THE
CHANGING
ROLE OF

HYDRO
POWER
CHALLENGESANDOPPORTUNITIES© IRENA 2023
Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or
stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material
in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, andappropriate permissions from these third parties may need to be secured before any use of such material.

Citation: IRENA (2023), The changing role of hydropower: Challenges and opportunities,
International Renewable Energy Agency, Abu Dhabi.
ISBN: 978-92-9260-522-3

About IRENAThe International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports
countries in their transition to a sustainable energy future, and serves as the principal platform forinternational co-operation, a centre of excellence, and a repository of policy, technology, resource andfinancial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable
use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar andwind energy in the pursuit of sustainable development, energy access, energy security and low-carbon
economic growth and prosperity.

Acknowledgements
This report benefitted from the input and comments of experts, including Jean-Philippe Bernier (Natural
Resources Canada), Rebecca Ellis (International Hydropower Association), Jean-Christophe Fueeg (Swiss
Federal Office of Energy), Pravin Karki (World Bank), Francisco Kuljevan and Mark Christian (Electric Power
Research Institute), Paul Komor (University of Colorado at Boulder), Laura Lizano (Ministry of Environment
and Energy of Costa Rica), Baysa Naran (Climate Policy Institute) and Yuetao Xie (China Renewable Energy
Engineering Institute).
Valuable input was also provided by IRENA colleagues, including Dolf Gielen (ex-IRENA), Sonia Al-Zoghoul,
Emanuele Bianco, Ute Collier, Arieta Gonelevu, Pablo Ralón, Binu Parthan, Costanza Strinati (ex-IRENA)
and Emanuele Taibi (ex-IRENA).
This report was authored by Carlos Ruiz under the direction of Roland Roesch (Acting Director, IRENA
Innovation and Technology Centre).
Please send requests for further information or comments to publications@irena.org.
This report can be downloaded from www.irena.org/publications

Disclaimer
This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability ofthe material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides awarranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publicationor material herein.
The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain
projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are notmentioned. The designations employed and the presentation of material herein do not imply the expression of any opinion on the part of IRENA
concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.

Cover photo: Munimara © ShutterstockCONTENTS

Figures, tables and boxes.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5Abbreviations. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7

KEY MESSAGES.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8

01 INTRODUCTION .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10

02 HYDROPOWER TODAY .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11
2.1 Hydropower technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Hydropower services and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3 Potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.4 Current deployment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.5 Costs and investment trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

03 PRESENT CHALLENGES AND OPPORTUNITIES.  .  .  .  .  .  .  .  . 25
3.1 Ageing fleet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.2 Changing power systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.3 Investment needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

3

04 HYDROPOWER FOR THE FUTURE.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 36
4.1 Sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.2 Innovation and flexibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.3 Regulation and markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.4 Co-operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

REFERENCES.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 49
APPENDIX A List of countries, areas and regions
shown in the figures. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 55
APPENDIX B Regional figures .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 57
Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Central America and the Caribbean. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Eurasia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Europe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Middle East. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
North America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Oceania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
South America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

4

Figures
FIGURE 1

Generic reservoir hydropower plant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

FIGURE 2

Energy storage potential by region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

FIGURE 3

Hydropower installed capacity by year, 2000-2021 . . . . . . . . . . . . . . . . . . . . . 17

FIGURE 4

Hydropower installed capacity by region, 2021. . . . . . . . . . . . . . . . . . . . . . . . . 18

FIGURE 5

Global hydropower electricity generation, 2000-2019. . . . . . . . . . . . . . . . . . . 19

FIGURE 6

Hydropower project pipeline, 2022-2037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

FIGURE 7

Hydropower’s total installed costs, global weighted average,
2010-2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

FIGURE 8

Levelised cost of electricity for utility-scale renewable
power generation, global weighted average, 2010-2021. . . . . . . . . . . . . . . . . 22

FIGURE 9

Annual financial commitments in renewable energy by technology,
2013-2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

FIGURE 10

Annual financial commitments in hydropower, 2013-2018. . . . . . . . . . . . . . . 24

FIGURE 11

Global hydropower capacity by year of commissioning. . . . . . . . . . . . . . . . . . 26

FIGURE 12

Breakdown of hydropower fleet age by region . . . . . . . . . . . . . . . . . . . . . . . . . 27

FIGURE 13

Necessary hydropower capacity additions by 2050. . . . . . . . . . . . . . . . . . . . . 29

FIGURE 14

Comparison of renewable and non-renewable net capacity additions,
2001-2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

FIGURE 15

Net demand curve for a spring day in California in 2020. . . . . . . . . . . . . . . . . 31

FIGURE 16

Relative operational damage contributions to a Francis turbine . . . . . . . . . . 32

FIGURE B.1 Hydropower capacity and generation in Africa, 2000-2021 . . . . . . . . . . . . . . 57
FIGURE B.2 Hydropower installed capacity in Africa, 2021. . . . . . . . . . . . . . . . . . . . . . . . . . 58
FIGURE B.3 Hydropower project pipeline in Africa, 2022-2037 . . . . . . . . . . . . . . . . . . . . . . 58
FIGURE B.4 Hydropower capacity in Africa by year of commissioning. . . . . . . . . . . . . . . . 59
FIGURE B.5 Hydropower capacity and generation in Asia, 2000-2021. . . . . . . . . . . . . . . . 60
FIGURE B.6 Hydropower installed capacity in Asia, 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
FIGURE B.7 Hydropower project pipeline in Asia, 2022-2037. . . . . . . . . . . . . . . . . . . . . . . . 61
FIGURE B.8 Hydropower capacity in Asia by year of commissioning. . . . . . . . . . . . . . . . . 62
FIGURE B.9 Hydropower capacity and generation in Central America andthe Caribbean, 2000-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFIGURE B.10 Hydropower installed capacity in Central America and the Caribbean,
2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
FIGURE B.11 Hydropower project pipeline in Central America and the Caribbean,
2022-2037. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
FIGURE B.12 Hydropower capacity in Central America and the Caribbean by year ofcommissioning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
FIGURE B.13 Hydropower capacity and generation in Eurasia, 2000-2021. . . . . . . . . . . . . 66
FIGURE B.14 Hydropower installed capacity in Eurasia, 2021. . . . . . . . . . . . . . . . . . . . . . . . . 67
FIGURE B.15 Hydropower project pipeline in Eurasia, 2022-2037. . . . . . . . . . . . . . . . . . . . . 67
FIGURE B.16 Hydropower capacity in Eurasia by year of commissioning. . . . . . . . . . . . . . . 68
FIGURE B.17 Hydropower capacity and generation in Europe, 2000-2021. . . . . . . . . . . . . 69
FIGURE B.18 Hydropower installed capacity in Europe, 2021. . . . . . . . . . . . . . . . . . . . . . . . . 70
FIGURE B.19 Hydropower project pipeline in Europe, 2022-2037. . . . . . . . . . . . . . . . . . . . . 70
FIGURE B.20 Hydropower capacity in Europe by year of commissioning. . . . . . . . . . . . . . . 71
FIGURE B.21 Hydropower capacity and generation in the Middle East, 2000-2021. . . . . . 72
FIGURE B.22 Hydropower installed capacity in the Middle East, 2021. . . . . . . . . . . . . . . . . 73
FIGURE B.23 Hydropower project pipeline in the Middle East, 2022-2037. . . . . . . . . . . . . . 73
FIGURE B.24 Hydropower capacity in the Middle East by year of commissioning. . . . . . . 74
FIGURE B.25 Hydropower capacity and generation in North America, 2000-2021 . . . . . . 75
FIGURE B.26 Hydropower installed capacity in North America, 2021. . . . . . . . . . . . . . . . . . 76
FIGURE B.27 Hydropower project pipeline in North America, 2022-2037 . . . . . . . . . . . . . . 76
FIGURE B.28 Hydropower capacity in North America by year of commissioning. . . . . . . . 77
FIGURE B.29 Hydropower capacity and generation in Oceania, 2000-2021 . . . . . . . . . . . . 78
FIGURE B.30 Hydropower installed capacity in Oceania, 2021. . . . . . . . . . . . . . . . . . . . . . . . 79
FIGURE B.31 Hydropower project pipeline in Oceania, 2022-2037 . . . . . . . . . . . . . . . . . . . . 79
FIGURE B.32 Hydropower capacity in Oceania by year of commissioning. . . . . . . . . . . . . . 80
FIGURE B.33 Hydropower capacity and generation in South America, 2000-2021 . . . . . . 81
FIGURE B.34 Hydropower installed capacity in South America, 2021. . . . . . . . . . . . . . . . . . 82
FIGURE B.35 Hydropower project pipeline in South America, 2022-2037. . . . . . . . . . . . . . 82
FIGURE B.36 Hydropower capacity in South America by year of commissioning. . . . . . . . 83

6

Tables
TABLE 1

Power-related services of hydropower. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

TABLE 2Global hydropower potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

TABLE 3

Lifetimes of selected hydropower plant components. . . . . . . . . . . . . . . . . . . . 28

Boxes
BOX 1

Example – Hydropower battery hybrid project . . . . . . . . . . . . . . . . . . . . . . . . . 43

BOX 2

IRENA’s Electricity Storage Valuation Framework. . . . . . . . . . . . . . . . . . . . . . . 46

Abbreviations°C

degree Celsius

KWhkilowatt hour

BEP

best efficiency point

LCOE

levelised cost of electricity

GW

gigawattMW

megawatt

O&M

operations and maintenancePSH

pumped storage hydropower

PWhpetawatt hourTWhterawatt hour

USD

US dollar

IDB	Inter-American Development
Bank
IHA	International Hydropower
Association
IFPSH	International Forumon Pumped Storage

WETO	World Energy Transitions

Hydropower

Outlook

IRENA	International Renewable
Energy Agency

7

KEY MESSAGES› Hydropower is already the largest source of renewable electricity and an
important part of energy systems worldwide. Whilst untapped hydropower
potential is vast, strict and transparent sustainability criteria will have to befollowed to ensure that hydropower development is truly sustainable.
› IRENA’s 1.5°C Scenario suggests that if the world is to completely decarbonise
and meet the climate goals set in the Paris Agreement, hydropower installedcapacity, including pumped storage hydropower, should more than double
by 2050.
› This will require annual investments in hydropower to grow roughly
fivefold. However, as hydropower projects can struggle to attract investment,
governments and decision makers need to create a suitable businessenvironment that will attract investors.
› Most hydropower potential lies in developing countries. Financing institutions
need to work together with governments to overcome local risks andlimitations, find common ground and start funnelling much-needed investment
into these regions and countries.
› Hydropower has high value based on its ability to provide flexible energy
generation and other services, namely ancillary grid services, as well as water
management and socio-economic benefits. However, this value is not always
recognised by existing markets.
› Regulatory frameworks and markets should take all hydropower services into
account to reduce misalignment between compensation and infrastructureneeds. Attracting the nearly USD 100 billion needed in investments will require
markets that support modern hydropower operations and value the wide
range of hydro services appropriately.
› Most hydropower assets were built several decades ago to operate under
different conditions to those of today. Changes and current trends in the
power sector require both an acknowledgment of the value of hydropower,

8

Key Messages

and a rethinking of its future role. The increasing need to integrate variablegeneration resources, such as solar and wind, will lead to greater demand forgrid flexibility and balancing services, and for a change in the way hydropower
plants are operated and maintained.
› The world’s hydropower fleet is ageing and will need refurbishment. This
need presents an opportunity to introduce new technologies and to modernise
plants to fit the requirements of today’s power systems.
› While hydropower is susceptible to climate risks, it can also be a source of
resilience when projects are adequately planned. Existing plants will have to
be assessed and retrofitted where necessary to account for increased climate
risks, and new projects will need to incorporate these risks in their design.
› Key actions policy makers can take to better recognise the value of hydropower
and accelerate its deployment include the following:• Create an attractive business environment for hydropower.
• Develop and implement policies and markets that recognise the value ofthe flexibility and ancillary services provided by hydropower.
• Develop market frameworks that allow for broader participation ofhydropower in energy and capacity markets (including sub-hourlymarkets) in countries that do not have them yet.
• Develop incentives and financial support structures for the deployment
and testing of new hydropower technologies – either for refurbishment or
new development.
• Implement a combination of closely co-ordinated incentives and regulatory
streamlining that can accelerate the deployment of hydropower.
• Create a pipeline of bankable and sustainable projects, backed with robust
feasibility studies and following strict sustainability criteria.
• Embed the concept of integrated planning in long-term energy strategies,
not only focusing on the supply of energy, but also incorporating climate
risks, storage needs and water management.
› IRENA’s Collaborative Framework on Hydropower aims to raise awareness ofcurrent hydropower barriers, foster dialogue and the sharing of best practices
among the Agency’s stakeholders, and ultimately enable the deployment of
the additional hydropower capacity required for the energy transition.

