New Development: Meeting the EU’s Renewables Mandate: Opportunity for Small Hydro

The European Union’s mandate that, by 2020, a fifth of all energy consumption in the EU will come from renewable sources provides multiple opportunities for hydropower. For small hydro, in particular, the mandate could result in a 35 percent increase in installed capacity.

By 2020, a fifth of all energy consumption in European Union (EU) member countries must come from renewable sources — hydro, wave, solar, wind, and biomass. This mandate, which EU leaders signed in March 2007, is part of a proposal designed to cut greenhouse gas emissions by 20 percent (compared with 1990 levels). Currently, less than a tenth of the energy consumed in the EU comes from renewable sources.

The European Small Hydropower Association (ESHA) — a non-profit association representing the small hydropower sector — says hydro, as the leading renewable source of electricity generation, has a significant role to play in achieving the 20 percent mandate. ESHA says development of small hydro (less than 10 mw) will be particularly important, given that most of the remaining hydro potential left to be developed in Europe is small sites.

With incentives that provide support for hydro development and timely implementation of the mandate by EU member countries, ESHA estimates that installed small hydro capacity could reach 16,000 mw by 2020 — a more than 4,000 mw increase over current levels. This estimate is based on the European Commission’s target of 14,000 mw by 2010.1

Push for renewable energy

As a step toward fulfilling the mandate, in January 2008, the European Commission, the EU’s executive branch, issued a proposal for a directive providing specific renewable energy targets for each of the 27 EU member countries to reach by 2020. Under the proposed directive, each country must increase its share of renewables by 5.5 percent from 2005 levels. Then, beyond this baseline, additional increases are calculated based on each country’s per capita gross domestic project (GDP). For example, the directive calls for Sweden to increase its share of renewables to 49 percent by 2020, from 40 percent in 2005. On the other end of the scale, Malta is to increase its share to 10 percent in 2020, up from 2005 levels of 1 percent.

The proposed directive, called the Renewable Energy Framework Directive, is being developed through consultation with Parliament, EU member countries, and stakeholders. The directive applies to all EU member countries, listed in Table 1 on page 16.

European Commission President Jose Manuel Barroso called the proposed directive “the right policy framework for transformation to an environment-friendly European economy and for a continuation to lead international action to protect our planet.”

The proposed directive also was welcomed by groups in the energy industry. Arthouros Zervos, president of the European Renewable Energy Council (EREC), said, “The European Commission drafted a coherent proposal addressing all renewable energy sectors. The directive contains the necessary elements which should help meet the 20 percent mandate.” However, Zervos says appropriate actions must be taken in applying the directive to show that “the EU is serious and efficient in guaranteeing affordable and clean energy supply to its citizens.”

Leaders of the EU member countries accepted the mandate that 20 percent of all energy consumption will come from renewable sources, in return for flexibility regarding how each country contributes to the common goal. This approach satisfied countries reliant on nuclear energy (e.g., France) and coal (e.g., Poland), as well as countries with few energy resources (e.g., Cyprus and Malta). The European Commission says that all hydro plants, regardless of size, are eligible for consideration as a source of renewable energy.

Each EU member country must provide a national action plan to the European Commission by March 31, 2010. Each plan must set out the country’s targets for the shares of energy from renewable sources in electricity, transport, and heating and cooling, as well as measures to take to achieve these targets.

To help ensure countries meet their long-term targets, the European Commission proposes a series of interim targets. The targets call for meeting 25 percent of a country’s total goal between 2011 and 2012, 35 percent between 2013 and 2014, 45 percent between 2015 and 2016, and 65 percent between 2017 and 2018. And while only the 2020 target is legally binding, the European Commission has indicated that it could pursue legal action before 2020 in cases where a member country’s progress is so limited that it is clear the final target cannot be reached.

Opportunity for small hydro

The European Commission is calling for a total installed capacity of 14,000 mw of small hydropower by 2010, which would generate 55,000 gigawatt-hours (gwh) each year. This would amount to an increase above current levels of about 20 percent. Extrapolating this goal to 2020, ESHA says installed small hydro capacity could reach 16,000 mw — a 35 percent increase above current levels.

According to EREC, there is significant untapped small hydro potential in the EU. EREC estimates that as much as 47,000 gwh per year of new renewable electricity could be produced if the economically feasible small hydro potential in the EU was developed.

To analyze the current situation in the small hydro sector in the EU, ESHA is coordinating the Small Hydro Energy Efficient Promotion Campaign Action (SHERPA) project. This involves gathering information about:

  • Industrial and technological potential;
  • Institutional arrangements and economic issues;
  • Small hydropower and the environment;
  • Policy instruments supporting small hydropower;
  • Risks; and
  • Market and other barriers.


One of the proposed benefits of the SHERPA project is strengthening market development of small hydro projects in the new member states. Results from the SHERPA work to date indicate that, in the ten new EU member countries and the six candidate countries (Bosnia, Croatia, Herzegovina, Macedonia, Montenegro, and Turkey), Turkey has the largest economically feasible small hydropower potential at about 20,000 gwh per year, followed by Poland and Romania.

For development of the small hydro potential in the EU to occur, there is general agreement that three areas of emphasis are needed:

  • Economic incentives;
  • Integration of the plant with the environment; and
  • Technology advancements.


Economic incentives

Economic incentives put in place in various EU countries over the past decade include quota obligations (which establish the amount of electricity supply that must be produced from renewable sources), green certificates (tradable commodities that represent the environmental value of renewable energy generated), and feed- in tariffs (which obligates regional or national utilities to buy renewable electricity at above-market rates to help the provider cover the costs associated with developing renewable energy sources).

