IEA sees hydropower as "forgotten giant of clean electricity"

The International Energy Agency has called for ramp-up in investment and policy support for hydropower, which it described as the "forgotten giant" of low-carbon electricity.

In its new Hydropower Special Market Report, published on June 30, the Paris-based agency said global hydroelectric capacity was set to rise by 17% between 2021 and 2030, but this rate of growth is 25% less than was achieved in the 2010s.

"Reversing the expected slowdown will require a range of strong policy actions from governments to address the major challenges that are hampering faster deployment of hydropower," the IEA said. "These measures include providing long-term visibility on revenues to ensure hydropower projects are economically viable and sufficiently attractive to investors, while still ensuring robust sustainability standards."

Hydropower today accounts for one-sixth of global electricity generation, making it the world's top source of low-carbon power with a larger share than all other renewables put together.

"Hydro 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," the IEA's executive director, Fatih Birol, commented. "It brings valuable scale and flexibility to help electricity systems adjust quickly to shifts in demand and to compensate for fluctuations in supply from other sources."

The report comes days after China started commissioning the first two 1-GW turbines at the massive Baihetan hydropower plant on the upstream branch of the Yangtze river. It will feature 16 such units at full capacity. China will remain the single largest hydropower market through to 2030, accounting for 40% of the global expansion by then, according to the IEA, followed by India.

Hydropower can offer abundant low-cost energy, but heavy reliance on hydroelectric dams leaves a country exposed to power shortages in periods of drought. Additionally, Greenpeace and other activist groups have often criticised their environmental impact. Greenpeace was also among the non-governmental organisations that praised the IEA' s recent Net Zero by 2050 report, which called for an end to investment in oil and gas as the world pushes towards net-zero emissions by 2050. That same report also said investment in hydropower would need to increase significantly, and that in a net-zero scenario, hydroelectricity would be the third biggest energy source in three decades' time.

The IEA noted that while hydropower was economically attractive in many regions, its challenges include long lead times for projects, lengthy permitting processes, high costs and risks from environmental assessments, and opposition from local communities. All these factors discourage investors. The IEA advised governments to lock in long-term pricing structures and ensure hydropower plants adhere to strict guidelines and best practices.

Global hydropower capacity will need to expand twice as quickly through 2030 in order to follow the trajectory outlined in the IEA's Net Zero by 2050 report, the agency said.