9

01

INTRODUCTION
For over a century, hydropower has contributed to global development by generating
local jobs and providing affordable and reliable clean electricity. Hydropower is avery important component of power systems worldwide. It is the largest source of
renewable electricity, and it enables a higher penetration of variable renewables suchas solar and wind by providing balancing and flexibility services. Pumped storagehydropower (PSH) is the single-largest source of energy storage, accounting for
95% of the world’s electricity storage capacity (DOE, 2020). Beyond electricity,hydropower also provides other services, including storage for drinking and irrigationwater, increased resilience to flooding and droughts, and recreational opportunities.
However, despite being the most mature renewable technology, hydropower faces
challenges. These include the need to ensure sustainability and climate resilience;
address ageing fleets and the need for new investments; adaptation in terms ofoperation and maintenance (O&M) to meet modern power system requirements;
and updated market structures and business models that recognise and reward allof the services provided by hydropower beyond power generation.
Modernisation, use of the latest technological advancements, along withguaranteeing social and environmental sustainability, are key to overcoming
these challenges. Owing to the rising penetration of variable renewables, and ashydropower plants are increasingly called upon to operate outside conditions forwhich they were originally designed, markets and business models will have toadapt and appropriately reward the full suite of services provided by hydropower
beyond just power generation.
This document, produced in the context of IRENA’s Collaborative Framework on
Hydropower, is aimed at policy makers and hydropower practitioners. It provides asnapshot of the current status of hydropower and lays out a vision of how to maximise
and realise its potential. It does not aim to provide a comprehensive assessment ofhydropower technologies.

10

02

HYDROPOWER
TODAY

According to IRENA’s latest World energy transitions outlook, hydropower will
have to play a crucial role in keeping the rise in global temperatures to 1.5 degrees
Celsius (°C), providing power, flexibility and reliable support for power systems(IRENA, 2022a). To achieve this, however, hydropower’s deployment pace will needto increase substantially, especially considering the projected increase in clean
electricity demand owing to the decarbonisation of end-use sectors and a rapidly
ageing hydropower fleet (see section 3.1).

2.1 HYDROPOWER TECHNOLOGIESHydropower is a mature renewable energy technology that has been used to
produce low-carbon electricity for over one hundred years. It is generally classified
into three main sub-types:• Conventional hydropower• Impoundment or reservoir: This is the most common type of hydropower
plant, which uses a dam to store water in a reservoir. The water can be storedfor various purposes but is mostly fed into a turbine that runs a generator
and produces electricity, as shown in Figure 1.
• Run-of-river: This type of plant channels water directly from a river intoa penstock to rotate the turbine. It usually has very little or no storage
capabilities.

11THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure 1 Generic reservoir hydropower plant

Power gridTransformer
Dam

Power house
Generator
Penstock

IntakeTurbineOutflow• Pumped storage hydropower (PSH): This plant stores water at different
elevations in a lower and an upper reservoir. During periods of high demand,
water is released from the upper into the lower reservoir through a reversible
pump-turbine to generate electricity. This process is reversed during periods oflow demand, when water is pumped back into the upper reservoir. PSH plants
can be open- or closed-loop systems. Open-loop systems use a natural water
source as their lower reservoir, while closed-loop systems do not. While bothreservoirs are “off-river” or off-channel, closed-loop systems generally havefewer environmental impacts. PSH can play a critical role as a source of flexible
power storage in future power systems, enabling higher penetration of variable
renewable energy generation, such as wind and solar.
This report will consider both conventional and pumped storage hydropower.

12

Hydropower today

2.2 HYDROPOWER SERVICES AND BENEFITS
Hydropower is a low-carbon, renewable electricity source. However, its advantages
are not limited to power generation. In fact, many of its other services are becoming
increasingly important in the context of the energy transition and climate change.
As seen in Table 1, hydropower plants offer a broad range of services to the grid that
include balancing and ancillary services, and enjoy a high capacity factor relative tosome other renewable energy sources. Additionally, hydropower can provide water
services such as flood control, irrigation control, water distribution and wastewater
control. Finally, water storage areas can offer recreational value through facilities
such as boat ramps, beaches, picnic areas and trail systems.

Table 1 Power-related services of hydropower
Hydropower plant type
RoR

Reservoir

PSH

Power generation
Positive

Balancing

Negative
Positive

Primary
Frequency
regulation
Ancillary
services

Negative
Positive

Secondary

Negative
Positive

Tertiary

Negative

Voltage support
Non-frequency
regulation

Active power-loss
compensation
Black start

Note: The green circles indicate that a plant can provide this service while the red circles indicate it
cannot. Positive balancing refers to the ability to supply the correct amount of electricity to the gridto meet fluctuations in demand. Negative balancing would imply consuming electricity to counter
oversupply. Positive frequency regulation refers to the act of feeding energy to the grid in order
to increase the system frequency and level out frequency deviations. Negative regulation requires
consuming energy from the grid. PSH = pumped storage hydropower; RoR = run-of-river.
Adapted from: Gaudard and Romerio (2014).

13

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

2.3 POTENTIAL
Despite being the largest renewable power source in terms of both installedcapacity and power generation, hydropower has yet to be fully exploited. As shownin Table 2, hydropower potential has been estimated in a number of studies withvarying results, although all results confirm that considerable potential remains.
This finding is particularly important when considering that hydropower is one of
the cheapest forms of renewable electricity and has levelised cost of electricity(LCOE) values that are among the lowest of all power generation technologies(see section 2.5).

Table 2 Global hydropower potential
Hydropower potential

PWh/year

Theoretical

31-127

Technical

13-31

Economic

9-15

Note: PWh = petawatt hour.
Source: Lehner, Czisch and Vassolo (2005); Fekete et al. (2010); Pokhrel, Oki and Kanae (2008); Zhou
et al. (2015); Hoes et al. (2017); Gernaat et al. (2017).

Gernaat et al. (2017) conducted a high-resolution assessment of globalhydropower potential, concluding that total global hydropower potential isaround 50 petawatt hours per year (PWh/year). They also estimate a potential of
5.7 PWh/year below USD 0.1/kilowatt hour (kWh)1 and an ecological2 potentialof 3.3 PWh/year below USD 0.1/kWh. To put this into context, 3.3 PWh/year isequivalent to over three-quarters of the global hydropower generation in 2018(4.2 PWh/year). Most of this potential lies in Asia, South America and Africa –regions where continued growth and economic development are expected.

1

The fossil-based LCOE range in 2019 was USD 0.05-0.18/kWh (IRENA, 2020).
Ecological restrictions require hydropower plants to release at least 30% of the discharge to maintainnatural river flow and a preference for small reservoirs.

2 

14

Hydropower today

Glacier conservation should undoubtedly be a top priority. Using these areas forwater storage could mitigate some of the impacts of ice retreat, such as diminishingwater resources and changes in run-off. A study by Farinotti et al. (2019) investigates
the hydropower potential offered by areas that are expected to become ice freeduring the course of this century due to the changing climate. In this study, they
estimate a theoretical hydropower potential of 0.8-1.8 PWh/year, of which around
40% would be feasible for realisation (0.3-0.7 PWh/year). Three-quarters of thepotential storage volume could be ice free as early as 2050. In this case, it isestimated that the predicted storage volume would be enough to retain about halfof the annual run-off leaving these sites.
Hydropower can also provide long-term energy storage services through PSH
configurations. As seen in Figure 2, the Australian National University, in their Global
Pumped Hydro Atlas, identified 616 000 potentially feasible PSH sites globallywith a storage potential of 23 terawatt hours (TWh) (RE100, 2019). Similarly,
Hunt et al. (2020) estimate that the potential for seasonal PSH below a costof USD 0.05/kWh is 17.3 PWh/year, justifying the very large potential with a lower
land requirement of seasonal PSH compared to conventional hydropower dams. Thispotential is substantially larger than the storage required by the transition, which
is roughly equivalent to 80% of the world’s electricity generation and extremely
important for the hydropower industry, given the growing value of its flexibility andbalancing capabilities.
Finally, hydropower does not necessarily need to be considered in isolation. Somesites offer the possibility of developing hybrid projects (e.g. wind/hydro or floating
photovoltaic [PV]/hydro), opening the possibility of deploying even more renewablecapacity. According to one study, the technical potential for installing floating solar
PV on existing reservoirs worldwide reaches 4.2-10.6 PWh/year (Lee et al., 2020),
equivalent to over a third of the world’s electricity generation.

AUUSanAKUL © Shutterstock15

WorldNote: GWh = gigawatt hour.
Source: RE100 (2019).

16
South East Asia

Southern Asia

Eastern Asia

Central Asia

Western Asia

Southern Europe

Eastern Europe

Western Europe

Northern Europe

Southern Africa

Eastern Africa

Central Africa

Western Africa

Northern Africa

South America

Caribbean

Central America

United States

CanadaPolynesia

Melanesia

New ZealandAustralia

GWh per million people

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure 2 Energy storage potential by region
10 000

9 000

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0

Hydropower today

2.4 CURRENT DEPLOYMENTHydropower is the most mature renewable energy technology, with its first projects
dating back to the late 1800s. Figure 3 shows that significant progress has been
made, with conventional hydropower growing by more than 75% in 2000-2021,
reaching an installed capacity of over 1 230 gigawatts (GW). PSH capacity, on
the other hand, grew by over 50% in the same period, reaching 130 GW in 2021.
Together, they account for over 50% of global renewable installed capacity.

Conventional

GW (PSH)

2021

2020

2019

2018

2017

2016

0
2015

0
2014

20

2013

200

2012

40

2011

400

2010

60

2009

600

2008

80

2007

800

2006

100

2005

1 000

2004

120

2003

1 200

2002

140

2001

1 400

2000

GW (conventional)

Figure 3 Hydropower installed capacity by year, 2000-2021

PSH

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

In terms of geographic distribution, Figure 4 shows that the majority of the world’shydropower capacity is in Asia (42%), followed by Europe (17%), North America(15%), South America (13%), Eurasia (7%) and the rest of the world (6%). It isnoteworthy that for most regions, PSH represents 9-13% of total hydro installedcapacity; however, it is almost completely absent in Latin America, apart from a few
plants in South America (<1 GW).

17

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

600

80

500

60

40
300
30
200

20

Conventional
Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Rodphothong Mr.Patchara © Shutterstock

18

PSH

South Africa

Oceania

North America

Middle East

Europe0
Eurasia0Central America
and Caribbean

10

Asia

100

GW (PSH)

50

400

AfricaGW (conventional)

Figure 4 Hydropower installed capacity by region, 2021

Hydropower today

Hydropower is also the largest source of renewable electricity globally. As shown in
Figure 5, hydropower generated approximately 4.3 PWh of electricity globally in 2019,
which is equivalent to 65% of all renewable generation or over 16% of all electricity
generation. This makes hydropower extremely important not only as a renewablegeneration source, but for power systems worldwide, particularly since hydropoweris also able to offer clean flexibility and balancing services to power grids. Chinais the largest producer of hydropower globally (1.3 PWh/year), followed by Brazil(0.4 PWh/year), Canada (0.4 PWh/year) and the United States (0.3 PWh/year).

Figure 5 Global hydropower electricity generation, 2000-2019
4 500

140

4 000

120
100

3 000
2 500

80

2 000

60

1 500

TWh (PSH)

TWh (conventional)

3 500

40

1 000
20

500

Conventional

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

0
2000

0

PSH

Note: TWh = terawatt hour; PSH = pumped storage hydropower.
Source: IRENA (2022c).

