i. Retrofit works

Existing facilities were retrofitted to release E-flows, such as adding flow release holes and modifying sluices. The installation of ecological generators was also encouraged, which can utilize E-flows to generate electricity to reduce economic losses.

Xiyuan projects included a reservoir- and a diversion-type project, the latter being 1.5 km downstream of the former along a 2-km diversion channel and a 1.5-km dry reach. The Xiyuan reservoir-type project was later retrofitted by adding sluices in the diversion channel to release E-flows, and an ecological generator with a capacity of 0.125 MW was installed in the power plant of the reservoir project. The estimated losses caused by releasing E-flows (340,000 kWh) equate to approximately 0.095 million CNY, equivalent to an extra 0.07 CNY/kWh (on-grid tariff) to cover the losses. The additional cost for the ecological generator, sluice retrofit, and monitoring facilities was 0.46 million CNY. The governmen<sup>t</sup> offers an extra on-grid tariff of 0.05 CNY/kWh as compensation as well as a subsidy of about 50% of the cost of the ecological generator.

### ii. Restricted seasonal operation

These diversion-type projects, which cannot meet the E-flows needs, were prohibited from operating during the dry season (December–February). For example, the Qingyuan diversion-type SHP, which resulted in a 6.8-km-dry reach, was prohibited from running during the season. The estimated resulting production losses were 0.31 million kWh, equivalent to approximately 0.93 million CNY, with an additional on-grid tariff of 0.072 CNY/kWh needed to cover the loss. The cost of the sluice retrofit and monitoring facilities also exceeded 0.05 million CNY. Based on the PES scheme, the SHP owner received an extra on-grid tariff of 0.05 CNY/kWh as compensation.
