| Sustainable development
Still, the projected investment falls well short of the US$300 billion that the report estimates is necessary to modernise all ageing hydropower plants worldwide. While hydropower remains economically attractive in many regions of the world, the report highlights a number of major challenges it faces. 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. To help accelerate the deployment of hydropower in a sustainable way, the IEA report sets out seven key priorities for governments. These are: 1) Move hydropower up the energy and climate policy agenda.
2) Enforce robust sustainability standards for all hydropower development with streamlined rules and regulations.
3) Recognise the critical role of hydropower for electricity security and reflect its value through remuneration mechanisms.
4) Maximise the flexibility capabilities of existing hydropower plants through measures to incentivise their modernisation.
5) Support the expansion of pumped storage hydropower.
6) Mobilise affordable financing for sustainable hydropower development in developing economies.
7) Take steps to ensure to price in the value of the multiple public benefits provided by hydropower plants.
If governments address the hurdles to faster deployment appropriately, global hydropower capacity additions could be 40% higher through to 2030 by unblocking existing project pipelines, according to the accelerated case presented in the report. However, to put the world on a pathway to net- zero emissions by 2050, as set out in the IEA’s recent Global Roadmap to Net Zero by 2050, governments would need to raise their hydropower ambitions drastically. In fact, global hydropower capacity would need to grow twice as fast through to 2030 as it is expected to do in the report’s main forecast. The IEA said that a much stronger and all-encompassing policy approach would be required to achieve this. In addition, all efforts to accelerate deployment would still need to be carried out in a manner that maintains high sustainability standards.
Industry response Responding to the report, Eddie Rich, Chief Executive
of the International Hydropower Association, said: “The world is facing a crisis in energy flexibility and storage. If we are to get the most from wind and solar, governments need to incentivise investment in sustainable hydropower to balance up the system when the wind doesn’t blow and the sun doesn’t shine. Policy-makers have a huge opportunity to correct this through holistic post-Covid development plans. At the same time,” Rich added, “the hydropower sector also needs to step up. Developers have no excuse for projects not to be in line with international good practice.”
Hydro Tasmania also welcomed the report. Chief Executive Officer Evangelista Albertini said it underscored the critical role for the flexible, dispatchable capacity that can be delivered through Hydro Tasmania’s Battery of the Nation hydropower projects.
“I am very pleased to see international recognition
of hydropower as the ‘workhorse’ of the future in providing the capacity and storage needed to ensure stable and reliable global energy systems,” he commented. “It is pleasing that the IEA has reinforced the reform needed to ensure the growth of hydropower projects can be accelerated. Better valuing the system services hydropower and pumped hydro can provide, more certainty on future revenues and incentivising investment – both in new projects and asset modernisation – are key to this and recognised in the IEA’s seven priority areas.” Albertini said that the Battery of the Nation and the new 1500MW Marinus Link interconnector together can support the nation’s transition to a clean energy future by providing cost-effective, dispatchable, highly flexible renewable energy, backed by deep hydropower storage capacity. “Hydro Tasmania is in a great place to respond to the future capacity and storage needs of the national electricity market with the biggest hydropower system in the country,” he said. “Combining our significant hydropower and pumped hydro capacity with low cost wind and solar gives Tasmania a strong competitive advantage to deliver what the nation needs.” ●
Above: The International Energy Agency has said previously that the voice of hydropower was not being heard loudly enough
Speaking up for hydro
Dr Fatih Birol, Executive Director of the International Energy Agency, wrote in the foreward to the Hydropower Special Market Report: “A little over two years ago, at the 7th World Hydropower Congress in Paris, I underscored the huge untapped potential of hydropower – the world’s largest source of clean and flexible electricity generation – particularly in emerging and developing economies. I said then that the voice of hydropower was not being heard loudly enough, and I promised that the IEA would be a strong voice for the hydropower community, notably by making hydropower the focus of our Renewables 2020 market report. “We did not know then that a global pandemic in early 2020 would deliver a shock of historic proportions to our societies and economies. Today, I’m proud that despite the disruptions we faced in 2020, we are now delivering on our promise of two years ago with this Hydropower Special Market Report. “ The full report can be read at be
https://www.iea.org/reports/hydropower-special- market-report
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