As Figure 6 shows, beyond these numbers, there are approximately 650 GW
of hydropower already in the project pipeline with plans to come on line in thenext 25 years, including 136 GW of PSH3 (S&P Global, 2022). The vast majorityof these projects will be deployed in Asia, which accounts for almost 60% ofconventional capacity and over 50% of the total PSH capacity in the project pipeline.

The Power Construction Corporation of China unofficially announced plans to start constructionof 270 GW of PSH capacity by 2025 (Bloomberg, 2022). Figure 6 does not include this figure andcontemplates only 40 GW of PSH in the pipeline for China.

3 

19

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESIn terms of conventional hydropower, South America and Africa follow with 14% and
12% of the capacity in the pipeline, respectively. In terms of PSH, Europe and North
America follow Asia, with 21% and 17% of the pipeline, respectively. Similar to what
was observed above, there are virtually no PSH projects in the pipeline in Latin
America, except for the 300 megawatts (MW) in Chile.

Figure 6 Hydropower project pipeline, 2022-2037

515 GW

136 GW

Conventionalhydropower

Pumped storagehydropower

Asia

South America

AfricaAsia

AfricaEuropeEuropeNorth America

Eurasia

North America

Eurasia

Middle East

Oceania

Central America and the Caribbean

Middle East

Note: GW = gigawatt.
Based on: S&P Global (2022).

A regional overview of the numbers presented above can be found in Appendix B.

2.5 COSTS AND INVESTMENT TRENDS
Hydropower costs
Hydropower costs are site specific and depend on a project’s size and specification,with the largest cost component being the civil works, which account forroughly 45% of the costs and include the construction of the dam, tunnels,

20

Hydropower today

canal and powerhouse, as well as any other infrastructure needed to access thesite. This is followed by the procurement costs of the electromechanical equipment,
which account for roughly 33% of the total costs (IRENA, 2022d).
Total installed costs for newly commissioned hydropower plants have risen over the
past decade, as seen in Figure 7. The global weighted-average total installed cost of
new hydropower in 2021 was USD 2 135/kW for large projects and USD 2 000/kW
for small projects. The increase in total installed costs could be partly attributed to
the fact that the best hydro sites have already been developed and countries are
now trying to develop hydropower in less than ideal sites with higher than average
installed costs. Another important component is the share of new deploymentsin each region, as they have different costs (e.g. total installed costs for largehydropower are highest in Oceania and Central America and the Caribbean, while
the lowest are in China and India) (IRENA, 2022d).

Figure 7 Hydropower’s total installed costs, global weighted average,
2010-2021

Large (>10MW)

Small (<10MW)

5 000

4 000

3 000
2 617 2 548

2 399

10

200

400

600

1 605

2 000

1 795 1 867

Capacity (MW)≥800

Note: kW = kilowatt; MW = megawatt.
Source: IRENA (2022d).

21

1

5

10

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

1 485

2011

2010

2021

2020

2019

Capacity (MW)

2 349

2 328
1 388

1 512

1 501

2017

2013

2012

2011

0

1 261 1 343

2010

1 000

2015

1 291

2 135

1 779

2018

1 585 1 655

1 934

1 927 1 872

2016

2 000

2014

2021 USD/kW

3 330

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESDespite being highly capital intensive, hydropower is one of the cheapest sourcesof electricity. As seen in Figure 8, the global weighted average LCOE of utility-scalehydropower projects was USD 0.048/kWh in 2010-2021 – lower than any fossilfuel-based alternative and only bettered by the LCOE of onshore wind power. LCOE
values can vary substantially, first because of the investment costs, which are site
dependent, but also depending on how the plant is designed to operate (to provide
base or peak load, ancillary services, etc.) and the capacity factors achieved(IRENA, 2022d).

Figure 8 Levelised cost of electricity for utility-scale renewable
power generation, global weighted average, 2010-2021
Bioenergy

Geothermal

Solarphotovoltaic

Hydropower

Onshorewind

Offshorewind

Concentrating
solar power

0.5
0.417

0.4

95th percentile2021 USD/kWh

0.358

0.3
5th percentile

0.2

0.188

Fossil fuel cost range

0.1
0

0.078

0.114

0.102
0.067
0.050

0.068
0.039

0.048

0.048

0.075
0.033

2010 2021 2010 2021 2010 2021 2010 2021 2010 2021 2010 2021 2010 2021
Capacity (MW)

≤1

100

200

≥ 300

Note: kWh = kilowatt hour; MW = megawatt.
Source: IRENA (2022d).

For a more comprehensive analysis of hydropower costs, please refer to IRENA’s
latest Renewable power generation costs report (IRENA 2022d).

22Hydropower today

Investment trends
Renewable energy deployment is growing at a considerable pace, attracting
USD 1.8 trillion in investment between 2013 and 2018 (IRENA and CPI, 2020).
However, despite being one of the cheapest sources of renewable electricity, overthe last decade, investments in hydropower have been dwarfed by investments
in solar PV and wind technologies, as shown in Figure 9. Over that same period,
approximately USD 72 billion were invested in hydropower. This amount is equivalent
to roughly 4% of all investments in renewable energy – a relatively small amount,especially when considering that it is a mature technology that generates around
65% of all renewable electricity.

Figure 9 Annual financial commitments in renewable energy by technology,
2013-2018
400
450
300

USD billion

250
200
150
100
50
0

2013

2014
Solar PV

2015

CSP

Onshore wind

Unknown

Biomass

Note: CSP = concentrated solar power; PV = photovoltaic.
Source: IRENA and CPI (2020).

23

2016

2017

Offshore wind
Biofuels

2018
Hydropower

Geothermal

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure 10 provides an overview of the financial commitments in hydropower
between 2013 and 2018. As can be seen, hydropower investments decreased
gradually from 2013 to 2016 before increasing substantially in 2017. Together,hydropower investments in 2017 and 2018 totalled USD 26 billion and USD 15 billion,
respectively, and were larger than the combined investments in the previous four
years. Finally, in terms of sourcing, 75% of the USD 72 billion invested between 2013
and 2018 corresponded to public investment, leaving the private sector with only
one-quarter of the total investment during that period (IRENA and CPI, 2020).

Figure 10 Annual financial commitments in hydropower, 2013-2018
30
25

USD billion

20
15
10
5
0

2013

2014

2015

Source: IRENA and CPI (2020).

Mihai_Andritoiu © Shutterstock

24

2016

2017

2018

Hydropower today

03

PRESENT CHALLENGESAND OPPORTUNITIESDespite being the most mature renewable technology, hydropower is not without
its challenges. These include changing water flows due to climate change,social and environmental impacts, an ageing fleet and changing power system
requirements that increasingly require hydropower plants to operate in ways they
were not originally designed to. These challenges call for additional investments inhydropower in the form of modernisation, including refurbishment, and new capacity
to cope with present and future power system requirements. Attracting finance is achallenge due to the nature of hydropower development and its timelines, an issue
that will be addressed in this chapter. Also important is the need for new businessmodels and market structures that appropriately reward the services, other thanpower generation, that hydropower can provide and that are increasingly morevaluable, like flexibility and balancing services.

3.1 AGEING FLEETHydropower has been providing renewable electricity around the world for over a
century. Inevitably, this also means that a large number of power plants are quite
old, given their extremely long lifetimes. Historically, hydropower plant lifetimes
have varied substantially from plant to plant, ranging from less than 10 to over
100 years. An analysis of the global hydropower fleet shows that the average ageof hydropower plants in operation is close to 40 years, while the average lifetime ofalready retired hydropower plants was around 60 years (S&P Global, 2022).

25

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure 11 provides a breakdown of the global hydropower capacity by yearof commissioning. The data support the points raised above, showing thathydropower plants are indeed aged. However, they also indicate that over 50% of
the world’s hydropower installed capacity (roughly 620 GW) is over 30 years old
and approximately 25% (roughly 275 GW) is over 50 years old. These values are
only indicative since some of these plants have already been refurbished. A detailed
and accurate overview of the remaining useful life of the global hydropower fleet
would necessitate a plant-by-plant assessment. However, it is clear that ageing
fleets already present a real challenge in several countries and could eventually
become a challenge for others. Andritz (2019) estimates that 50% of the primaryand secondary equipment installed worldwide is more than 40 years old.

Figure 11 Global hydropower capacity by year of commissioning
50

10%

20%

30%

40%

50%

70% 80%90%100%

60%

45
40
35

GW

30
25
20
15
10

Operational

2020

2015

2010

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

1955

1950

1945

1940

1935

1930

1925

1920

1915

1910

1905

1900

1895

N/A

0

1890

5

RetiredNote: Data include pumped hydropower storage. Data points with no commissioning date aregrouped under N/A. The green vertical lines with percentages indicate the share of the total
operational hydropower capacity commissioned by a certain year, e.g. 10% of the global capacity wascommissioned before 1960. GW = gigawatt; N/A= not available.
Based on: S&P Global (2022).

26

Hydropower today

As Figure 12 demonstrates, this issue does not currently affect all regions equally.
Regions like Europe, North America and Oceania have considerably older fleets
than others such as Africa, Asia, the Middle East and South America, where most of
the hydropower assets were commissioned in the last 30 years. In this regard, there
appears to be a clear distinction between developed and developing economies,
as developed economies began exploiting their hydropower resources earlier andtherefore have more urgent refurbishment needs. However, the issue of an ageing
fleet and refurbishment needs will eventually become relevant for all regions. Thishighlights the need for countries with older plants to act urgently and modernise
their fleets. Even countries with relatively new fleets can already start planning andmaking provisions for the eventual modernisation of their plants, as it may takesome time to deploy the necessary resources.

Figure 12 Breakdown of hydropower fleet age by region

GW

360
340
320
120
100
80
60
40
20
0
80%
70%
Percentage

60%
50%
40%
30%
20%
10%
0

AfricaAsia

CentralEurasia
Americaand Caribbean

60+

Europe30+

MiddleEast<30

Note: Data include pumped hydropower storage. GW = gigawatt.
Based on: S&P Global (2022).

27

North
America

OceaniaSouth
AfricaTHE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESThe global hydropower fleet is reaching a tipping point, where a large share of theinstalled capacity will soon require upgrades, refurbishment or possibly retirement.
All options will require considerable investments in the form of capacity additions ormaintenance costs if capacity is to be maintained on line. It is important to highlightthat different components have different lifetimes, as shown in Table 3.

Table 3 Lifetimes of selected hydropower plant components
Economic
lifetime(years)Technical
lifetime(years)Generators, transformers

25-40

30-60

High-voltage switchgear, auxiliary electrical equipment, control
equipment

20-25

30-40

Batteries, direct current equipment

10-20

20-30

Kaplan and Francis turbines

30-40

30-60

Pelton turbine

40-50

40-70

Pump turbine and storage pumps

25-33

25-50

25-40

25-50

Dams, canals, tunnels, caverns, reservoirs, surge chambers

60-80

80-150Powerhouse structures, water catchment, spillway, sand traps,
penstocks, steel linings, roads, bridges

40-50

50-80

Electrical installations

Mechanical installations
Turbines

Gates, butterfly valves, special valves, cranes, auxiliary mechanical
Civil works

Source: Goldberg and Espeseth Lier (2011).

IRENA’s 1.5°C Scenario suggests that if the world is to completely decarbonise
and meet the climate goals outlined in the Paris Agreement by 2050, hydropower
installed capacity should reach roughly 3 000 GW, including 420 GW of PSH (IRENA,
2022a). As shown in Figure 13, when considering the present installed capacity(1 360 GW), the current pipeline (652 GW) and the potential plant retirements
by 20504 (630 GW), capacity additions and/or refurbishments amounting to
1 545 GW will be needed.
Assuming an average lifetime of 60 years for a hydropower plant.

4 

28

Hydropower today

Figure 13 Necessary hydropower capacity additions by 2050
3 500
3 000

GW

2 500
2 000
1 500
1 000
500
0

2021

Pipelinefor 2037

Potential
retirements*
Conventional

Additions andrefurbishments

1.5°C Scenario
2050

PSH

Note: *Dark grey represents potential retirements of conventional hydropower capacity. Light grey
represents potential retirements of PSH capacity. This was calculated assuming a 60-year average
lifetime for a hydropower plant. GW = gigawatt; PSH = pumped storage hydropower.
Based on: IRENA (2022a, 2022b); S&P Global (2022).

