Building Small Hydro in Norway

By Torodd Jensen

The number of hydro projects in Norway that are 10 mw or less is increasing, with more than 800 operating and more than 700 being studied. The increase is due, in part, to a five-year plan implemented by the Norwegian government in 2002 to encourage small hydro development. About 4 million new megawatt-hours of clean electricity will be operating by 2010.

In 2002, the Norwegian government set a goal to enhance construction of small hydropower plants in the country. Small hydro is a collective term for all plants with installed capacity 10 mw or less. These plants provide valuable potential for adding to the country’s hydro capacity.

To achieve this goal, the government undertook a comprehensive program that includes: assessing the potential for small hydro development in Norway, investing in research and development to improve technology for sustainable power generation, educating potential developers about the work needed to bring small projects on line, providing economic incentives for small hydro development, and identifying ways to minimize environmental effects.

The results achieved over the past six years include extensive knowledge of the available hydro resource, a build-up in competence among consulting companies and manufacturers, and new technology to improve hydro development. The challenges still to come involve meeting constraints related to increased and variable water flow as a result of climate change and developing small hydro with fewer effects on the environment.

Small hydro development in Norway

In the early years of generating electricity from hydropower in Norway (1920s through 1940s), small plants played a significant role. In 1946, there were about 1,800 hydro plants in operation in the country with a capacity of less than 1 mw. However, with larger plants being more efficient, less costly, and less manpower intensive, many small plants were shut down. By 1990, only about 100 plants of this size were in operation.

Between 1978 and 1982, the Norwegian Water Resources and Energy Directorate (NVE) identified a potential of 10 million megawatt-hours (mwh) of generation from hydro plants between 1 and 10 mw. The sites identified were tested against potential environmental effects, as set forth in the two phases of the Norwegian master plan for hydropower development (carried out between 1982 and 1992). This plan also included medium (10 to 100 mw) and large-scale (greater than 100 mw) hydro and upgrading and enlarging existing plants. This comparison revealed that about 7 million mwh of generation from plants 1 to 10 mw was both economically and environmentally feasible. These projects were earmarked for further detailed studies to determine the possibility of licensing and implementation.

Deregulation of the electricity market in Norway in 1991 allowed third-party access to the grid. Around this time, there was very little construction of new generating capacity for two primary reasons. First, the country had surplus capacity as a result of previous investments in construction of hydro plants. Second, a change in climate increased precipitation into the catchments of existing hydro facilities, thus increasing capacity by about 5 percent.

From 1990 to 2000, the Norwegian government financed two major hydro research and development programs, resulting in improved technology and market efficiency. In addition, improved technologies developed for larger plants were scaled down to meet the needs of small plants. Examples include the X-blade technology for Francis turbines and an improved runner for a Pelton turbine. To put this new technology into practical use for both small and large plants, a 250 million NOK (US$46 million) program for constructing pilot schemes was implemented from 1990 to 1995.

Construction of small hydro plants in Norway is increasing. The Norwegian Water Resources and Energy Directorate receives approximately three times the number of applications it can process each year.
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Around 2000, many political parties questioned further hydropower development in the country because of environmental effects, pressure from non-governmental organizations, and arguments that the country would have a surplus of electric power if investments in energy efficiency schemes were prioritized in public budgets. However, the parties highlighted the upgrading and enlarging of existing large plants and the development of new small hydropower plants as environmental friendly and renewable technologies.

Steps to foster small hydro development

In 2002, the Ministry of Petroleum and Energy assigned NVE the task of implementing a national program to enhance small hydro development. Goals of the program included: improving technology and environmental competence through research and development; increasing small hydropower deployment by educating financial institutions and farmers; improving the power balance by adding sustainable renewable electricity generation from environmentally friendly schemes; and enhancing development of local workshops and contractors for manufacturing and later maintenance work.

Other objectives included:

  • Improve licensing procedures;
  • Reduce taxes;
  • Investigate an electricity certificate market or other support systems;
  • Develop planning, financing, licensing, building, and operation guidebooks;
  • Build pilot projects in selected municipalities;
  • Offer training courses for competence building; and
  • Foster research and development in new technology, environment, and hydrology to implement cheaper, higher-quality projects.

