An investment push and policies to support hydropower are needed to meet global net-zero emission targets, according to a new report by the International Energy Agency (IEA) on Wednesday.
The growth of hydropower capacity worldwide is set to slow significantly this decade, putting net-zero emissions targets at risk globally, the IEA’s Hydropower Special Market Report said.
The report, which defines hydropower as the 'forgotten giant' of low-carbon electricity, said hydropower today has a key role in the transition to clean energy both in terms of massive quantities of low-carbon electricity generation and its “unmatched” capabilities for providing flexibility and storage.
The special report, a first study providing global forecasts to 2030 in reservoir, run-of-river and pumped storage facilities, says around half of hydropower’s economically viable potential worldwide is untapped but in emerging and developing economies this potential could reach 60%.
The ability of hydropower plants to ramp electricity generation up or down compared with other power plants such as nuclear, coal and natural gas makes it a sustainable option in integrating greater amounts of wind and solar power, whose output can vary, depending on factors like the weather and the time of day or year.
Although the IEA forecasted growth in global hydropower capacity of 17% from today to 2030, with the addition of 230 gigawatts of capacity, the projected growth is almost 25% slower than hydropower’s expansion over the previous decade.
With this increase, global hydropower capacity is expected to reach 1,557 gigawatts by 2030 with China, India, Turkey and Ethiopia leading the growth.
- Hydropower supplies one-sixth of global electricity generation
To reverse the expected slowdown and address the major challenges, the IEA says the world needs a range of strong policy actions and measures from governments.
These measures include providing long-term visibility on revenues to ensure hydropower projects are economically viable to sufficiently attract investors, while still ensuring robust sustainability standards.
'Hydropower is the forgotten giant of clean electricity and it needs to be put squarely back on the energy and climate agenda if countries are serious about meeting their net zero goals,' Fatih Birol, the IEA’s executive director, was quoted as saying in the report.
He said that hydropower offers valuable scale and flexibility to help electricity systems adjust to shifts in demand and to compensate for fluctuations in supply from other sources like renewables.
'Hydropower’s advantages can make it a natural enabler of secure transitions in many countries as they shift to higher and higher shares of solar and wind provided that hydropower projects are developed in a sustainable and climate-resilient way,' he noted.
According to the report, hydropower has supplied one-sixth of global electricity generation and has become the single largest source of low-carbon electricity.
The share of hydropower in global electricity generation is more than other renewables combined, the report showed.
Electricity generation from hydropower plants increased by 70% over the last 20 years but its share of global electricity supply held steady due to the increases in wind, solar, natural gas and coal.
- More investment push needed
“Nonetheless, hydropower currently meets the majority of electricity demand across 28 different emerging and developing economies, which have a total population of 800 million,” it said in the report.
Between now and 2030, $127 billion, or almost one-quarter of global hydropower investment totaling $540 billion, is set to be spent on modernizing aging plants, mostly in advanced economies, the report said.
However, the report warned that the projected investment falls well short of $300 billion that the report estimates is necessary to modernize all aging hydropower plants worldwide.
Based on today’s policy settings, China is set to remain the single largest hydropower market through 2030, accounting for 40% of global expansion, followed by India.
'However, China’s share of global hydropower additions has been declining due to the decreasing availability of economically attractive sites and growing concerns over social and environmental impacts,' the IEA said.
According to the report, new hydropower projects often face long lead times, lengthy permitting processes, high costs and risks from environmental assessments, and opposition from local communities.
'These pressures result in higher investment risks and financing costs compared with other power generation and storage technologies, thereby discouraging investors,' the IEA said.
The report set out key priorities for governments aiming to speed up hydropower deployment, two of which include locking in long-term pricing structures, and ensuring that hydropower projects adhere to strict guidelines and best practices to minimize sustainability risks and maximize social, economic and environmental advantages.
'If governments address the hurdles to faster deployment appropriately, global hydropower capacity additions could be 40% higher through 2030 by unblocking existing project pipelines,' the report concluded.
By Nuran Erkul Kaya and Gulsen Cagatay
Anadolu Agency
energy@aa.com.tr