To put this number into perspective, the average capacity of hydropower projects
in the pipeline is 160 MW (S&P Global, 2022), which means that in the coming
decades thousands of new hydropower plants would need to be deployed globallyat a rate of 53 GW/year until 2050. Given the long planning and construction timethat hydropower projects require, countries need to start making considerable
investments and developing additional hydropower capacity in the short term
if the Paris Agreement’s climate goals are to be met. That being said, not all of
the capacity has to come from greenfield projects; for example, existing facilities
can benefit from capacity increases, and non-powered dams can be retrofitted
to generate electricity. Research estimates that roughly 78 GW could be added
through these two options (Garrett, McManamay and Wang, 2021).
The advanced age of a large share of the global hydropower fleet is indeed apressing challenge. However, it is also the perfect opportunity to modernise using
the latest technological advancements, including cutting-edge components that canincrease plants’ efficiency, flexibility and sustainability. Also, digitalisation, artificial
intelligence and big data can improve operations and facilitate decision making.
This will enable hydropower to adapt to the increasingly complex requirements
of present and future power systems with high shares of variable renewables andcontinue to provide valuable energy services reliably in the future.

29

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

3.2 CHANGING POWER SYSTEMSIn recent decades, renewable capacity additions have increased substantially. As
seen in Figure 14, by 2012, renewable generation capacity additions had alreadyexceeded those of non-renewables, and in 2020 nearly 90% of net capacity
additions were renewable, with solar PV and wind technologies accounting
for almost 90% of these additions. While this trend undoubtedly signifies great
progress towards the decarbonisation of the power sector, it also implies the needfor significant changes in power systems and the way they are managed. As theshare of variable renewables in power grids increases, they require more flexible
resource capabilities to ensure grid reliability.

Figure 14 Comparison of renewable and non-renewable net capacity
additions, 2001-2020
100%
90%
250

80%
70%

200
GW

60%
50%

150

40%
100

30%
20%

50

Solar PV

Wind

Other RE

Non-renewable

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

10%
0

Share of RE in capacity additions

300

0%

RE share %Note: GW = gigawatt; PV = photovoltaic; RE = renewable energy.
Sources: IRENA (2019, 2022b); IEA (2021a).

Since variable renewable energy (VRE) sources are non-dispatchable, theiravailability might not necessarily match the times at which the energy isactually needed most; for example, solar electricity production is at its peakat mid-day when electricity demand may not be at its highest. For this reason,system operators increasingly need to rely on dispatchable electricity sources
like hydropower for frequency control, energy storage and peak load supply.

30

Hydropower today

As more variable renewables are added to the grid, the ramping requirements
increase, and so does the risk of oversupply and possibly curtailment during
periods of low demand. To illustrate what is known as the “duck curve”, Figure 15
shows the evolution of net demand (total demand minus the demand met by VRE
sources) in California, a state with a high share of variable renewables which have attimes covered over 75% of electricity demand. An increase in ramping requirements
is evident here: the three-hour ramping requirement in 2013 was close to 3 GW,
compared to over 13.5 GW on a spring day in 2020.

Figure 15 Net demand curve for a spring day in California in 2020
30
25

GW

20
Avg. ramp (3 hrs.)
3 GW in 201313.5 GW in May 2020

15
10

Net demand 2015

Net demand May 2021

00:00

23:00

22:00

21:00

20:00

19:00

18:00

17:00

16:00

15:00

14:00

13:00

12:00

11:00

9:00

Net demand 2013

10:00

8:00

7:00

6:00

5:00

4:00

3:00

2:00

0

1:00

5

Net demand 2017

Avg. 3 hr. ramp (2021)

Note: Net demand is the demand not met by solar or wind generation. GW = gigawatt.
Source: CAISO (2022).

Operational consequences
Most hydropower plants were planned, designed and built to operate under
different conditions to those of today, and therefore they are not unaffected by thechanging power system. Historically, hydropower has been a source of base load
generation. However, it is increasingly used as peaking capacity and as a sourceof ancillary services. This results in plants having to operate at partial loads more
frequently, with a substantial increase in their number of start-stop cycles.

31THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESThis change in hydropower operation modes introduces additional wear and tear,shortening the lifespan of important plant components like the turbine, increasing
downtime and O&M costs. To exemplify this, Seidel et al. (2020) compared a baseload and a grid stabilisation scenario for a Francis turbine (see Figure 16) and foundthat the latter scenario shortened the fatigue life of the turbine by approximately
one order of magnitude.

Figure 16 Relative operational damage contributions to a Francis turbine
Base load
Grid stabilisation
0.00
Start-up

0.10

0.20

Speed no load

0.30

0.40

0.50

Low part load

0.60

Part load

0.70

0.80

Around BEP

0.90

1.00

High Load

Start-up[cycles/day]

Speed noload[%]

Low part
load
[%]

Part
load
[%]

Around
BEP
[%]

High
load
[%]

Base load

1

1

0

25

49

25

Grid stabilisation

10

4

24

24

24

24

Operational mode

Note: The baseload scenario considers one start-up cycle per day. BEP = best efficiency point(i.e. is the flow at which the turbine operates at its highest efficiency).
Source: Seidel et al. (2020).

Financial consequences
The other consequences of this change in operations are financial. The outdated
design of many hydropower projects can affect their revenue streams and theirability to be profitable. Increased downtime, higher O&M costs and reduced power
generation volumes are factors at play.
In the case of PSH, most plants were built decades ago around day-night arbitrage
business models to compete with oil- and gas-based peaking capacity. However,when fuel prices are low, and as combustion efficiencies improve, day-night
arbitrage may be insufficient to justify the investment in a PSH plant (ANL, 2014).
PSH can offer benefits to the grid that fossil-fuel-based power plants cannot, suchas storage and flexibility capabilities that enable higher variable renewable shares.

32

Hydropower today

However, the value of these services is hard to define with precision and, therefore,
hard to reward appropriately. This is a crucial topic that is the focus of substantial
research and where policy interventions are needed. One thing is certain though, asvariable renewable shares in power systems grow, the value of storage and ancillary
services provided by hydropower increases as well, and so does the importanceof adequately rewarding the provision of these services and maintaining the
profitability of hydropower projects.

3.3 INVESTMENT NEEDSAs detailed in sub-section 3.1, substantial hydropower capacity additions will beneeded if the clean energy transition is to materialise. However, this cannot happen
without substantial investments to finance the construction and refurbishment of
all these hydropower projects. IRENA’s World energy transitions outlook estimatedthat if the climate goals are to be achieved by 2050, the necessary investments
in conventional hydropower and PSH amount to USD 85 billion/year and
USD 8.8 billion/year, respectively (IRENA, 2022a). This is more than three times theinvestment in hydropower seen in 2017, and more than five times the investment
in 2018. This highlights the urgency for governments to put in place policies that
boost hydropower project bankability and incentivise investment in the technology,
especially when considering its long development timeframes.
Reaching the necessary level of investment is not an easy task, particularly because
investing in hydropower can be more challenging than investing in other renewableenergy technologies for a number of social, technical, regulatory and market-related
reasons, including:• Capital intensity and site specificity: Hydropower, like some other renewable
technologies, is capital intensive. However, it is also highly site specific. This resultsin the need to have multiple components individually designed for a specificproject, unlike solar or wind projects that rely on standardised panels or turbines,
a fact that impacts time and cost. Furthermore, due to the difficulty in precisely
predicting geotechnical conditions before construction starts, unexpected costs
and delays can occur (Markkanen and Plummer Braeckman, 2019).

33

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES• Limited sources of financing: Hydropower financing requires long-tenor loans,making it more unattractive for private investors than other shorter-term projects.
Furthermore, hydropower usually has high construction risks. Higher-risk projects
are less attractive to private finance and thus may need public finance, although
they can be developed and financed as public-private partnerships (IFC, 2015).
• Social and environmental concerns: Despite having made great progress interms of sustainability over the last few decades, hydropower still has a reputation
for being less sustainable than many other renewable energy technologies. Thisis mostly caused by the fact that when hydropower projects are not adequately
planned or managed, the consequences can be catastrophic, something that has
unfortunately happened in the past and which highlights the need for significant
regulatory oversight to ensure safety and environmental support. That being
said, adequately planned and managed hydropower projects can minimise
environmental impacts while offering substantial socio-economic benefits,some of which are mentioned in section 2.2. To further clarify this last point,
an assessment carried out by the World Bank’s Independent Evaluation Group
found that over 90% of the Bank’s evaluated hydropower investments compliedwith the applicable environmental and social safeguards and performancestandards (World Bank, 2020).
• Regulatory uncertainty: The process of granting a concession for a hydropower
project is much longer and more complex than that of other renewable energy
technologies, such as solar and wind power. Hydropower makes use of hydrologic
resources, therefore, it is not as simple as making a plot of land available. This
complexity can cause delays and uncertainty in the development of projects(Markkanen and Plummer Braeckman, 2019). Furthermore, environmental
complexity, unclear information, lack of expertise and limited human capacity inlicensing authorities can cause delays (Levine, 2021).
• Inadequate valuation: Not all of the value of a hydropower plant can bequantified in monetary terms, which causes a disparity between financial andeconomic viability. Hydropower projects tend to be valued on their capacity togenerate electricity while overlooking other benefits like increased grid flexibility
and reliability, increased resilience to floods and droughts, and multiple othersocio-economic benefits that are difficult to quantify (more on this can be readin section 4.1). Furthermore, ancillary services provided by hydro plants are notalways rewarded appropriately by grid operators, an issue that is especiallychallenging for PSH plants.

34

Hydropower today• Lack of bankable projects: The number of fully studied projects available islimited and many of the most promising are located in developing economies.
Some of these developing economies might not have the necessary credit
ratings, which makes projects in these economies more difficult to finance, evenwhen capital is available (Markkanen and Plummer Braeckman, 2019).

M. Niebuhr © Shutterstock35

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES04

HYDROPOWER
FOR THE FUTURE

Hydropower will be essential for the decarbonisation of the energy sector. However,for hydropower to have a bright future, it needs to keep up with the changing times,
which means that some aspects need to be improved and some adjustments need
to be made. This applies across the hydropower sector, relevant markets, andregulators and other stakeholders. This chapter will describe the changes necessary.