Identifying the potential

To fully understand the potential for small hydro (50 kw to 10 mw), between 2002 and 2004 NVE developed a new method for resource mapping using geographic information system (GIS) technology. The method involved identifying waterfalls with a potential for hydro development, then adding available hydrological data and cost figures for intakes, waterways, and power stations. Certain limitations were set with regard to river slope, elevation, runoff volume, maximum usable flow, installed power, and production. The plant design was fixed automatically as soon as head and flow was known, and the power output and generation capacity was automatically calculated.

More than 4,000 potential schemes were identified in water courses that are not protected and at sites where they do not pose barriers to previous identified potential for small hydro and larger projects. The GIS study identified 18 million mwh of potential. If these sites are developed, together with previously known sites from the master plan, the result from small hydro would be about 25 million mwh. The investment would be less than NOK 3 per kwh at 2005 prices (US$0.55) (total investment divided by mean annual generation capacity). Generation cost – reflecting repayment of loans over 40 years (at an interest rate of 6.5 percent), taxes, and operation cost – would be about NOK 0.30 (US$0.06) per kwh or less, with some examples as low as NOK 0.10 (US$0.02) per kwh. Another 7 million mwh could be developed if the generation cost is increased to NOK 0.50 (US$0.09) per kwh.

A second generation version of the methodology is now ready for use that deals with some of the weaknesses of the earlier method. These include: possible mistakes in the data used to build the terrain model, lack of high-quality data on distribution lines, difficulties in assessing the correct cost for access roads, inability of the model to include specific local conditions, and a conservative cost estimate that makes the cost figures too high. The new pictures of potential likely will be available in 2009.

Investment in R&D

To enhance the planning, construction, and operation of small hydro facilities, 65 research and development projects are either completed or ongoing. This includes 24 projects related to technology, 17 on information/training, seven on resource mapping, six on environment, six on hydrology, and five on upgrading and refurbishment.

About 250 new small hydro plants began operating in Norway since 2002, when the government implemented a multi-faceted plan to foster development.
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One project was to establish a neutral control center for mechanical equipment at the Technical University in Trondheim, to allow producers to test and develop turbine equipment. Because the quality of products has been extremely variable, the customer could ask for such a test before purchasing. Many workshops also have used this as an opportunity to improve their products, by cooperating with the researchers at the university. Examples of results are a new Francis turbine for low-head applications and a micro-Pelton turbine with a hard plastic runner.

Another ongoing project is to develop new technology for rock drilling to avoid dangerous and visible (i.e., non-aesthetic) penstocks in the landscape. Some of the biggest hydro companies have joined forces with small developers to move North Sea drilling technology onto land, to reduce the cost and environmental effects compared to conventional technology. The Norhard company (Norwegian Hard Rock Drilling) has been formed and drilled a pilot project 100 meters in length and 700 millimeters in diameter in the winter of 2007-2008. The company will drill another pilot project in the fall of 2008 1 kilometer in length and 1,300 millimeters in diameter.

Information sharing with developers

Educating developers is an important aspect of the effort to improve small hydro development in Norway. The focus for small hydro development is on the small owner because the land and rivers ideal for this type of development usually are owned by small farmers. However, larger energy firms also have found small hydro interesting for investment, and they are growing in number.

The extra income possible from a small hydro plant can be important for landowners and farmers in rural Norway who are struggling with the growing competition for farm products. To help educate developers, NVE produced a guidebook intended for inexperienced hydro developers. The book takes them through all stages of hydro project development, from the initial planning process, through licensing, financing, construction, and into operation.

To provide additional information and to help stakeholders meet others with the same opportunities and challenges, NVE arranged 25 one-day seminars from 2004 to 2006. These seminars highlighted important issues for small hydro developers, such as: how to use information related to small hydro that is available on the NVE website, basic understanding of hydrology, the licensing process, construction of intakes and waterways, the choice of electrical and mechanical equipment, and how to operate the plant in Norway’s electricity market.

Another avenue to receive support and information vital for small hydro development is the Norwegian Association for Small Hydro. This association was established in 2001 by small hydro project owners, with support from NVE. The association organizes training courses, as well as an annual conference that attracts about 500 participants. The small hydro association also carries out research and development projects, in partnership with NVE and commercial companies.

Economic incentives

Since 2002, NVE has received about 35 million NOK (US$6.4 million) from the government of Norway to support research and development projects and to provide training and design activities to interest more university students in all disciplines necessary for hydro development. To foster small hydro development, the government has increased the capacity for hydro licensing by NVE and given NVE responsibility for granting licenses for projects up to 10 mw.

