Sopuruchi Onwuka

The global hydropower generation is to hit significant 1,200 gigawatts (GW) for the first time by the end of 2022 when investments in the industry is also expected to reach monumental $36.3 billion, as countries increasingly explore suitable renewable options to decarbonize their energy supply.

Research published by Rystad Energy holds that hydropower industry is experiencing a renaissance and solidifying its position as the most popular renewable energy source as the energy transition gathers pace and countries search for reliable, large-scale infrastructure projects to meet future demand.

However thermal generation fired with oil and gas clearly remains global generation leader, the company stated.

According to the global industry advisory consultancy, hydropower accounts for almost one-sixth of the world’s power generation, trailing only coal and natural gas.

The hydro industry’s contribution to power generation is nearly 60 Percent higher than nuclear energy and greater than all other renewables combined, including wind, solar PV, bioenergy and geothermal.

Rystad stated that power generated through hydropower rose slightly in 2021 to 4,414 terawatt-hours (TWh), up from 4,360 TWh in 2020, while capacity of nearly 17 GW was added in 2020, followed by another 14 GW in 2021.

It added that investments in the sector slowed somewhat before 2020 as other renewable sources such as wind and solar PV gained momentum, a situation exacerbated by delays to several major hydropower projects and some regions’ lack of policy changes, which also stunted growth.

Analyst at Rystad Energy, Karan Satwani, stated: “Hydropower is the backbone of low-carbon electricity generation and has been rising since the 1970s. Over the last two decades, the installed global capacity of hydropower has grown from 680 GW in 2000 to nearly 1,200 GW in 2021, a surge of more than 75 Percent.”

As the global race for power sector decarbonization gathers momentum, China leads with total installed hydropower capacity of over 340 GW, more than triple the capacity of runner-up Brazil with 112 GW.

According to Rystad, the United States holds hydropower capacity of 84 GW, Canada has 81 GW and Russia posts 50 GW in the top-five list for hydropower generation globally.  India comes next with 47 GW, Norway follows with 33 GW, Turkey comes with 30 GW, and Japan holds 23 GW.

In recent years, Asian and South American countries, led by China and Brazil, have driven global capacity additions while other continents have stayed relatively flat, the company stated in the report. It added that combined installed capacity in Asia has risen from 462 GW in 2017 to an expected 514 GW in 2022, whereas total capacity in South America has climbed from 175 GW to an expected 192 GW over the same period.

Rystad pointed out that China’s Baihetan hydropower project, which began operations from two of its 16 units in June 2021, will be able to produce up to 16 GW of energy annually once fully operational later this year.

“This will make it the second biggest hydroelectric project globally, eclipsed only by another Chinese mega-development, the Three Gorges Dam project in Hubei province. The Wudongde hydropower plant, another ambitious Chinese development, began full operations in June last year with an installed capacity of 10.2 GW, making the project the seventh-largest hydropower project worldwide.”

Most of the capacity additions until 2030 are expected to come from large-scale projects in Asia and Africa. In Africa specifically, installed capacity is expected to grow at a combined annual growth rate of 2.5 Percent from 2017 to 2023, driven by Ethiopia, Mozambique and Uganda.

Most of the large-scale projects in Asia and Africa are managed by state-owned companies. We expect a slowdown in the pace of hydropower development in China over the coming years due to growing concerns over environmental impact and the shrinking availability of economically attractive sites for large projects. However, India’s new long-term targets and financial incentives are expected to unlock a large pipeline of previously stalled projects as the government aims to boost hydropower capacity by about 55 Percent this decade and reach 73 GW by 2030. No significant capacity additions are expected in North America and Europe for at least two years. Still, fleet modernization will be a priority in both continents during this decade.

On a regional basis, Sub-Saharan Africa and Asia-Pacific are expected to grow, as untapped potential is being developed to meet rising energy demand, Rystad stated, adding that these regions also need cost-effective power generation to expand electrification.

In posting an outlook, Rystad said a considerable portion of investments will be spent on modernizing aging plants in advanced economies in this decade.

“In addition, significant investments are required for existing infrastructure, including upgrades, replacements and the addition of turbines. Most of the spending on modernization will be in North America, Europe and Eurasia, where most of the world’s aging fleet is located. Investments will be required to restore performance and adapt plants to operating conditions that have changed since the plants were built.

“Overall, the proportion of investments spent on modernizing and maintaining existing hydropower facilities and infrastructure will be significantly higher than spending on the construction of new power plants in younger markets.”