January 12, 2024

Hydropower is one of the oldest, largest, and most reliable sources of renewable energy and is larger than all other renewables combined (wind, solar, bioenergy and geothermal), although it is losing market share as growth in wind and solar generation expands. In fact, of the total global power generation mix, hydropower ranks 3rd largest behind coal and natural gas and accounts for about 15% of the total.

In many developing countries, hydropower plays a critical role in meeting the majority of electricity demand. However, in advanced economies, the share of hydropower has been declining as existing plants age with facilities in North American and Europe approaching 50 years. Since hydropower plants can operate for up to 100 years, these aging plants are now due for expensive, and time consuming modernization and upgrades to ensure their continued contribution to electricity security for decades to come. It has been estimated that to modernize all aging plants on a global scale would require an investment of USD $300 billion by 2030, more than double currently projected expenditures.

There are 3 types of hydro power:

  • Impoundment, the most common type, is a facility that uses a dam to store river water.
  • Diversion, more commonly known as run-of-river, channels a portion of the river using the natural decline of the riverbed.
  • Pumped Storage Hydropower (PSH) acts like a battery as it is designed to store for use during periods of high demand. Essentially, water is pumped from a lower elevation and stored at a higher elevation and released as needed.

Global hydropower capacity has increased steadily each year since 2013, albeit at a relatively slow pace of just over 2% annually. Over the past 10 years, hydro power capacity has grown from just over 1100 GW to about 1400 GW, an increase of 22%. Impoundment and Diversion hydro capacity accounts for about 90% of the total with pumped storage hydropower accounting for the remaining 10%.

Print  CSV  Excel  Copy  Download  

Source: International Renewable Energy Agency (Copyright © IRENA 2023)

In 2022, China was the global leader in hydropower capacity, accounting for 30% of the world’s total capacity at over 400 GW. Following a distant second and third are Brazil and the US at 8% (110 GW) and 7% respectively (105 GW). Canada ranks fourth largest representing about 6% of the global total at just over 80 GW.

At present, there is nearly 600 GW of hydropower projects in various stages of development including about 130 GW currently under construction. The majority of these projects are concentrated in China and other countries where there is a high risk of electricity supply shortages. However, the International Hydropower Association (IHA) suggests this amount falls almost 300 GW short of the necessary measures to limit global warming to 2°C. Further, they noted that annual increases over the past 5 years have averaged about 22 GW, half of the required growth rate of 45 GW per year to achieve the goal of net-zero by 2050. One of the main obstacles impeding the expansion is the substantial capital and operational costs involved. The initial investment for a new hydropower plant is extremely high due to the construction of dams and other essential infrastructure.

Annual growth of hydropower capacity is expected to be rather moderate at about 2% (30-40GW) annually growing from about 1400 GW in 2022 to over 1600 GW by 2030.

Print  CSV  Excel  Copy  Download  

China is expected to retain its position as the leading hydropower market through 2030, accounting for 40% of the global capacity expansion. This is down from their peak in 2001-2010  when they accounted for nearly 60% of all additions. This shift is attributed to mounting environmental concerns and the diminishing availability of economically viable locations for large-scale projects. Nonetheless, China is projected to increase its capacity by 95 GW by 2030, representing a 40% share in the global hydropower capacity. The Asia Pacific region, excluding China, is expected to have a nearly 30% share with an additional 65 GW of new capacity added by 2030.

The forecast also indicates that a substantial 75% of the growth in global hydropower capacity through 2030 will consist primarily of large-scale projects in Asia and Africa. Of note, over 50% of all new hydropower projects in Africa, Southeast Asia, and Latin America are expected to have ties to Chinese firms, whether they are involved in construction, financing, partial financing, or ownership.

References:

  1. The International Renewable Energy Agency (IRENA). (2023, July 6). Renewable Energy Statistics 2023. Available at: https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Mar/IRENA_RE_Capacity_Statistics_2023.pdf?rev=d2949151ee6a4625b65c82881403c2a7
  2. International Hydropower Association (IHA). (2023). 2023 World Hydropower Outlook. Available at: https://indd.adobe.com/view/92d02b04-975f-4556-9cfe-ce90cd2cb0dc