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“The Forgotten Giant” - Climate and the Future of Hydropower

Dernière mise à jour : 23 mai 2022

Hydropower harnesses the fierce forces of nature - turning kinetic energy from falling water into mechanical energy then into electricity. It is being called upon as a fundamental ingredient for decarbonizing the energy systems globally. During the recent COP26 summit in late 2022, world leaders were urged to accelerate the development of this “forgotten Giant”.

Despite hydro having a smaller share in total future renewable capacity compared to its solar and wind counterparts, being flexible and storable means it actively contributes to the overall quality of the electric supply. Hydropower can help fight climate change, but will climate change help or hinder hydropower from sustaining?

In this article, PIA explores:

1) The effects of climate change on hydropower potential

2) Why we need hydropower to achieve the energy transition

3) Where we can develop more hydro

1) The effect of climate change on hydropower

Like many other types of infrastructure, hydropower is starting to experience negative impacts of climate change, water availability, hydrological patterns and extreme weather events are major concerns. The increased temperatures lead to intensification of water cycles on a planetary scale. Generally dry areas will get dryer and wet areas wetter. The most robust large-scale results of climate model projections indicate an increase in precipitation in the tropics, a decrease in the subtropics, and an increase in mid to high latitudes [1].

1. Dry areas getting drier

Droughts reduce water availability and therefore the amount of the produced energy, but in the case of a longer lasting droughts (several years) not only the discharge, but also the available head for energy production can be reduced.

The higher than historical averages temperatures we are experiencing today are already slowing down hydropower generation. In 2021 severe drought conditions in Brazil, the United States, China and Turkey limited global hydropower generation [2]. A report from the Energy Information Administration found that the severe droughts declined hydropower generation by nearly 14 percent in 2021 compared to 2020. Hydropower plants are paralyzed by these enduring dry conditions, such as the Hoover Dam in the USA, which decreased generating capacity by 25% in 2021 [3]. The current climate conditions also induced water stresses in Tajikistan and Kyrgyzstan, resulting in both countries having to either use or import more fossil fuels to support demand.

Consequently, the downturns in hydropower production caused electricity prices to soar in 2021. For example within three months alone, California experienced price hikes of 150% [4]. In these situations, the winners who pick up the checks, are the natural gas companies. As the roles played within the electricity grid between hydropower and natural gas are substitutable, due to being used to quickly supplement the grid with their flexible reserves.

2. Wet areas get wetter

Increased water into the water cycle will come from precipitation and glacial melt. The heightened variability of precipitation will result in more severe and frequent floods and alter the timing of traditional rainy and peak snowmelt seasons. At the same time, heavy water flux will cause erosion from stronger sediment and debris flow. This can block or damage hydro dam components, such as spillways [5].

An increase of the run-off flows will not automatically result in an increase of energy production. Hydropower plants are optimized for the designed discharge, so an increase can only be used to a limited extend.

Fig 1. Dominant effects of climate change on global hydropower

The fluctuations highlight the ways in which extremes, brought about by climate change, are stressing human infrastructure and creating added challenges when it comes to phasing out fossil fuels.

3. So overall, too wet or too dry ?

At first glance, increased global precipitation would appear to suggest more water availability for hydropower production. But since higher temperatures will lead to increased evapotranspiration levels, the current long term consensus suggests a global reduction in river runoff, with ramifications for the provision of hydroelectric power [6]. But It’s not only the hydropower plants which will be affected. Water shortages could also reduce output from thermal power plants using freshwater cooling. Around one third of existing thermal and nuclear power plants using freshwater cooling are located in high water stress areas [7]. Therefore in the long term, climate change will burden not only hydro, but also other power producers as well.

Another pressing issue for the future of Hydro, in light of climate change, will be centered around competition of water sources to supply the increasing population. With fresh water aqueducts drying up at alarming rates, multipurpose reservoirs are likely to prioritize drinking water or agricultural irrigation instead of energy production.

The long term ramifications of climate change on water supply, should not cloud the stark reality that more energy sources are needed to support growing energy demands - the EIA predicts a 47% increase in energy demand by 2050.

Today there still an exceptional potential of hydro capacity which can provide power and help slow climate change.

2) Why do we need hydropower to achieve the energy transition?

1. Hydropower contributes to the resilience of electricity systems

Hydropower plants are key to the energy transition because they bring valuable flexibility and security to the electricity system – coined “ancillary services”. With Hydro’s ability to supply large amounts of low-carbon electricity on demand, it supports the expansion of more intermittent clean energy sources such as solar and wind energy. IEA’s Special Market Report on Hydropower [10] in 2021 highlighted that:

“the flexibility and storage capabilities of reservoir plants and pumped storage hydropower facilities are unmatched by any other technology…& hydropower plants account for almost 30% of the world’s capacity for flexible electricity supply”.