A new support system was to be introduced in Norway for renewable energy. Under this system, small hydropower would receive 0.04 NOK per kwh of registered generation for 15 years, but only for the first 3 mw. However, the government of Norway decided to re-open talks with the government of Sweden regarding a common certificate market. Results of these talks will determine if, and when, a separate system is implemented in Norway. Because of this limitation, the price in the market will be most important for calculations of economic viability in the foreseeable future. This price is expected to be higher than 0.3 NOK per kwh and can be considerably higher depending on market prices for carbon emission reductions.

Recognizing environmental concerns

The interest in building small hydro in Norway is high. The ministry has delegated to NVE the authority to license small hydro. To make the process effective and accurate, NVE has focused on new routines and strives to improve the quality of applications received. NVE is training consultant and owners of small hydro projects to produce all information needed for NVE to undertake a smooth licensing process, as well as holding evening meetings close to the project site to inform affected people and municipalities about the proposed activity and specify the time period for their comments.

In 2007, the Norwegian Water Resources and Energy Directorate awarded licenses for development of 43 small hydro facilities, which will add 511,000 megawatt- hours of electricity and offset 409,000 tons of carbon dioxide emissions each year.
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Through these efforts, the licensing process has become more efficient. However, the licensing process can last about a year, and as long as three years in special cases when local resistance is strong, environmental effects are severe, or projects compete with other projects for water. This is also due to the large numbers of applications. Currently, NVE has the capacity to process 50 to 100 applications per year but is receiving about 300.

Environmental questions are an important part of licensing work. One goal of the small hydro development program is to improve the power balance in Norway. Where it is possible, the environmental effects from several small vs. one large scheme producing the same amount of energy should be compared. A highly relevant question is how to compare these environmental effects. This will be an important issue for NVE’s R&D work in 2008 and 2009, which will include development of a methodology for life cycle assessment.

What the future holds

After five years of implementing this strategy, the number of small hydro plants in operation in Norway has increased by about 250 projects. Total small hydro in operation is about 800 projects, with 368 with installed capacity of more than 1 mw.

The new focus on climate change, along with rising electricity prices, is enhancing more hydro development than we anticipated a couple of years ago. However, the number of projects built by 2010 probably will exceed those built from 2010 to 2020 because of increasing resistance from municipalities and non-governmental organizations. Up to 10 million mwh of electricity from new small hydro plants could be expected in 2020, compared with the situation in 2002. In addition, compared with importing electricity produced from thermal sources (mainly coal), Norway will reduce carbon dioxide emissions by about 4 million tons per year for every 5 million mwh of generation from small hydro plants.


The political parties continue to favor small hydropower development. The government has decided that each county can develop its own master plan for small hydro development. This plan will include identifying areas for small hydro development outside protected rivers and mapping out areas where conflict may exist with regard to small hydro development (such as landscape, natural environment, cultural monuments, and outdoor life). This work began in 2007.

NVE has supported a few municipalities in their work to complete a strategy plan for hydro development that does not unduly encroach on the environment. These plans also include provisions for the involvement of local firms in manufacturing, contracting, and maintenance.


Conflict exists regarding the decision to develop either many small hydropower schemes in a water course or one large scheme. This is a particular issue in cases where an existing hydro station with available reservoir capacity could be enlarged by diverting more water from nearby rivers, but plans exist to develop small hydro plants on these rivers. NVE faces the task of determining the best use of this resource.

Climate change is anticipated to result in more torrential rain in Norway. Plants with available reservoir capacity will be the winners. However, increased average runoff does not automatically increase production because there also may be more frequent floods and dry periods. For example, precipitation can increase up to 40 percent on the west coast, but run-of-river plants could see reduced production because of small intakes and turbines with unfavorable efficiency and capacity curves. Pelton turbines are flexible, but most turbines in power plants in Norway are of the Francis type. To address this challenge, a project to raise turbine efficiency at very variable flows is being discussed with researchers at the University in Trondheim and the power industry.

NVE also does not have the personnel needed to meet the flow of new applications. A few years ago, NVE granted ten to 20 licenses. In 2007, the result was 70 licenses. The stream of applications outnumbers the capacity.

Mr. Jensen may be reached at Norwegian Water and Energy Directorate, Middelthunsgate 29, P.O. Box 5091 Majorstua, Oslo N-0301 Norway; (47) 22-959595; E-mail:

Torodd Jensen is manager of the energy resource section of the Norwegian Water and Energy Directorate.

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