IEA Expects Global Hydropower Capacity to Increase to 230 GW by 2030
India, the second-largest growth market globally, is expected to add 26 GW of hydropower capacity by 2030
Global hydropower capacity is expected to increase by 17%, or 230 GW, in the upcoming decade, the International Energy Agency (IEA) said in a recent report. In 2020, hydropower was the single largest source of low-carbon power as it supplied one-sixth of global power generation.
However, the agency forecasted that the net capacity addition in the upcoming decade would decrease 23% compared to the previous decade due to a slowdown in the development of projects in China, Latin America, and Europe.
The report stated that higher growth in Asia, Africa, and the Middle East markets would partly offset these declines. It added that increasing power demand and export opportunities drive rapid hydropower growth in Southeast Asia and Africa.
The study noted that at the moment, hydropower meets the majority of electricity demand across 28 different emerging and developing economies, which have a total population of 800 million.
According to the report, China will account for 40% of global expansion and remain the largest hydropower market through 2030, followed by India. Chinese firms will either build, finance, partially finance, or own over 50% of all new hydropower projects in Sub-Saharan Africa, Latin America, and Southeast Asia through 2030. However, China’s share is declining in the global hydropower market since its peak of almost 60% between 2001 to 2010.
IEA forecasted that 64 GW of hydropower projects would be added in the Asia-Pacific region, excluding China. Of which, India and Pakistan would account for half of the region’s expansion by 2030. India, with the expected addition of 26 GW capacity, would be responsible for over 40% expansion of the region’s capacity in the upcoming decade. IEA said new long-term targets and financial incentives would help unlock a large pipeline of previously stalled projects in India, the world’s second-largest growth market.
The report stated that hydropower would remain economically attractive in several regions of the world. However, the growth of the hydropower market could be hindered by several major challenges including, a lengthy permitting process, high costs, and risks from environmental assessments, and opposition from local communities. These challenges increase investment risks and financing costs compared to other power generation and storage technologies.
To reduce these hurdles for the growth of hydropower market, IEA suggested that governments need to ensure that hydropower projects follow strict guidelines and best practices, support the expansion of pumped storage hydropower, and mobilize affordable financing for projects in developing countries. These steps could minimize sustainability risks, and increase social, economic, and environmental advantages.
According to the report, global hydropower capacity additions could increase 40% higher through 2030 through unblocking current project pipelines if governments tackle the hurdles to enhance the growth of the hydropower market. In addition, governments need to raise their hydropower ambitions to grow its capacity about twofold through 2030 than the expected increase of 230 GW, which can help put the world on a pathway to achieve net-zero emissions by 2050.
Fatih Birol, Executive Director of IEA, said, “Hydropower is the forgotten giant of clean electricity, squarely back on the energy and climate agenda if countries are serious about meeting their net-zero goals.”
“It brings valuable scale and flexibility to help electricity systems adjust quickly to shifts in demand and to compensate for fluctuations in supply from other sources. Hydropower’s advantage can make it a natural enabler of secure transitions in many countries as they shift to higher and higher shares of solar and wind provided that hydropower projects are developed in a sustainable and climate-resilient way,” he added.
According to another IEA report published in May 2021, the amount of renewable electricity capacity added in 2020 rose by 45% to 280 GW, the largest year-on-year increase since 1999.
Mercom had earlier reported that India overtook Japan as the fifth largest hydropower generator in the world with an installed capacity of 50.07 GW, according to the International Hydropower Association’s report.
Harsh Shukla is a staff reporter at Mercom India. Previously with Indian Express, he has covered general interest stories. He holds a Masters Degree in Journalism from Symbiosis Institute of Media and Communication, Pune.