4.1 SUSTAINABILITY
Renewable energy projects must be sustainable and resilient. Hydropower is
no exception since poor planning and management can have considerable andunfortunate impacts on society and the environment. Examples include forced
resettlement, the alteration of river flow regimes, the fragmentation of ecosystems
and the changing of habitats. To avoid this, new hydropower projects need to beplanned and implemented, prioritising the minimisation of the negative social andenvironmental impacts without compromising their ability to generate electricity andprovide ancillary and water services. This can be achieved by ensuring that adequate
measures that protect communities, water flows, water quality and local species areembedded throughout the development and operation of hydropower projects.
Like any other infrastructure project, the environmental impacts of hydropower
projects cannot be completely avoided. However, impacts can be minimised oroffset. For example, when it comes to PSH, closed-loop schemes generally havelower environmental impacts than open-loop schemes, mainly due to their higher

36

Hydropower today

siting flexibility and the fact that they are located offstream (PNNL, 2020). In
this sense, countries considering new PSH systems might want to prioritise thedeployment of closed-loop systems. The impacts can further be reduced if projects
make use of pre-existing infrastructure, such as mines and quarries. Furthermore,environmental impacts can be offset by the benefits offered by multipurposehydro projects. For example, research has shown that the water storage capacity
provided by dams can supply additional water for irrigation, drinking and industrialuse, as well as flood regulation, which all translate to economic benefits. Some ofthese benefits can be funnelled into efforts such as afforestation, which can offset
some of the environmental costs of submerged areas due to dam construction(Amjath-Babu et al., 2019).
Hydropower technology has made considerable progress toward sustainability overthe last couple of decades. For example, fish-friendly turbines, now in operation,and the increasingly common inclusion of fish ladders in dams to prevent the
fragmentation of migration routes. Other relevant innovations include the standard
modular hydropower5 being researched by the US Department of Energy, and therestoration hydro6 being developed by the American company Natel Energy.
Other notable efforts to increase the sustainability of hydropower projects havebeen made by the International Hydropower Association (IHA), which together
with a multi-stakeholder council, has developed Hydropower Sustainability Tools,
which include guidelines for good practices and a sustainability assessment
protocol. In addition, in September 2021, the IHA launched the Hydropower
Sustainability Standard, under which projects can be rated and certified based on
their sustainability compliance.7
Despite significant progress, more efforts need to be made to minimise the impact
of hydropower projects. Additional research and best practices are needed tounderstand and address certain phenomena, such as methane emissions fromsubmerged vegetation in impoundment areas and exposure to methylmercury watercontamination. Addressing environmental impacts at the planning stage is easier,cheaper and more effective than doing so after a project has been constructed.
Standard modular hydropower can be conceptualised by deconstructing a small hydropower plant into
discrete functional units each with a dedicated purpose and a common interface (Witt et al., 2017).
6 
Restoration hydro consists of the restoration of degraded water basins through the use of biomimicryin the form of low-head structures paired with a small turbine (Natel Energy, 2020).
7 
For more information on the Hydropower Sustainability Standard and Tools, see:www.hydrosustainability.org/.
5 

37

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESA key support of future hydropower developments is the concept of integrated
planning, which allows for (EC, 2018):• the integration of water, nature and energy policy objectives;• the involvement of all interested stakeholders, which can reduce subsequent
impacts and conflicts;• the prioritisation of energy, nature and water management considerations;• increased transparency and the streamlining of authorisation processes;• the management of risks of the cumulative effects of hydropower plants; and• the integration of a strategic planning approach through river basin management.
The last point is particularly important. The planning of hydropower projects
should not be done exclusively at the plant scale. Instead, new projects need to beplanned at a system scale that can potentially include other interconnected assets,
an entire river basin or even a region. An analysis performed by the Inter-American
Development Bank indicated that a system-scale planning approach can identify
potential conflicts earlier than project-based approaches, and for a given energy
output, the former approach has the potential to reduce social and environmental
impacts (IDB, 2013). Finally, for hydropower to be truly sustainable, governments
should prioritise transparency by including civil society in the planning process.
Another critical element related to hydropower sustainability is sedimentmanagement. Early and consistent attention to the processes of reservoir
sedimentation is needed to ensure the long-term resilience of hydropower facilities.
Reservoir sedimentation reduces the storage capacity of reservoirs and damages
hydromechanical equipment, posing a threat to the sustainability of hydropower,
water supply and irrigation services (Annandale, Morris and Kakri, 2016).
Reservoir hydropower can increase resilience against weather-related phenomena,for example, by accumulating water before the dry season to mitigate the impact ofdroughts, and by managing water and mud flows during flood events. However, it isalso vulnerable to changes in weather. The effects of climate change on hydropower
generation are expected to be varied across different plants and countries,
with some expected to receive more rainfall while others become dryer.8

Regions, countries and plants will all be affected differently. Not all hydropower plants are expected
to be affected negatively by climate change. Some could see increased run-off, which would be
beneficial for their production. These effects should be evaluated at a plant-specific level.

8 

38

Hydropower today

Anticipating climate-change-induced changes in rainfall, water flows and extreme
weather events is crucial for hydropower development planning (IEA, 2021b) as well as
adequate power system planning. It is particularly important for governments, operatorsand decision makers to be aware of the issues that climate change can create on
annual run-offs, their time distribution and sedimentation. The IHA produced a Climate
Resilience Guide9 for the hydropower sector, which offers a methodology for identifying,assessing and managing climate risks to enhance the resilience of hydropower projects.

4.2 INNOVATION AND FLEXIBILITY
As mentioned in Chapter 3, hydropower plants face challenges, including an ageing
fleet and a changing role in power systems which has impacted their profitability.
As challenging as this situation is, it also presents an excellent opportunity formodernising hydropower plants, enhancing their overall flexibility with efficiency
and operating range increases, and making them more economically viable.
Digitalisation
Hydropower plants stand to gain multiple benefits from upgrading assets withcomponents designed for modern-day operations (i.e. under wider operation
ranges, faster ramping requirements and multiple start-stop cycles) and adopting
innovative O&M schemes. As the foundation of this process, digitalisation could
improve data availability, facilitate better decision making, and improve theresolution and capabilities of plant controls. The digitalisation of operations canenable plants to enhance the range and efficiency of their operations, reduce O&M
costs and extend their lifetimes.
With the introduction of intelligent digital control strategies and monitoring,
operators will be able to collect more data and better understand the behaviourof a plant and its components under different conditions. This will allow for betterinformed decisions and better management of the plant’s operations. Digitalisation
will also provide input for better component designs that will enable more flexible
operations. It will also open the door for implementing predictive maintenancestrategies, which could reduce O&M costs and increase plant availability.
For more information on the Climate Resilience Guide, see:www.hydropower.org/publications/hydropower-sector-climate-resilience-guide.

9 

39

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESThe use of digital twins exemplifies innovation in this field. Digital twins aremathematical replicas of a physical plant which allow for the simulation of different
operating conditions and the monitoring of various parameters and systemcharacteristics. In this way, digital twins could be used to predict the behaviourof a plant under certain conditions which, in turn, allows for the optimisation ofoperations, and the improvement of maintenance schemes. Kougias et al. (2019)
estimate that digitalisation of the world’s hydropower fleet could increase annual
production by 42 TWh, equivalent to roughly 1% of annual production. While thisnumber seems relatively small, this study quantifies the annual operational savings
as USD 5 billion. Other relevant tools are building information modelling andvirtual design and construction, which can help to improve hydropower projects
throughout the entire project life cycle. It is worth highlighting that it might not
be necessary to digitalise an asset fully, and value could be added through partial
digitalisation.
As mentioned before, hydropower projects are highly site specific. The unique natureof each hydropower plant, not only in terms of design but also in terms of operation,is certainly one of the main challenges to hydropower’s digitalisation. This raises theimportance of standardisation. Standards can facilitate the digitalisation process
and enable the compatibility and sharing of information among different actors
and across borders. In addition, many hydropower projects are considered criticalinfrastructure, and therefore increased cyber-security measures will be needed toprevent any unforeseen security-related issues.
Flexibility
For hydropower to have a relevant role in future energy systems, beyond baseload
generation, it will have to contribute to the grid with both capacity (short-term
flexibility) and energy (medium- and long-term flexibility) (INESC TEC, 2020).
As mentioned earlier, many hydropower plants were developed decades ago
under different operational circumstances. This results in plants having to operate
at partial loads more frequently, and with a substantial increase in the numberof start-stop cycles and load changes. Hydropower assets can greatly benefit
from improvements aimed at increasing their own flexibility, and consequently,
the overall system flexibility. This can be done in different ways, for example(INESC TEC, 2020):

40

Hydropower today• Plant redesign: Addition of storage facilities by installing pumps, reversible
pump turbines or batteries. This option requires civil works, new equipment and,in some cases, a reinforced grid connection.
• Equipment upgrades: Older facilities can benefit from modern equipment which
can increase their efficiency, capacity and operating range. For example, DOE(2018) estimates that by modernising equipment, plants can achieve a 1-3%
increase in efficiency. This option requires civil works, new equipment and/or, insome cases, a reinforced grid connection.
• “Smarter” plants: Technology has advanced considerably in the last decade, andnew sensory and testing capabilities from turbine manufacturers have resulted
in software that can make operations more efficient and controllable and expand
the operating range of hydropower plants. This option does not require civil
works or major equipment changes.
These upgrades not only benefit the grid, they can also benefit the plants themselves
by increasing their income, for example, by operating at lower loads or facilitating
participation in ancillary services markets. For instance, in 2013, the Electric Power
Research Institute estimated that expanding the operating range of the existing
PSH plants in the United States could increase their income by 61% on average(EPRI, 2013).
Hybrid hydropower
Additional synergies can be harnessed by hybridising hydropower with other VRE
technologies. Adding solar PV or wind generation to hydropower plants can offer
multiple advantages. For example, pairing hydropower with floating solar PV canoffer (Lee et al., 2020):• Better land use efficiency, avoiding the need for new land and reducing landuse conflicts.
• Water conservation by reducing water evaporation.
• Improved system operation at different time scales (seasonal, daily, hourly
and sub-hourly) by taking advantage of the complementarity of these twotechnologies.
• Power output compensation during dry periods.
• Additional energy storage opportunities when paired with PSH and using
excess solar generation to pump water.

41

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES• Improved transmission utilisation by providing increased power generationand offering higher capacity factors than stand-alone systems.
• Reduced curtailment, with the PV system supplying electricity during peak
production hours and hydropower ramping up and down as needed, or by using
PV generation to pump water in PSH plants.
• Reduced transmission system interconnection costs by using the existingtransmission infrastructure.
As mentioned in section 2.3, the technical potential of installing floating solar PV
on existing reservoirs worldwide reaches 4.2-10.6 PWh/year (Lee et al., 2020), thelatter amount being equivalent to over a third of the world’s electricity generation.
Another interesting alternative for hydropower hybridisation is pairing with batteryenergy storage systems. By pairing batteries with a hydro generator, several
benefits can be obtained, including lifetime extension by reducing mechanicalstresses, additional opportunities for energy and ancillary market participation,
flexible storage and an increase in the operating range (Andritz, 2022).

Norbachov © Shutterstock42

Hydropower today

Box 1 Example – hydropower battery hybrid project
The province of Alberta, Canada, has a grid that relies heavily on fossil-fuel-based
generation and has limited hydropower resources. Solar photovoltaic and wind
deployment are growing quickly, as is the need to compensate for their variability.

Vicinity map

1
5

2
3

4

Phase 1
battery energy storage
systemPhase 2
battery energy storage
system6

Temp. construction
facilities area

7

Potential distribution
connection area
Existing facilities:

1 Ghost dam 2 Hydropower plant 3 138 kV substation
5 Workshop building 6 Office trailers 7 Warehouse

4 Office/admin building

Note: kV = kilovolts; Temp. = temporary

While fossil-fuel-based generation can easily provide the required flexibility, a better
alternative is hydropower, since it has no emissions. However, with limited hydropower
assets, the challenge is maximising their flexibility.
In order to address this issue, Canadian power provider TransAlta is planning to develop
the WaterCharger Battery Storage Project, which intends to add 180 megawatts (MW)of lithium-ion battery storage to the MW 56 Ghost hydropower plant.
The project will offer multiple benefits, including:•

Ensuring that the batteries are charged with clean electricity (important for a gridthat heavily relies on fossil-fuel-based generation).

•

Allowing the producer to extract value out of the minimum flows (required forenvironmental reasons) by using them to charge the batteries which could
otherwise lose their value due to wind and photovoltaic energy surpluses.

•

Using stored electricity in periods of higher demand or low solar and wind
generation.

•

Increasing the provision of ancillary services through the large increase in capacity.

The project is planned for construction in 2023 and is expected to be completed innine months.
Source: TransAlta (2022).

43

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

Pumped storage hydropower
As the largest source of energy storage technology, PSH will undoubtedly play amajor role as a flexibility provider in future power systems. With that said, there is
still room for improvement when it comes to the flexibility of PSH plants. Utilisingvariable speed drives for the pumps could be a major upgrade for some existing PSH
plants and important technology to consider for future projects. According to EPRI
(2013), adding variable speed drives to PSH plants in the United States could increase
their income by as much as 85%. Most PSH plants are only capable of regulating
their power production output, while pumps are only able to run at full capacity.
With variable speed drives, pumping power can also be regulated, allowing for more
flexible operation and the ability to better integrate surplus electricity from the grid,i.e. pumps can run at partial capacity, making them more flexible (GE, 2016).

