All Eyes on Hydropower

With the legislative framework and public sentiment leaning heavily toward renewable generation around the world, hydropower continues to be a valuable commodity. Data pulled from a number of recent studies shows its growth and provides hints as to where it is going. 

By Michael Harris

While the world’s energy sector has been moving toward renewable and other low-carbon forms of power generation for decades, the enactment of the Paris Accord in November 2016 validated this transformation by establishing a global target for reducing greenhouse gas emissions.

Even with the Paris Accord having been ratified, however, uncertainties regarding the actuality of its implementation still abound – so much so that the International Energy Agency says “no path of development of the global energy system can be confidently drawn to 2040.”

Regardless, IEA has established three sets of criteria in its most recent World Energy Outlook report that, despite a number of unknowns, attempt to determine pathways to limiting global warming to below 2 degrees Celsius.

The scenarios

IEA’s report sets forth three possible scenarios for global growth in renewable generation, including hydro. They are:

New Policies Scenario

This scenario is based on a detailed review of policy announcements and plans and reflects the way governments – both individually and collectively – envision their energy sectors developing in the coming decades. According to IEA’s report, the New Policies Scenario uses a baseline of policies that are already in place, “but it also takes into account, in full or in part, the aims, targets and intentions that have been announced, even if these have yet to be enshrined in legislation or the means for their implementation are still taking shape.”

Current Policies Scenario

This scenario removes the implementation of new policies and measures beyond those “already supported by specific implementing measures” that were in place at the time of the World Energy Outlook’s publication in late 2016. It does, however, assume any policies that might lapse would be renewed and continued at a comparable level of intensity through 2040.

Based on IEA data from World Energy Outlook 2016 © OECD/IEA 2017, www.iea.org/statistics, License: www.iea.org; as modified by PennWell
Based on IEA data from World Energy Outlook 2016 © OECD/IEA 2017, www.iea.org/statistics, License: www.iea.org; as modified by PennWell

450 Scenario

This scenario, introduced in 2008, was so named because it sets a path to limiting the concentration of greenhouse gasses in the atmosphere to about 450 parts per million of carbon dioxide equivalent.

Forecasting for renewables at-large

In its study, IEA uses the New Policies Scenario as its primary focus, given it most accurately forecasts trends based on tangible, real-world data and relatively conservative expectations for future energy legislation.

Still, under the New Policies Scenario, IEA expects nearly 60% of all new power generation capacity to come from renewables by 2040, helping to meet a rise in global energy demand of 30%. This equates to a cumulative US$44 trillion in investments – 60% of which would still go toward fossil fuel extraction and supply, 20% to renewables and the remainder to efficiency improvments. Meanwhile, an extra $23 trillion would be required for improvements in energy efficiency to help meet emission reduction targets.

This change won’t come without shifts in legislation, and although IEA’s New Policies Scenario envisions a future in which renewables are competitive without subsidies, the organization says this will require a “careful review of market rules and structures.” Renewable policy is most likely to affect the wind and solar sectors until they reach a share of about 25% in the power mix, according to IEA.

Movement has already begun

Even though the New Policies Scenario anticipates an accelerated rate of renewable development in the near future, recent analysis performed by the United Nations Environment Programme in conjunction with the Frankfurt School’s Collaborating Centre for Climate & Sustainable Energy Finance and Bloomberg New Energy Finance shows the global move toward renewables is already well under way.

The report, titled “Global Trends in Renewable Energy Investment,” notes that private investment into renewables remained strong after a decade through 2016, with financing for green energy outpacing fossil generation for the fifth subsequent year. Excluding large hydro, 138 GW of new renewable capacity came on line in 2016 – or about 11 GW more than the previous year.

Measured in US$ billion  -  Source: Global Trends in Renewable Energy Investment 2017
Measured in US$ billion – Source: Global Trends in Renewable Energy Investment 2017

Also notable were the costs associated with this renewable growth, which totaled about 23% less than in 2015, due in large part to plummeting costs in technology and equipment.

While investments in new renewables in developed countries eclipsed investments in developing countries in 2016, efforts to bring electricity to unpowered regions has remained a driver in global electrification – particularly in off-grid areas.

Hydro by region

According to the World Bank and the International Bank for Reconstruction and Development’s 2017 “Global Tracking Framework: Progress toward Sustainable Energy” report, 85.3% of the world’s population has access to electricity, with regions including Europe, North America and Central Asia boasting near-universal access.

Hydropower remains a valuable commodity even these well-developed areas, however, and is even more so in developing regions.