With regard to the effectiveness of these programs, ESHA says experience with the feed-in tariff systems in particular has shown positive results. In terms of market penetration and growth rates, these systems are effective in attracting investment, creating confidence in investors, and reaching national targets for renewable energy production.

ESHA emphasizes that it is important for the proposed directive to enhance flexibility in the market while, at the same time, to safeguard the mechanisms developed by the EU member countries to support renewable development.

Environmental integration

Environmental constraints are one of the biggest barriers to developing small hydro projects in Europe, ESHA says. Small hydro developers must demonstrate that their plants can be integrated into ecosystems with minimal environmental effects. ESHA says it is possible that legislation in place in the EU — such as the Water Framework Directive — could restrict the contribution of small hydro toward meeting the 20 percent renewables goal for 2020. The Water Framework Directive, which came into force in December 2000, is designed to prevent deterioration of aquatic wetlands, promote sustainable use of water, and reduce water pollution. ESHA says the future of small hydropower depends partially on balancing the renewable energy and water framework directives and removing barriers to small hydro development. To overcome these challenges, ESHA is supporting and advocating for policies aimed at improving the public image and acceptance of small hydro.

Click here to enlarge image

One tool hydro project owners can use to prove the sustainability of their facilities is the International Hydropower Association’s (IHA) Sustainability Assessment Protocol. IHA crafted this protocol, released in August 2006, to promote greater consideration of environmental, social, and economic sustainability in the development of new hydro projects and operation of existing hydro facilities. The protocol gives general guidance on sustainability issues that should be considered when assessing new energy supply options. Additional sections of the protocol cover sustainability assessments regarding new hydro projects and operating hydro facilities. The protocol is intended to help decision-makers assess performance against sustainability criteria.

Technology advancements

With regard to technology, the European Commission acknowledges significant advances have been made in hydroelectric equipment in the past decades, with important prospects for future improvements (particularly for very low-head installations). However, the commission says there is a general misperception that hydro is a mature technology with no significant prospects for future development. The commission says this misperception has resulted in slow uptake of new technology advances and inadequate investment in research and development. Consequently, the European Commission is calling for increased and focused research and development geared toward harnessing the potential in low-head sites in the region and improving exploitation of the existing generating base.

From 2000 to 2006, the European Commission and the Swiss Confederation financed a development project for small low-head turbines. This project was led by MHyLab, a Swiss independent laboratory devoted to small hydro. In addition to designing reliable and affordable Kaplan turbines with high performance for heads between 4 and 30 meters, this project has driven the development of a new concept for turbines for heads between 1.5 and 4 meters. This new design, used mainly to rehabilitate mills previously equipped with waterwheels, has the advantage of being easily integrated in the infrastructure (the turbines are set directly on the weir) and to be mass-produced. The first industrial site using this new technology — the 240-kw La Gouille project in France — will be put into operation in September 2008.

Also, in January 2008, ESHA began the Small Hydro Action for the Promotion of Efficient Solutions (SHAPES) project. The goal of this project is to facilitate and strengthen cooperation between small hydropower research and market sectors in the EU. This project, partially funded by the directorate general of research for the European Commission, is scheduled to last for two years. Actions are organized into seven work packages that include identifying research and development programs, training professionals working in the small hydro industry, and developing standardized methodologies for upgrading plants.


The mandate that a fifth of all energy consumption in the EU come from renewable sources by 2020 provides significant impetus to hydro development, particularly small facilities. With specific targets for renewable energy production proposed for each EU member country, each country must set a national action plan that indicates how much of this increase will come from hydro and other renewable sources. The potential is there. For development to occur, hydro proponents say attention is needed to ensure continued economic incentives; to reinforce hydro’s role as a clean, sustainable source of power; and to make further advances in hydro technology.



  1. Energy for the Future: Renewable Sources of Energy, European Commission, Brussels, Belgium, 1997.


This article was compiled by the editorial staff of HRW. Sources of information include the European Small Hydropower Association, European Renewable Energy Council, a presentation by Mavel at the Waterpower XV conference, and HCI Publications’ Internet news service,

© Beyond Small Hydro

The European Union’s mandate that a fifth of all energy consumption must come from renewable energy sources provides multiple opportunities for all hydropower, not just small hydro.

In Europe, there are three areas beyond small hydro that show potential for growth. These are: construction of new medium- and large-sized hydro plants, development of pumped-storage facilities, and rehabilitation of existing plants.

About 40 hydro plants 10 mw or larger are under construction in the EU. For example, Scottish & Southern Energy (SSE) is developing the 100-mw Glendoe station at Loch Ness in Scotland. SSE has identified three other hydro projects in the Scottish Highlands that could be developed. Another example of this type of development is construction of the 80-mw Tsankov Kamak project on the Vacha River in Bulgaria. Natsionalna Elektricheska Kompania EAD is building the project. The facility is expected to begin operation in 2009.

Development of pumped-storage projects is another area that offers opportunities for increasing hydro capacity in Europe. In cases where developers are able to use existing reservoirs (and thus avoid construction of a new dam) and build underground powerhouses, effects on the environment are less than that involved in development of a new traditional hydro facility. In addition, these plants provide backup and firming capacities to ensure grid stability in the presence of other intermittent sources of renewable energy.

Several pumped-storage projects are being built in the EU. The country with the most activity in this area is Austria. Three pumped-storage projects are being built there, including 450-mw Kopswerk II, to be fully operational in June 2008; 70-mw Feldsee, scheduled to begin operating in December 2008; and 480-mw Limberg 2, to begin operating in the fall of 2011.

The opportunity to increase hydro production in the EU is not limited to building new plants. ESHA says about 70 percent of all hydro plants now operating in the EU are more than 40 years old. At this age, many of these plants require rehabilitation to continue operating efficiently. In fact, more than 150 hydro facilities in the EU currently are undergoing rehabilitation.


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