4.3 REGULATION AND MARKETS
Governments can be instrumental in guaranteeing the continued deployment ofhydropower and, in that way, pave the way for the decarbonisation of the power
sector. They can help attract the necessary investment in hydropower by providing
incentives and creating a suitable business environment. Some of these incentives
include (Markkanen and Plummer Braeckman, 2019):
•
•
•
•
•

Relief from taxes and duties.
Concessional grants or loans.
Accelerated asset depreciation.
Subsidies based on environmental performance.
Subsidies for services provided beyond power generation (e.g. water
management).
• Capital cost contributions (e.g. when a project offers benefits that are hard tomonetise, such as flood control).
• Support structures for the deployment and testing of new technology.

44

Hydropower today

Governments can also facilitate the further deployment of hydropower bystreamlining concession and licensing processes which would reduce some of theregulatory uncertainty surrounding hydropower projects and make them more
attractive investments. That said, neither incentives nor regulatory streamlining
alone might be enough to develop the necessary hydropower capacity. A
combination of closely co-ordinated incentives and regulatory streamlining could
accelerate the deployment of hydropower (Cox, 2016). Furthermore, sustainablehydropower could also benefit from being included in green bond taxonomies tofunnel increased levels of investments, which is not always the case, depending onmarket perceptions and risk-averse behaviour from bond issuers.
Small hydropower projects could particularly benefit from these efforts,
as they are disproportionately affected by capital costs associated withpre-development studies and permitting. “Larger projects can absorb licensing
costs through economies of scale in a way that is not possible for smaller projects”(Levine et al., 2021).
Electricity markets will also have to change to adequately remunerate the large
suite of services provided by hydropower beyond just electricity generation. As theshares of variable renewables increase in power systems worldwide, hydropower’s
capacity to provide ancillary services becomes increasingly valuable. However,most markets do not currently recognise or remunerate this added value in full.
In some markets, hydropower would benefit from being allowed to increase its
participation in energy markets, including sub-hourly markets, allowing the powersystem to benefit from its full flexibility. The development of forward markets
could also benefit hydropower resources that must schedule their production.
Additionally, developing a system through which demand response can be brought
to the market would help reduce market power in both energy and reserves
markets, enabling hydropower (and other generators) to receive competitiveenergy and ancillary service prices. In a nutshell, markets should take advantage ofthe flexibility offered by hydropower, while rewarding its storage capabilities andregulation services, such as dynamic reactive power support, primary frequency
response and sub-hourly deployment services (EPRI, 2013).

45

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESBox 2 IRENA’s Electricity Storage Valuation Framework
In March 2020, IRENA published the report, Electricity
Storage Valuation Framework: Assessing system value
and ensuring project viability. The report proposes a fivephase method to assess the value of storage and create
viable investment conditions. It aims to guide storage
deployment for the effective integration of solar and wind
power. The report consists of three parts which examinestorage valuation from different angles:•

Part 1 outlines the framework’s process for decision makers, regulators and grid
operators.

•

Part 2 describes the framework’s methodology in greater detail for experts andmodellers.

•Part 3 presents real-world cases, including examples of cost-effective storage use
and maximised service revenues.

The report’s findings include:•

Storage services help to manage the variability and uncertainty that solar and wind
use introduces into the power system.

•

By providing multiple services simultaneously, electricity storage permits revenue
stacking for greater profitability.

•

Some storage technologies are intrinsically more suited than others for certain
services. For instance, battery storage energy systems provide a rapid response tosignals, opening the way for new, high-value system services.

•Electricity storage could accelerate off-grid electrification, enable far higher sharesof variable renewable energy, and indirectly help to decarbonise the transport
sector.

•Poor accounting for storage value results in so-called “missing money”, with market
revenues too low to entice investors.

46

Hydropower today

Historically, ancillary services have mostly been provided at fixed prices throughlong-term contracts instead of through spot markets. The creation of innovative
market structures and mechanisms that adequately remunerate the growing
value of these services is critical to ensure the economic feasibility of hydropower
projects – in particular PSH projects. Only a few countries presently have markets
that remunerate these services adequately. A good example is Ireland, where theDS3 Programme by EirGrid, the transmission system operator, seeks to address
the challenge of integrating very high shares of variable renewable generation into
its grid. This programme recognises and provides payment for 14 different grid
services that ensure that the system operates securely and efficiently (EirGrid,
2020). Research has shown that the value of hydropower plants can be substantiallyhigher if they participate in both energy and ancillary services markets than if they
operate only in the energy market. “This increase is the most significant for units
with low water availability since they are able to earn profits providing ancillary
services without using their scarce water resources” (Perekhodtsev and Lave, 2018).

4.4 CO-OPERATION
Finally, the role of international and multi-stakeholder co-operation in hydropower’s
future success is considerable. Industry, governments and regulators need to work
together, share lessons learnt and co-operate in developing innovative solutions
that will address hydropower’s present challenges. River basin management isclearly one area where co-operation is critical, as it is a discipline that requires theco-ordination and co-operation of a diverse group of stakeholders that can extend
across borders. International co-operation, through the sharing of experiences andbest practices, can accelerate the creation of favourable policies and regulations
relevant to hydropower.
There are several ongoing efforts to foster co-operation at different levels. In
2020, IRENA launched a Collaborative Framework on Hydropower10, a platform
meant to bring countries together to identify priority areas, develop concerted
actions and foster international collaboration to better understand the role ofhydropower in the energy transition, raise awareness on its most pressing issues
and ensure its widespread deployment in the future. The framework aims toadvance progress in areas relevant to hydropower, including financing, flexibility,

For more information on the Collaborative Framework on Hydropower, please contact info@irena.org

10 

47

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

resilience and sustainability. Furthermore, the Collaborative Framework is open
to private sector participation, serving as an effective vehicle for public-private
dialogue, co-operation and co-ordinated action to ensure the continued deploymentof hydropower technologies.
Another initiative is the International Forum on Pumped Storage Hydropower11(IFPSH). The IFPSH is a government-led multi-stakeholder platform launched by
the IHA and chaired by the US Department of Energy. This forum seeks to shapeand enhance the role of PSH by developing guidance and recommendations on how
sustainable PSH can best support the energy transition.

Yalcin Sonat © Shutterstock

For more information on the IFPSH, see: https://pumped-storage-forum.hydropower.org/.

11 

48

References

REFERENCES

Amjath-Babu, T. S., Sharma, B., Brouwer, R., Rasul, G., Wahid, S.M., Neupane,N., Bhattaraif, U. and Siebera, S. (2019), “Integrated modelling of the impactsof hydropower projects on the water-food-energy nexus in a transboundary
Himalayan river basin”, Applied Energy, Vol. 239/April, pp. 494-503,
https://doi.org/10.1016/j.apenergy.2019.01.147.
Andritz (2022), “HyBaTec – Hybrid battery solution for hydropower by ANDRITZ
Hydro”, Andritz Hydro, Graz, https://www.andritz.com/products-en/hydro/products/hybrid-solutions/hybatec (accessed 20 April 2022).
Andritz (2019), Large Hydropower Solutions, Andritz Hydro, Graz,
www.andritz.com/resource/blob/33066/28ecc2bdf39febb5e05a8d80134a71ee/
hy-large-hydro-data.pdf.
ANL (2014), Modeling and Analysis of Value of Advanced Pumped Storage
Hydropower in the United States, Argonne National Laboratory, Lemont, IL,
https://publications.anl.gov/anlpubs/2014/07/105786.pdf.
Annandale, G. W., Morris, G. L. and Kakri, P. (2016), Extending the Life ofReservoirs: Sustainable Sediment Management for Dams and Run-of-River
Hydropower, Directions in Development – Energy and Mining, World Bank,
Washington, D.C., https://openknowledge.worldbank.org/handle/10986/25085.
License: CC BY 3.0 IGO.
Bloomberg (2022), “China’s massive hydro energy storage goals may be getting
bigger”, Bloomberg News Website, Bloomberg, London, www.bloomberg.com/
news/articles/2022-06-14/china-s-massive-hydro-energy-storage-goals-may-begetting-bigger.

49

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESCAISO (2022), “Today’s outlook”, California Independent System Operator,
Folsom, California, www.caiso.com/TodaysOutlook/Pages/index.html(accessed 31 March 2022).
Cox, S. (2016), Financial Incentives to Enable Clean Energy Deployment Policy
Overview and Good Practices, National Renewable Energy Laboratory, Golden, CO,
www.nrel.gov/docs/fy16osti/65541.pdf.
DOE (2020), DOE Global Energy Storage Database, U.S. Department of Energy,
National Technology & Engineering Sciences of Sandia, LLC, Albuquerque,www.sandia.gov/ess-ssl/global-energy-storage-database/.
DOE (2018), Hydropower Vision: A New Chapter for America‘s 1st Renewable
Electricity Source, U.S. Department of Energy, Washington, D.C.,
www.energy.gov/sites/default/files/2018/02/f49/Hydropower-Vision-021518.pdf.
EC (2018), Guidance Document on the Requirements for Hydropower in
Relation to EU Nature Legislation, European Commission, Brussels,
https://ec.europa.eu/environment/nature/natura2000/management/docs/
Hydro%20final%20June%202018.pdf.
EirGrid (2020), “DS3 Programme”, EirGrid Group, Dublin,www.eirgridgroup.com/how-the-grid-works/ds3-programme/(accessed on 20 January 2020).
EPRI (2013), Quantifying the Value of Hydropower in the Electric Grid:
Final Report, Electric Power Research Institute, Washington, D.C.,
www.epri.com/research/products/000000000001023144.
Farinotti, D., Round, V., Huss, M., Compagno, L. and Zekollari, H. (2019),“Large hydropower and water-storage potential in future glacier-free basins”,
Nature, Vol. 575/November, pp. 341-344.
https://doi.org/10.1038/s41586-019-1740-z.
Fekete, B., Wisser, D., Kroeze, C., Mayorga, E., Bouwman, L., Wollheim, W. M.
and Vörösmarty, C. (2010), “Millennium ecosystem assessment scenario drivers(1970-2050): Climate and hydrological alterations”, Global Biogeochemical
Cycles, Vol. 24/4, https://doi.org/10.1029/2009GB003593.

50

References

Garrett, K., McManamay, R. A. and Wang, J. (2021), “Global hydropower
expansion without building new dams”, Environmental Research Letters, Vol 16/11,
https://iopscience.iop.org/article/10.1088/1748-9326/ac2f18#artAbst.
Gaudard, L. and Romerio, F. (2014), “The future of hydropower in Europe:
Interconnecting climate, markets and policies”, Environmental Science and Policy,
Vol. 37/ March, pp. 172-181, https://doi.org/10.1016/j.envsci.2013.09.008.
GE (2016), “Variable-speed pumped storage”, GE Renewables, Paris,
www.ge.com/renewableenergy/sites/default/files/related_documents/infographic-psp-ge.jpg.
Gernaat, D. E. H. J., Bogaart, P.W., van Vuuren, D. P., Biemans, H. and Niessink,
R. (2017), “High-resolution assessment of global technical and economichydropower potential”, Nature Energy, Vol. 2/10, pp. 821-828,
https://doi.org/10.1038/s41560-017-0006-y.
Goldberg, J. and Espeseth Lier, O. (2011), “Rehabilitation of hydropower: An
introduction to economic and technical issues”, World Bank, Washington, D.C.,
https://openknowledge.worldbank.org/handle/10986/17251. License: CC BY 3.0 IGO.
Hoes, O. A. C., Meijer, L. J. J., van der Ent, R. J. and van de Giesen, N.C.
(2017), “Systematic high-resolution assessment of global hydropower
potential”, PLOS ONE, 12, PLOS, San Francisco,https://doi.org/10.1371/journal.pone.0171844.
Hunt, J. D., Byers, E., Wada, Y., Parkinson, S., Gernaat, D. E.H. J., Langan, S.,
van Vuuren, D. P. and Riahi, K. (2020), “Global resource potential of seasonal
pumped hydropower storage for energy and water storage”, Nature
Communications, Vol. 11/947, https://doi.org/10.1038/s41467-020-14555-y.
IDB (2013), The Next Frontier of Hydropower Sustainability: Planning at the
System Scale, Inter-American Development Bank, Washington, D.C.,
https://publications.iadb.org/en/new-frontier-hydropower-sustainabilityplanning-system-scale.
IEA (2021a), “Electricity information”, International Energy Agency, Paris,
www.iea.org/data-and-statistics/data-product/electricity-information(accessed 16 March 2022).

