 1). For example, impacts on diversion-type projects ranged between 9.7% and 23.6%. Overall, the calculated losses tended to decrease with SHP capacity; for barrier-type projects, production losses ranged from 3.6% to 8.6% and decreased in line with the single installed capacity of the SHPs. In general, reservoir-type projects only have generators with large capacities, while run-of-river projects usually have more generators with different installed capacities. Therefore, reservoir-type projects typically suffer comparatively higher production losses. The losses of mixed-type projects vary from 9.7% to 11.7% of their expected electricity production. Both official data (Table 1) and the questionnaire responses show that different types of the SHPs are subject to varying production losses as a result of E-flows regulation, with diversion-type (accounting for 76.7% of the projects in Fujian Province) being most affected.

An analysis of the questionnaire responses from SHP owners and administrators relating to estimates of electricity production losses and average returns is presented in Figure 4. The SHP owners estimated slightly higher losses than the administrators, and more than one-third and one-fifth of the owners and administrators believed that E-flows accounted for 15% of losses, respectively. One-third of the administrators believed the losses were low (0–5%), while only one-seventh of the owners believed this was the case (Figure 4a). Overall, the administrators were more optimistic than the owners, with approximately one-third believing that SHP received > 10% profit compared to one-fifth of the owners (Figure 4b). Despite differences in opinions on average returns of SHPs, there was no marked difference in estimates of electricity production losses (*p* > 0.05), with both groups suggesting relatively losses overall (Figure 4a).


**Table 1.** Influence of releasing E-flows on electricity production losses of small-scale hydropower projects. Source: [47].

**Figure 4.** Estimates of (**a**) electricity production losses overall and (**b**) average returns of small-scale hydropower projects by owners and administrators.

> It is known that profits of SHPs will be lowered to several levels after releasing Eflows, particularly for diversion-type SHPs. Because the SHPs have E-flows releasing infrastructure, most SHP owners have to pay for retrofit costs. Without subsidy, the costs of releasing E-flows could only be covered by the owners, and this would worsen conflicts, resulting in their unwillingness to follow the regulations.
