As European nations focus on meeting the EU's target to increase renewables to 20% of all energy production by 2020 (current estimates have the EU at a little less than 11%), there are mixed signals as to where hydropower might fit in.
Opportunity exists in several nations for hydro development, but many of the support mechanisms enjoyed by other renewable energy forms - as well as the attention of policymakers - are seen by some industry observers as lacking.
Regardless, there are signs of optimism on certain aspects of hydro development, namely in the form of small projects and pumped storage.Finding ways to get around barriers such as high start-up costs, lengthy construction schedules and environmental concerns will be key to expanding the continent's largest source of renewable power. Hydropower accounts for 69% of all renewable electricity generation in Europe currently, according to electricity industry association Eurelectric.
The goal of increasing electricity supply from renewables has its roots in a desire to lower the continent's contribution to greenhouse gas emissions, but there is also the need to have a greater percentage of energy consumed in Europe produced within the EU.
Examing prospects for European hydro
Of all the renewables in Europe, hydro is still the biggest source, accounting for about 323 TWh in 2010, according to "EU Energy Trends 2030," which is published by the European Commission's Directorate-General for Energy. Onshore wind came in a distant second with 147 TWh.
That same report, however, predicts a boom in nearly every renewable except of hydro. By 2020, the report indicates onshore wind will grow to 348 TWh compared to hydro's 341 TWh. And biomass will grow from 120 TWh to 268 TWh.
By 2030, the combination of onshore and offshore wind will produce 694 TWh of electricity while biomass will increase slightly to 286 TWh. Solar, with just 17 TWh reported in 2007, will jump to 94 TWh by 2030, the report indicates.
Hydro, meanwhile, will likely see nearly flat growth at 358 TWh by 2030.
"Generation from renewable energy sources sees a major expansion and sees a modification in the structure," the report says. "Hydropower remains constant, thus decreasing considerably in share."
The main reasons for this lack of growth are well-documented: High up-front costs, the long regulatory approval process and the time it takes to make a hydro facility profitable.
"Hydro is so hard to ramp up because it takes so long to develop," says Paul Gipe, a renewable energy advocate and feed-in-tariff expert. "It's not that we don't want to do it, it's just so hard to do."
And in much of Europe, the number of available places to build dams and power stations is limited.
"The reason is probably that most of the technically and economically feasible potential has already been constructed, and that new large hydro projects would be difficult to get approved for environmental and social reasons," says Frederic Louis, senior hydropower specialist at the Washington, D.C.-based World Bank.
But that doesn't mean hydro is out of the renewable game in Europe.
Gipe, whose research includes studying all renewable energy prospects worldwide, says hydro developers need only look at the industry's recent past to see where it might head into the future.
Small hydro, feed-in tariffs and pumped storage
Feed-in tariffs - the government subsidies paid by utility ratepayers to help energy producers make ends meet while developing renewable energy projects - have been the key regulatory mechanism used to help EU nations meet the 20% renewable energy goal, Gipe says.
But as important as they are to technologies like solar and wind, they got their start with hydro.
German farmers who owned unused small hydro facilities began to look at their assets as a way to make up for lost agricultural subsidies but sought legislative help to make these projects work. Their lobbying efforts, which later gained broad ideological support among German lawmakers, led to FITs in 1991 that ultimately resulted in the system of FITs used today, Gipe explains.
"All the feed-in tariffs (in 1991) were done for hydro. Germany was the poster child for this," he says.
Today, the FIT system is the tool of choice in Europe for encouraging renewable development, with 23 of the EU's 27 countries having some form of FIT for renewable energy, Gipe says.
But this system has its limitations. Larger projects are commonly excluded from FITs because the funding would be exhausted if a large operation received the same level of support as is given to smaller ones. "There has to be a limit or there wouldn't be enough money for the fund," Louis says. Either that or the fees given to ratepayers to support larger projects would make utility bills prohibitively high, he concludes.
Smaller projects can still compete for FIT funds, however. Whereas economy of scale often works to the advantage of larger facilities during development and operation, that same rule proportionally drives up the cost of operation for smaller ones; their smaller size makes subsidizing them a cost-efficient target for FITs.
In Europe, projects with a capacity of 12 MW or less are typically eligible for FITs, Louis says.
While the EU forecasts limited growth in hydropower development overall, another study projects significant increases in small hydro development in the EU.
Small hydro projects in the EU accounted for nearly 41 TWh of electricity in 2008, a number that is expected to climb to more than 54 TWh by 2020, according to figures published by the European Small Hydro Association.
And while not every European country is a good candidate for hydro development, Louis noted that Portugal, Austria and Switzerland still possess potential, particularly for pumped storage. In fact, work is advancing on development of the 192 MW Frades II pumped-storage plant in northern Portugal, which is one of six new hydro plants being constructed by Energias de Portugal.
Additionally, the Joint Research Centre of the European Commission released a report in 2012 noting Croatia has the potential to triple its pumped-storage capacity from 20 GWh to more than 60 GWh.
Pumped storage has become a hotter topic recently as energy experts try to find a way to boost storage and supplement Europe's power grid during peak usage.
Throughout 2010 and 2011, Eure-lectric's working group on hydropower researched the hydro and pumped-storage potential in Europe, including obstacles to its development. The resulting report advocates increased attention to this technology. With Europe's energy transition under way, it will be vital to develop the remaining hydro potential and to make the most of existing capacity, not least by making it accessible at a European rather than the now predominant national or sub-national level. Eurelectric is an association that represents the common interests of the European electricity industry.
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