51

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESIEA (2021b), “Hydropower special market report: Analysis and forecast to 2030”,
International Energy Agency, Paris,
www.iea.org/reports/hydropower-special-market-report.
IFC (2015), “Hydroelectric Power: A guide for developers and investors”,
International Finance Corporation, Washington, D.C., https://openknowledge.
worldbank.org/handle/10986/22788. License: CC BY-NC-ND 3.0 IGO.
INESC TEC (2020), XFLEX Hydro: Flexibility, Technologies and Scenarios for
Hydropower, Institute for Systems and Computer Engineering, Technology
and Science, Porto, https://xflexhydro.net/flexibility-technologies-and-scenarios-for-hydropower-report.
IRENA (2022a), World energy transitions outlook 2022: 1.5°C Pathway,
International Renewable Energy Agency, Abu Dhabi, www.irena.org/publications/2022/Mar/World-Energy-Transitions-Outlook-2022.
IRENA (2022b), Renewable capacity statistics 2022,
International Renewable Energy Agency, Abu Dhabi,
www.irena.org/publications/2022/Apr/Renewable-Capacity-Statistics-2022.
IRENA (2022c), “Statistics time series”, International Renewable Energy Agency,
Abu Dhabi, www.irena.org/Statistics/View-Data-by-Topic/Capacity-and-Generation/Statistics-Time-Series.
IRENA (2022d), Renewable power generation costs in 2021, International
Renewable Energy Agency, Abu Dhabi, www.irena.org/publications/2022/Jul/Renewable-Power-Generation-Costs-in-2021.
IRENA (2019), “Renewable energy now accounts for a third of global
power capacity”, International Renewable Energy Agency, Abu Dhabi,
www.irena.org/newsroom/pressreleases/2019/Apr/Renewable-Energy-Now-Accounts-for-a-Third-of-Global-Power-Capacity (accessed 16 March 2022).
IRENA and CPI (2020), Global landscape of renewable energy finance 2020,
International Renewable Energy Agency, Abu Dhabi, www.irena.org/publications/2020/Nov/Global-Landscape-of-Renewable-Energy-Finance-2020.

52

References

Kougias, I., Aggidis, G., Avellan, F., Deniz, S., Lundin, U., Moro, A., Muntean,S., Novara, D., Pérez-Díaz, J. I., Quaranta, E., Schild, P. and Theodossiou, N.
(2019), “Analysis of emerging technologies in the hydropower sector”,
Renewable and Sustainable Energy Reviews, Vol. 113/October,
https://doi.org/10.1016/j.rser.2019.109257.
Lee, N., Grunwald, U., Rosenlieb, E., Mirletz, H., Aznar, A., Spencer, R. andCox, S. (2020), “Hybrid floating solar photovoltaics-hydropower systems:
Benefits and global assessment of technical potential”, Renewable Energy,Vol. 162/December, pp. 1415-1427, https://doi.org/10.1016/j.renene.2020.08.080.
Lehner, B. Czisch, G. and Vassolo, S. (2005), “The impact of global change on
the hydropower potential of Europe: A model-based analysis”, Energy Policy,
Vol. 33/7, pp. 839-855, https://doi.org/10.1016/j.enpol.2003.10.018.
Levine, A. Pracheil, B., Curtis, T., Smith, L., Cruce, J., Aldrovandi, M.,
Brelsford, C., Buchanan, H., Fekete, E., Parish, E., Uria-Martinez, R., Johnson, M.
and Singh, D. (2021), An Examination of the Hydropower Licensing andFederal Authorization Process, National Renewable Energy Laboratory, Golden, CO,
www.nrel.gov/docs/fy22osti/79242.pdf.
Markkanen, S. and Plummer Braeckman, J. (2019), “Financing sustainablehydropower projects in emerging markets: an introduction to concepts andterminology”, The University of Manchester and University of Cambridge
Institute for Sustainability Leadership, Cambridge, www.cisl.cam.ac.uk/resources/sustainable-finance-publications/financing-sustainable-hydropower-projects-in-emerging-markets-an-introduction-to-concepts-and-terminology.
Natel Energy (2020), “Restoration hydro”, Natel Energy Inc., Alameda, CA,
www.natelenergy.com/restoration-hydro/ (accessed on 20 January 2021).
Perekhodtsev, D. and Lave, L. (2018), Value of Hydro Power Plants in Integrated
Markets for Energy and Ancillary Services, Carnegie Mellon University,
Pittsburgh, PA, https://doi.org/10.1184/R1/6709043.v1.
PNNL (2020), A Comparison of the Environmental Effects of Open-Loop andClosed-Loop Pumped Storage Hydropower, Pacific Northwest National
Laboratory, Richland, WA, www.energy.gov/eere/water/downloads/comparison-environmental-effects-open-loop-and-closed-loop-pumped-storage.

53

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESPokhrel, Y., Oki, T. and Kanae, S. (2008), “A grid based assessment of global
theoretical hydropower potential”, Proceedings of Hydraulic Engineering,Vol. 52, pp. 7-12, https://doi.org/10.2208/prohe.52.7.
RE100 (2019), Global Pumped Hydro Energy Storage Atlas, 100% Renewable
Energy Group, Australian National University, Canberra,
http://re100.eng.anu.edu.au/global/.
S&P Global (2022), UDI World Electric Power Plants Database, S&P Global Platts,
London.
Seidel, U., Mende, C., Hübner, B., Weber, W. and Otto, A. (2020),“Dynamic loads in Francis runners and their impact on fatigue life”,
IOP Conference Series: Earth and Environmental Science, Vol. 22,https://doi.org/10.1088/1755-1315/22/3/032054.
TransAlta (2022), “WaterCharger battery storage”, TransAlta, Calgary,
https://transalta.com/plants-operation/watercharger/ (accessed 20 April 2022).
Witt, A., Fernandez-McKeown, A., Mobley, M., DeNeale, S., Bevelhimer,
M. and Smith, B. (2017), “How standard modular hydropower can enhancethe environmental, economic, and social benefits of new small hydropower
development”, Proc. HydroVision International, HydroVision International,
Denver, CO, www.osti.gov/biblio/1461945
World Bank (2020), Evaluation of the World Bank Group’s Support forElectricity Supply from Renewable Energy Resources, 2000–2017,
World Bank Group, Washington, D.C.,
https://ieg.worldbankgroup.org/evaluations/renewable-energy.
Zhou, Y., Hejazi, M., Smith, S., Edmonds, J., Li, H., Clarke, L., Calvina, K.
and Thomson, A. (2015), “A comprehensive view of global potential forhydro-generated electricity”, Energy Environmental Science, Vol. 8/July,
pp. 2622-2633, https://doi.org/10.1039/C5EE00888C.

54

APPENDIX A

LIST OF COUNTRIES,AREAS AND REGIONSSHOWN IN THE FIGURES

AfricaAlgeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cabo Verde, Cameroon,
Central African Republic, Chad, Comoros, Democratic Republic of the Congo,
Congo, Côte d'Ivoire, Djibouti, Egypt, Equatorial Guinea, Eritrea, Eswatini, Ethiopia,
Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libya,
Madagascar, Malawi, Mali, Mauritania, Mauritius, Mayotte, Morocco, Mozambique,
Namibia, Niger, Nigeria, Réunion, Rwanda, Saint Helena, Ascension and Tristan da
Cunha, São Tomé and Príncipe, Senegal, Seychelles, Sierra Leone, Somalia, South
Africa, South Sudan, Sudan, United Republic of Tanzania, Togo, Tunisia, Uganda,
Western Sahara, Zambia.
Asia
Afghanistan, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China,
Hong Kong SAR (China), Macao SAR (China), Chinese Taipei, India, Indonesia, Japan,
Kazakhstan, Democratic People's Republic of Korea, Republic of Korea, Kyrgyzstan,
Lao People's Democratic Republic, Malaysia, Maldives, Mongolia, Myanmar, Nepal,
Pakistan, Philippines, Singapore, Sri Lanka, Tajikistan, Thailand, Timor-Leste,
Turkmenistan, Uzbekistan, Viet Nam.
Central America and the Caribbean
Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bonaire,
Sint Eustatius and Saba, British Virgin Islands, Cayman Islands, Costa Rica, Cuba,
Curacao, Dominica, Dominican Republic, El Salvador, Grenada, Guadeloupe,
Guatemala, Haiti, Honduras, Jamaica, Martinique, Montserrat, Nicaragua, Panama,
Puerto Rico, Saint Barthélemy, Saint Kitts and Nevis, Saint Lucia, Sint Maarten, SaintMartin, Saint Vincent and the Grenadines, Trinidad and Tobago, Turks and Caicos
Islands, United States Virgin Islands.

55

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

Eurasia
Armenia, Azerbaijan, Georgia, Russian Federation, Türkiye.
EuropeAlbania, Andorra, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria,
Croatia, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France,
Germany, Gibraltar, Greece, Holy See, Hungary, Iceland, Ireland, Italy, Kosovo*,
Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Republic of Moldova, Monaco,Montenegro, Netherlands, North Macedonia, Norway, Poland, Portugal, Romania,
San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom,
Ukraine.
Middle East
Bahrain, Islamic Republic of Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman,
Qatar, Saudi Arabia, State of Palestine, Syrian Arab Republic, United Arab Emirates,
Yemen.
North America
Bermuda, Canada, Greenland, Mexico, Saint Pierre and Miquelon, United States.
Oceania
Oceania, American Samoa, Australia, Christmas Island, Cocos (Keeling) Islands,
Cook Islands, Fiji, French Polynesia, Guam, Kiribati, Marshall Islands, Federated
States of Micronesia, Nauru, New Caledonia, New Zealand, Niue, Norfolk Island,
North Mariana Islands, Palau, Papua New Guinea, Pitcairn, Samoa, Solomon Islands,
Tokelau, Tonga, Tuvalu, Vanuatu, Wallis and Futuna Islands.
South America
Argentina, Plurinational State of Bolivia, Brazil, Chile, Colombia, Ecuador, Falkland
Islands (Malvinas), French Guiana, Guyana, Paraguay, Peru, South Georgia and theS. Sandwich Islands, Suriname, Uruguay, Bolivarian Republic of Venezuela.

Source: UN Standard Country or Area Codes for Statistical Use (M49 List) http://unstats.un.org/unsd/
methods/m49/m49.htm.
Note: (*) Throughout this publication, the designation Kosovo* is without prejudice to positions on
status and in line with the United Nations Security Council Resolution 1244 (1999).

56

APPENDIX BREGIONAL FIGURESAFRICA
Figure B.1 Hydropower capacity and generation in Africa, 2000-2021
40 00035 00030 000MW

25 000
20 000
15 000
10 000
5 000
2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

160 000
140 000
120 000

GWh

100 000
80 00060 00040 000
20 000Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).
57

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure B.2 Hydropower installed capacity in Africa, 2021
0%
12%

24%

14%
11%

34.3 GW

3%4%5%3.2 GW

8%

PSH

8%

5%

6%

7%

Ethiopia

AngolaZambiaMozambique

Ghana

Morocco

7%

86%

Egypt

DR Congo

Sudan

Nigeria

Zimbabwe

Other

South Africa
Morocco

Sudan

Note: GW = gigawatt; PSH = pumped storage hydropower; DR Congo = Democratic Republic of Congo.
Source: IRENA (2022b).

Figure B.3 Hydropower project pipeline in Africa, 2022-2037

16%
3%
4%
4%

60.8 GW

5%5%6%

Ethiopia

6%

DR Congo

Cameroon

49%

PSH

11%
31%

Nigeria

Egypt

ZambiaUnited Republic of Tanzania

Guinea4.9 GW

9%

6%

Mozambique

Angola20%

25%

South Africa
MoroccoSouth Sudan
UgandaOther

Note: GW = gigawatt; PSH = pumped storage hydropower; DR Congo = Democratic Republic of Congo.
Based on: S&P Global (2022).