Highlights from the past year, by world region, include:

Africa

Ethiopia, with an estimated 45,000 MW of hydropower potential, was amongst all world leaders in terms of new hydro commissioned in 2016, with close to 2 GW. Included in that figure is the 1,870-MW Gibe 3 project, although the 1,450-MW Gibe 4, 660-MW Gibe 5 and 6,000-MW Grand Ethiopian Renaissance plants will also all be coming on line in coming years.

South Africa ranked high as one of the continent’s other leaders in new hydro, with Eskom Holdings completing its 1,332-MW Ingula pumped storage plant last January.

Based on IEA data from World Energy Outlook 2016 © OECD/IEA 2017, www.iea.org/statistics, License: www.iea.org; as modified by PennWell
Based on IEA data from World Energy Outlook 2016 © OECD/IEA 2017, www.iea.org/statistics, License: www.iea.org; as modified by PennWell

Asia and Oceana

China on its own outpaced the cumulative added capacity of any other continent in 2016 with 11.7 GW – including 3.7 GW of pumped storage – although the Asian giant slowed from 2015 and 2014, when it added 19.4 GW and 21.9 GW, respectively.

Vietnam and Laos, Asia’s second and third largest gainers, have seen a number of significant projects move forward in the past year. Many international lenders have invested heavily into Vietnam’s small hydro sector in recent months – largely to help support its Power Development Plan 7, while in Laos, the 1,285-MW Xayaburi, 912-MW Pak Beng and 260-MW Don Sahong plants are all now under construction.

Europe

Even though the bulk of Europe’s 1.8 GW of new hydropower installed in 2016 came in the form of pumped storage, which added 1.6 GW, perhaps the continent’s most exciting advances continue to be in the marine energy sector.

With several countries in Europe already laying claim to being the global leaders in the marine energy arena, a number of advances were made in 2016 as the sector continues moving toward widespread commercialization.

Most recently, Atlantis Resources announced in February the first of four 1.5-MW tidal turbines deployed at Scotland’s Meygen test site was exporting power to the grid at full power, while developer Minesto announced its plan to expand the Holyhead Deep array off the coast of Wales from 10 MW to 80 MW.

A number of research and development awards from both governmental and private entities have also been made available over the past year as financiers look to improve the reliability and efficiency of marine generation.

Source: Global Trends in Renewable Energy Investment 2017
Source: Global Trends in Renewable Energy Investment 2017

North America

The United States’ recent elections have called into question hydro’s place in President Donald Trump’s energy policy – and the country’s commitment to the Paris Accord – but a number of policies introduced to Congress this year indicate streamlining the approval process for new projects remains a federal priority.

Of particular significance in the U.S. are American Municipal Power’s Ohio River facilities, which include the 35-MW Willow Island, 72-MW Smithland, 84-MW Cannelton and 105-MW Meldahl facilities. The plants, which began going on line last year, represent the U.S.’ largest new hydropower projects in decades.

In Canada, Innergex Renewable Energy’s 81.4-MW Upper Lillooet River plant began commercial operation in April, while the 23.2-MW Hydro-Canyon Saint-Joachim project did the same in February. Meanwhile, construction continues on Manitoba Hydro’s 695-MW Keeyask and BC Hydro’s 1,100-MW Site C complexes.

Source: IHA 2017 Key Trends in Hydropower
Source: IHA 2017 Key Trends in Hydropower

South America

South American companies added a cumulative 9.7 GW of hydropower to their systems in 2016, with Brazil’s 3.75-GW Jirau and Ecuador’s 1.5-GW Coca Coda Sinclair adding significant chunks.

Hydropower looks to remain a strong presence in South America in coming years as well, with the development of Chile’s 531-MW Alto Maipo, Peru’s 392-MW Huallaga 1, Bolivia’s 280-MW Ivirizu and Brazil’s 8-GW Tapajos all making strides through 2016.

Other trends

As wind, solar and other intermittent forms of generation increase around the world, so too does the need for demand response and energy storage. The advantages for both conventional hydro and pumped storage are then clear, although as the International Hydropower Association notes, climate change is forcing developers to more carefully plan resource management strategies than ever before.

Asset management is also becoming an increasing concern as some estimates place all projects worldwide as reaching the end of their expected lifetimes by 2050. Alongside rehabilitation and modernization efforts are coming digital conversions, which, while offering more efficient means of plant monitoring and optimization, also opens the door for new security risks.

Last, new cross-border, multi-national transmission projects continue to fuel renewable growth. This is already evident in North America, where a number of Canadian utilities export surplus energy to their southern neighbors in the U.S., while proposals like Asia’s “Super Grid” and major regional lines in Africa would also be used to transmit hydroelectric power.

Michael Harris is an editor for Hydro Review.

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