Hydropower has the ability to respond to sudden fluctuations in electricity demand at low costs. When demand exceeds electricity generation and electricity has a high value, water is released to flow back from the upper reservoir through turbines to generate electricity. Hydro is the ideal adjustment lever in the face of sudden variations in consumption and ensures the resilience of electricity markets. It is also one of the lowest cost source of electricity globally, at 0.044 USD/kWh. According to IRENA (2020) it is considered the most competitive renewable technology without financial support.

2. The place of hydropower in energy scenarios

According to the IEA, the short term global hydropower capacity is set to increase by 17%, or 230 GW, between 2021 and 2030. In its flagship report [8], the IEA insists on the need to push for clean electrification and roll-out a huge build of hydropower infrastructures over the next decades.

In each climate scenario, hydropower generation and capacity increases. This rise is all the more important in the Net Zero Emissions by 2050 Scenario, where hydropower maintains a 3% average annual generation growth rate between 2020 and 2030 to provide 5 870 TWh of electricity per year. To meet this level, an average 48 GW of new capacity should be connected to the grid annually during this period. Significantly sustained efforts are needed to achieve such strong capacity growth.

Fig 2. Projected hydropower capacity needs under different climate scenarios

Source: IEA World Energy Outlook Data, in-house analysis & graph

3) Where can we develop more hydro?

Whilst we still have the opportunity to change the path of climate change, we must harness and develop the existing hydro potential, as available.

Globally, around half of hydropower’s economically viable potential is untapped. The potential is particularly high in emerging economies and developing economies, reaching almost 60%. – IEA


Is poised for an explosion of hydropower growth. It has thousands of miles of waterways and enormous untapped potential, reports indicate that Africa is only using 5% to 10% of its hydropower opportunity [9]. Sub-Saharan Africa is set to add over 19 GW of new hydropower capacity, making it the third largest market for new capacity until 2030 [10]. Small hydropower plants are the holistic solution to Africa’s generation capacity gaps, as there are upwards of 30+ reservoirs with <= 0.5 GWh of energy production potential. Beyond the Nile, there is huge hydropower potential in other major waterways, including the Congo, Niger, Orange and Senegal rivers. The four primary countries contributing the most to Africa’s hydro output are firstly Ethiopia (totaling 6 GW of addition), then Tanzania, Nigeria and Angola (cumulating to 5.5 GW). The countries that enable IPPs to develop have a much larger amount of small hydropower instillations planned such as Cameroon, Kenya and Uganda.

The largest barrier of development at present is the lack of appeal in investment. Africa attracts less than 5% of global foreign direct investments.

Central Asia

Central Asian countries have more than 75 per cent of potential hydropower capacity that could still be developed (IHA, 2020). Tajikistan in particular has tremendous room for expanding hydropower, with only 5% of technically feasible potential having been exploited to date. Kazakhstan and Kyrgyzstan use only 13% and 15% of their potential whereas Uzbekistan already exploits 40% of its technically feasible potential. Tajikistan’s National Development Strategy has set a goal to more than triple electricity exports to at least 10 TWh annually by 2030 – equivalent to about half the amount of electricity it generates today.

The biggest obstacle remains in finding funding to finalize projects and landing on a better approach to balance the regional energy markets.


Potential in Europe has been largely exploited, but Europe’s hydropower is set to increase by 8% (+18 GW) over 2021- 2030. Growth is led by reservoir installations almost exclusively from greenfield projects in Turkey, which account for over 70% of Europe’s reservoir expansion [11]. Future greenfield hydro volume is expected to come from smaller run-of-river projects in Norway and small Feed-in-tariff installations in Italy, Austria and Poland. In reality, the remaining sites are untapped due to a lack of technologies that achieve a reasonable installed cost.

The low investment levels in hydro are attributed to low electricity prices on the European spot market. Cost of CO2 certificates are low and subsidies are disproportionally given to solar and wind projects [12].


Has the richest hydropower resources .The total theoretical hydropower potential of China is 694 GW, about a 15% global share, and ranking first in the world. The technical exploitable installed capacity is 542 GW, a 17% global share. [13].

In a nutshell

1. Results from robust climate scenarios indicate the need to better plan for a resilient future – change in water patterns will lead to higher competition on water resources and overall lower output from existing hydropower assets as well as from existing nuclear and thermal assets who need scarce fresh water for cooling.

2. Hydropower is an ally of the energy transition because it provides economically viable power in a flexible and controllable manner. In order to enable the green transition, leveraging solar and wind, more hydro will be needed to provide reliance to the system.

3. There is over 600,000 potential hydropower plants worldwide to harness, with impressive potential in sub-Saharan Africa and Central Asia. The largest hindrance today is the lack of investments. The IMF pointed that funds dedicated to energy transition are sad - barely 2% of public spending [14], therefore a large mobilization of private financing is needed to achieve net-zero goals. When doing, let us keep our “forgotten giant” top of mind.


[9] Sirte, L.A.J., “Hydropower Resource Assessment of Africa,” Ministerial Conference on Water for Agriculture and Energy in Africa: The Challenges of Climate Change, December 2008

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