“Hydropower is the forgotten giant of clean electricity, and it needs to be put squarely back on the energy and climate agenda if countries are serious about meeting their net-zero goals” – Fatih Birol, Executive Director of the International Energy Agency (IEA, 30 Jun 2021).

All major reports on how to achieve net zero by 2050 include a substantial increase in sustainable hydropower as a necessary element within the required clean energy mix to move away from fossil fuels, with various energy sources complementing each other. Hydropower’s crucial role is in its flexibility and ability to store excess wind and solar energy.

In the IEA Net Zero scenario, total hydropower capacity would need to double by 2050, adding at least 1300 GW. In its Global Renewables Outlook Energy Transformation 2050, the International Renewable Energy Agency (IRENA) states that an additional 850 GW of total hydropower capacity by 2050 is needed. The World Bank’s Climate Change Action Plan 2021-2025 identifies hydropower as a ‘key clean energy source’ for a ‘just transition’ away from fossil fuels.

Hydropower is today the largest source of renewable electricity, providing around 15% of the world’s capacity. It contributes to ca. 13% of total electricity generated in Europe – more renewable electricity than all other renewable sources combined (IAE).

The biggest growth in hydropower since the 1970s has occurred predominantly in emerging economies, mostly through public sector investments in large plants. Today, twenty-eight developing countries with a population of roughly 800 million receive most of their energy supply from hydropower, providing a relatively cost-effective way to increase access to electricity. There is still significant potential for additional investment in hydropower globally. Around half of hydropower’s economically viable potential is untapped, particularly in emerging economies.

On the other hand, advanced economies have seen a decline in the share of hydropower in electricity generation and their infrastructure is overall ageing. By 2030, more than 20% of the global fleet generating units are expected to be more than 55 years old, reaching the end of their useful lives and requiring replacement. In Europe and in North America, the average hydropower plant is between 45 to 50 years old respectively. However, projected spending on existing plants is not enough to meet the global hydropower fleet’s modernisation needs. Hence there is an urgent need for refurbishment and modernization to be able to continue to supply an affordable and reliable renewable electricity on demand and contribute to electricity security in a sustainable way in the future.

Although much of the new renewable development is based on wind and solar PV, their variable nature means that there will be a need for increased sources of flexible low carbon generation. This is one of the reasons hydropower has become pivotal to the EU’s target of achieving at least 32% of energy from renewables by 2030 and net zero emissions by 2050. The bold plan for energy transition in Europe involves a low-carbon climate-resilient future in a safe and cost-effective way, and the role of electricity will be crucial in this energy transition. In many European countries, the phase out of nuclear and coal generation has started with a transition to new renewable sources comprising mainly of solar and wind for electricity generation. Hydropower already supports integration of wind and solar energy into the supply grid through flexibility in generation, as well as its potential for storage capacity. Many hydropower plants can increase their electricity generation up and down very swiftly compared with other power plants, such as nuclear, coal and natural gas. At the same time, hydropower plants can also be stopped and restarted efficiently. This high degree of flexibility enables them to adjust quickly to shifts in demand and to compensate for fluctuations in supply from other renewable sources.

This makes hydropower a compelling option to support the rapid deployment and secure integration into electricity systems of solar PV and wind, whose electricity production can vary depending on factors like the weather and the time of day or year. With low operational costs and large storage capacities, existing reservoir hydropower plants are the most affordable source of flexibility today. By 2050, hydropower will be the dominant source of system flexibility. No low carbon options are available today that can deploy at the scale needed.

Hydropower has many other benefits. It provides an outstanding energy pay-back during its useful life, and at the same time it can play an important role in minimizing the damages of flood and drought.

It is not all positive, nevertheless. The hydropower sector has a number of challenges that hinder or slow down implementation. New hydropower projects are often subject to long lead times, prolonged permission procedures, high construction and running costs, risks from environmental assessments, and sometimes opposition from local communities. These factors can lead to higher investment risks and financing costs which can put off investors, if compared with other power generation and storage technologies. In emerging and developing economies, where we find the largest untapped potential for new hydropower, the attractiveness of such investments is affected by economic risks, concerns about the financial health of utilities and policy uncertainties. In advanced economies, the current market models often do not encourage the business case for pumped storage plants, and there are small incentives to modernise ageing infrastructure.

In Europe, there have been a number of campaigns from NGOs and communities to stop the construction of new dams. These groups are concerned about the potential detrimental effect of hydropower on waterways, impacting especially migratory fish species due to fragmentation caused by dams. Dams also disturb sediment, small stones, sand and fine particles that move with the flow of the river, damaging ecosystems both upstream and downstream.

There are also concerns that the energy source is not resilient to climate change. Some models predict there could be a 10% loss in electricity production from hydropower over the next 30 years as more extreme weather reduces the availability of water. The effect of climate change will not only alter the availability of water resources but will also both increase sediment yield, affecting the behaviour of the catchment areas, and cause more frequent natural risks, thus endangering hydropower production in the future.

Well-designed government policies are crucial for reducing risks related to permitting, construction, environmental and social acceptance challenges.

It is crucial that any new plant is built and operates sustainably, in accordance with internationally recognised standards and best practices. The role of the IHA has been crucial in creating a hydropower sustainability framework and standards for the deployment of more sustainable hydropower infrastructure. New hydropower projects should be developed in accordance with these guidelines to ensure they are built in a manner that reduces the impact on the environment and on local communities.

• IEA – Hydropower – More efforts needed (November 2021): https://www.iea.org/reports/hydropower
• IEA – Hydropower Special Market Report (June 2021): https://iea.blob.core.windows.net/assets/83ff8935-62dd-4150-80a8-c5001b740e21/HydropowerSpecialMarketReport.pdf
• IHA – Hydropower 2050 – Identifying the next 850+ GW towards Net Zero: https://assets-global.website-files.com/5f749e4b9399c80b5e421384/61a77590c14756ffbc828983_IHA%20Hydropower%202050%20Report.pdf
• IHA – Hydropower Sustainability Guidelines: https://assets-global.website-files.com/5f749e4b9399c80b5e421384/604b7d2381cf9d101f68472c_hydropower_sustainability_guidelines_feb_2021.pdf
• IRENA – Global Renewables Outlook (2020): https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_Global_Renewables_Outlook_2020.pdf
• World Bank Group Climate Change Action Plan 2021–2025: Supporting Green, Resilient, and Inclusive Development: https://www.financialprotectionforum.org/news/world-bank-group-climate-change-action-plan-2021%E2%80%932025-supporting-green-resilient-and-inclusive#:~:text=The%20Climate%20Change%20Action%20Plan,prosperity%20with%20a%20sustainability%20lens.
• IEA – Hydropower has a crucial role in accelerating clean energy transitions to achieve countries’ climate ambitions securely: https://www.iea.org/news/hydropower-has-a-crucial-role-in-accelerating-clean-energy-transitions-to-achieve-countries-climate-ambitions-securely
• Euronews – Is hydropower the controversial solution to Europe’s clean energy problem?: https://www.euronews.com/green/2021/04/15/why-is-hydropower-controversial-renewable-energy-europe
• Europe.eu – Hydropower in Europe: https://hydropower-europe.eu/about-hydropower-europe/hydropower-energy/
• POLITICO – Hydropower: The flexible key to a greener Europe: https://www.politico.eu/sponsored-content/hydropower-the-flexible-key-to-a-greener-europe/#:~:text=Hydropower%20contributed%20a%2013%20percent,combined%2C%20according%20to%20the%20IEA.