58

Appendix B

70%

80%
90%
100%

2009

2014

60%

50%

20%

30%
40%

10%

1969

3 500

1964

Figure B.4 Hydropower capacity in Africa by year of commissioning

3 000
2 500

MW

2 000
1 500
1 000

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

59

2019

2004

1999

1994

1989

1984

1979

1974

1959

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

500

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESASIAFigure B.5 Hydropower capacity and generation in Asia, 2000-2021
700 000
600 000
500 000MW

400 000
300 000
200 000
100 000

2014

2015

2016

2017

2018

2019

2020

2021

2013

2014

2015

2016

2017

2018

2019

2013

2012

2012

2006

2005

2011

2005
2004

2010

2004
2003

2009

2003
2002

2008

2002
2001

2007

2001
2000

2000

0

2 000 000
1 800 000
1 600 000
1 400 000
GWh

1 200 000
1 000 000
800 000
600 000
400 000
200 000

Conventional

2011

2010

2009

2008

2007

2006

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

60

Appendix B

Figure B.6 Hydropower installed capacity in Asia, 2021

1% 8%
2% 2%
2%

6%
6%

4%
5%

71.7 GW

522.6 GW

11%

India

Japan

37%

Viet Nam

Pakistan

Lao PDR

Tajikistan

DPR Korea

44%

PSH

64%

China

1%
4% 2%

China

MalaysiaJapan

Republic of Korea

Other

Thailand

India
Chinese Taipei

Philippines

Note: GW = gigawatt; PSH = pumped storage hydropower; Lao PDR = Lao People's Democratic
Republic; DPR Korea = Democratic People's Republic of Korea.
Source: IRENA (2022b).

Figure B.7 Hydropower project pipeline in Asia, 2022-2037

2%
3% 2%

3%
3%
4%
8%

6%
5%

26%

1%
3%
3% 3% 1%

5%311.2 GW

70.8 GW

22%

20%

11%

0%

PSH

57%

India

Japan

12%
India

China

MyanmarLao PDR

Pakistan

Nepal

China

BhutanIndonesia

Philippines

Tajikistan

Kyrgyz Rep.

Nepal

Philippines

Other

Viet Nam
Malaysia

Indonesia
ThailandUzbekistan

Note: GW = gigawatt; PSH = pumped storage hydropower; Lao PDR = Lao People's Democratic
Republic.
Based on: S&P Global (2022).

61

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

50%
60%
70%
80%
90%

100%

2019

40%

2004

30%

10%

35 00020%

Figure B.8 Hydropower capacity in Asia by year of commissioning

30 00025 000MW

20 000
15 000
10 000Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

62

2014

2009

1999

1994

1989

1984

1979

1974

1969

1964

1959

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

5 000

Appendix B

CENTRAL AMERICA AND THE CARIBBEAN
Figure B.9 Hydropower capacity and generation in Central America and the
Caribbean, 2000-2021
9 000
8 000
7 000

MW

6 000
5 000
4 000
3 000
2 000
1 000
2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

35 00030 000GWh

25 000
20 000
15 000
10 0005 000

Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

63

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure B.10 Hydropower installed capacity in Central America and the
Caribbean, 2021

7%

5%
29%

8%

8.3 GW

10%

Costa Rica

Panama19%

22%

GuatemalaHonduras

El Salvador

Other

Dominican Republic

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.11 Hydropower project pipeline in Central America and the
Caribbean, 2022-2037

8%
14%

6%
24%

7.2 GW
16%

16%
16%
Nicaragua

PanamaHonduras

GuatemalaDominican Republic

El Salvador

Note: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

64

Costa Rica

Appendix B

Figure B.12 Hydropower capacity in Central America and the Caribbean by

50%

60%
70%
80%
90%

100%

1999

2004

2019

30%
40%

10%

900

20%

year of commissioning

800
700

MW

600
500
400
300
200

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

65

2014

2009

1994

1989

1984

1979

1974

1969

1964

1959

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

100

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESEURASIA
Figure B.13 Hydropower capacity and generation in Eurasia, 2000-2021
100 000
90 00080 00070 000MW

60 00050 00040 00030 000
20 000
10 000
2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

350 000
300 000

GWh

250 000
200 000
150 000
100 000
50 000Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

66

Appendix B

Figure B.14 Hydropower installed capacity in Eurasia, 2021
1%
4% 2%

35%

1.4 GW

88.6 GW

PSH

58%

100%
Russian Federation
Georgia

Armenia

TürkiyeRussian Federation

Azerbaijan

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.15 Hydropower project pipeline in Eurasia, 2022-2037

12%

1%
1%

3%
25%

21.9 GW

3.3 GW

43%

PSH

43%

TürkiyeGeorgia

72%

Russian Federation
Armenia

TürkiyeAzerbaijan

Russian Federation
Georgia

Note: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

67

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

100%

60%

1989

2019

50%

1984

80%
90%

40%

1979

2009

30%

1974

70%

20%

2004

10%

1964

4 500

1959

Figure B.16 Hydropower capacity in Eurasia by year of commissioning

4 000
3 500

MW

3 000
2 500
2 000
1 500
1 000

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

68

2014

1999

1994

1969

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

500

Appendix B

EUROPE
Figure B.17 Hydropower capacity and generation in Europe, 2000-2021
250 000

200 000MW

150 000

100 000

50 000

2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

700 000
600 000

GWh

500 000
400 000
300 000
200 000
100 000

Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

69

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure B.18 Hydropower installed capacity in Europe, 2021

17%
2%
3%
3%
4%

19%

13%

19%
3%
3%
3%

195.7 GW 12%28.3 GW
PSH

6%

6%

9%

8%

Norway6%France

Italy

SwedenSpain

Austria

Romania
Germany

France10%8%Germany

Switzerland

Portugal

10%

6%

9%

8%

13%

Italy

Austria

Spain
United Kingdom

UkrainePortugal

Switzerland

PolandOther

UkraineLuxembourg

Other

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.19 Hydropower project pipeline in Europe, 2022-2037

13%
3%
3%
3%
4%
4%

9%
4%
4%
5%

17.6 GW

8%
7%

5%

7%

Romania

Albania
NorwayCroatia

UkraineUkraineSpain

Switzerland

Austria

Iceland

PSH

9%

Bosnia and Herzegovina
Montenegro

28.6 GW

Serbia

Italy

PolandOther

Note: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

70

13%

12%

8%

7%

7%

14%

15%

24%

12%

United Kingdom

Austria

Switzerland

Germany

Romania

Portugal

GreeceOther

Appendix B

100%

90%

80%

70%

40%

1969

60%

30%

1964

50%

20%

10%

9 000

1959

Figure B.20 Hydropower capacity in Europe by year of commissioning

8 000
7 000

MW

6 000
5 000
4 000
3 000
2 000

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

71

2019

2014

2009

2004

1999

1994

1989

1984

1979

1974

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

1 000

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESMIDDLE EAST
Figure B.21 Hydropower capacity and generation in the Middle East, 2000-2021
18 000
16 000
14 000MW

12 000
10 000
8 000
6 000
4 000
2 000
2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

30 00025 000GWh

20 000
15 000
10 0005 000

Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

72

Appendix B

Figure B.22 Hydropower installed capacity in the Middle East, 2021

10%
14%

2%

15%

14.5 GW

1.58 GW

19%

PSH

66%

74%

Islamic Republic of Iran

Iraq

Syrian Arab Republic

Other

Islamic Republic of Iran
IsraelIraq

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.23 Hydropower project pipeline in the Middle East, 2022-2037

6% 2%
32%

0.8 GW

5.3 GW

PSH

68%
92%
Islamic Republic of Iran

Iraq

IsraelLebanonNote: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

73

United Arab Emirates

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

80%
90%

100%

2009

2019

40%
60%
70%

10%
20%

1 600

30%

Figure B.24 Hydropower capacity in the Middle East by year of commissioning

1 400
1 200

MW

1 000
800
600
400

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

74

2014

2004

1999

1994

1989

1984

1979

1974

1969

1964

1959

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

200

Appendix B

NORTH AMERICA
Figure B.25 Hydropower capacity and generation in North America, 2000-2021
250 000

200 000MW

150 000

100 000

50 000

2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

800 000
700 000
600 000

GWh

500 000
400 000
300 000
200 000
100 000

Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

75

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure B.26 Hydropower installed capacity in North America, 20211%

7%22.1 GW

175.3 GW 47

PSH

%

46%

99%
United States

CanadaMexicoUnited States

CanadaNote: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.27 Hydropower project pipeline in North America, 2022-2037

5%

16%

17%

22.7 GW

18.1 GW

PSH

67%
95%
CanadaMexicoUnited States

United States

Note: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

76

CanadaAppendix B

100%

80%

1984

90%

70%

40%

1979

30%

1964

50%
60%

20%

1959

10%

10 0001954

Figure B.28 Hydropower capacity in North America by year of commissioning

9 000
8 000
7 000

MW

6 000
5 000
4 000
3 000
2 000

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

77

2019

2014

2009

2004

1999

1994

1989

1974

1969

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

1 000

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESOCEANIA
Figure B.29 Hydropower capacity and generation in Oceania, 2000-2021
15 500
15 00014 500MW

14 00013 500
13 00012 500

2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

12 00050 00045 00040 000GWh

35 00030 00025 000

20 000
15 0005 000

Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

78

Appendix B

Figure B.30 Hydropower installed capacity in Oceania, 2021

1%

13.6 GW

46%

0.8 GW

53%

PSH

100%
Australia

New Zealand

Other

Australia

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.31 Hydropower project pipeline in Oceania, 2022-2037

20%

5 GW

0.3 GW

PSH

80%

New Zealand

100%

Fiji

Australia

Note: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

79

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIES

100%

90%

1989

50%
60%

80%

30%

1969

70%

20%

1964

1979

10%

1959

1 400

1954

Figure B.32 Hydropower capacity in Oceania by year of commissioning

1 200
1 000

MW

800
600
400

Operational

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

80

2019

2014

2009

2004

1999

1994

1984

1974

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

200

Appendix B

SOUTH AMERICA
Figure B.33 Hydropower capacity and generation in South America, 2000-2021
200 000
180 000
160 000
140 000MW

120 000
100 000
80 00060 00040 000
20 000
2019

2020

2021
2019

2014

2013

2018

2013
2012

2018

2012
2011

2017

2011
2010

2017

2010

2016

2009

2009

2016

2008

2008

2015

2007

2007

2006

2003

2003

2006

2002
2002

2005

2001
2001

2004

2000
2000

0

800 000
700 000
600 000

GWh

500 000
400 000
300 000
200 000
100 000

Conventional

2015

2014

2005

2004

0

PSH

Note: GWh = gigawatt hour; MW = megawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

81

THE CHANGING ROLE OF HYDROPOWER: CHALLENGES AND OPPORTUNITIESFigure B.34 Hydropower installed capacity in South America, 2021

4%

0%

3%
3% 1%

1%

7%
7%

1 GW

177.1 GW

9%

PSH

66%
99%
BrazilBolivaran Republic of Venezuela

Colombia
Peru

Argentina
EcuadorArgentina

BrazilColombia

Chile
Other

Note: GW = gigawatt; PSH = pumped storage hydropower.
Source: IRENA (2022b).

Figure B.35 Hydropower project pipeline in South America, 2022-2037

6%

1%
4%

20%

7%

72.8 GW

12%0.3 GW
PSH

18%

15%
17%
BrazilPeru
Ecuador
Chile

100%

Bolivaran Republic of Venezuela
Argentina
Bolivia

Colombia
Other

Note: GW = gigawatt; PSH = pumped storage hydropower.
Based on: S&P Global (2022).

82

Chile

Appendix B

70%

80%

90%

100%

2004

2009

2014

2019

60%

50%

30%
40%

10%

9 000

20%

Figure B.36 Hydropower capacity in South America by year of commissioning

8 000
7 000

MW

6 000
5 000
4 000
3 000
2 000

Operational

1999

1994

1989

1984

1979

1974

1969

1964

1959

1954

1949

1944

1939

1934

1929

1924

1919

1914

1909

1904

1899

N/A

0

1894

1 000

RetiredNote: Data include pumped storage hydropower. Data points with no commissioning date aregrouped under N/A. MW = megawatt; N/A = not available.
Based on: S&P Global (2022).

83

www.irena.org© IRENA 2023