Hydropower capacity, including pumped storage hydropower (PSH), should more than double by 2050 if the world is to decarbonise and meet the climate goals set in the Paris agreement, a new report by the International Renewable Energy Agency (Irena) has found.
Annual investment in hydropower should grow fivefold during the period to reach the target, the report said.
This translates to $85 billion per year in investment in conventional hydropower and $8.8 billion in PSH, which is more than three times the investment in hydropower in 2017 and more than five times 2018's figure.
Hydropower is an important component of power systems worldwide and is the largest source of renewable electricity.
“Most hydropower potential lies in developing countries,” the report said.
“Financing institutions need to work together with governments to overcome local risks and limitations, find common ground and start funnelling much-needed investment into these regions and countries.”
The majority of the world’s hydropower capacity is in Asia, accounting for 42 per cent, followed by Europe, North America, South America, Eurasia and the rest of the world.
China is the largest producer of hydropower with 1.3 petawatt hours per year of capacity, followed by Brazil, Canada and the US.
Investment in hydropower has been dwarfed by investment in solar PV and wind technology, despite it being one of the cheapest sources of renewable electricity, over the past decade, the report said.
Renewable energy attracted $1.8 trillion between 2013 and 2018 but only $72 billion was invested in hydropower, which is equivalent to 4 per cent of all investment in renewable energy.
This is a “relatively small amount, especially when considering that it is a mature technology that generates around 65 per cent of all renewable electricity”, the report said.
It added that the world’s hydropower fleet was ageing and would need refurbishment.
“This need presents an opportunity to introduce new technologies and to modernise plants to fit the requirements of today’s power systems,” Irena said.
Existing plants will have to be assessed and retrofitted where necessary to account for increased climate risks and new projects will need to incorporate these risks in their design, it added.
“Hydropower has been an effective source of clean power generation for more than a century,” said Irena director general Francesco La Camera.
“However, with the rapidly evolving energy landscape, it is important to re-evaluate its future role and leverage recent technological advancements that can maximise its potential while ensuring its sustainability and climate resilience.”
