Hydropower is a modern form of energy generation with great potential for expansion, says Roland Münch, CEO of Voith Hydro Holding GmbH & Co. KG. He would like to see the legal framework change to show more support of hydropower in the overall generation mix.
By David Appleyard
Voith Hydro is a full-line supplier of hydroelectric equipment, technology and services covering the entire life cycle of new and existing large and small plants. The company has installed more than 40,000 generators and turbines around the world, which it says represents about one fourth of the world’s installed hydroelectric power.
HRW-Hydro Review Worldwide recently sat down with Dr. Roland Münch — a member of the corporate board of management of Voith GmbH and president and chief executive officer of Voith Hydro Holding GmbH & Co. KG in Germany — to learn more about this company and its views on the global market for hydropower. The following is a transcript of that discussion.
Q: What does the term “modern hydropower” mean to you?
Münch: Hydropower is a modern, up-to-date form of energy generation. It is eco-friendly, reliable and highly efficient. It contributes significantly to climate-friendly energy production and is therefore indispensable, if we want to confine climate change as planned: by utilizing it as a huge storage facility for energy gained from wind and solar power and by raising its worldwide development potential, which is still enormous.
Despite its long history, hydropower is a modern industry. It combines long tradition with innovative spirit. Today, hydropower is more dynamic, flexible and diversified than ever before. As an example, just look at the latest, highly flexible pumped-storage technologies or the work going on with regard to ocean energy.
Modern hydropower adapts itself to the varying requirements made by the global energy market. The world’s hunger for energy is enormous and continues to grow — hydropower can and must cover a large portion of this demand.
Q: What is the main challenge for hydropower development around the world currently?
Münch: About 80% of all energy from renewable sources originates from hydropower. It is thus the largest among all renewable energy sources and plays a vital role in the green energy mix. We must emphasize this role more strongly and underline the many advantages of hydropower — this is important, in order to ensure that hydropower takes up this vital role also in the future.
Compared with other renewable energies, hydropower as the oldest renewable is often put at a legal disadvantage. Take the Energy Transition in Germany (“German Energiewende”) for example: due to the prioritized access of wind and solar plants to the grid, pumped-storage plants at present are often not able to operate with reasonable cost-effectiveness. This is an area where we strongly wish for fairer funding and simpler approval procedures. Or look at North America, where huge amounts of shale gas are being extracted and gas prices are dropping. As a result, investments in other forms of energy production, among them hydropower projects, have been withdrawn.
At the same time, the potential for the further development of hydropower is enormous, not only in the key growth markets. Worldwide, there are, for example, countless transverse structures, such as dams and locks, that have so far not been used for energy production from hydropower — at present less than 15%. There is a huge amount of untapped potential, and these opportunities must be utilized.
When we look at the global obstacles that are presented to new infrastructure projects, it is important that the advantages of hydropower, such as flood protection and navigability, are entered much more strongly into the public debate.
Q: What is the most striking change you have witnessed for hydropower recently?
Münch: One of the most striking changes in recent years is undoubtedly the outstanding importance hydropower has gained for the successful development of renewable energies. Hydropower is the only renewable energy source that is suitable for both baseload situations and compensating peak loads. We need pumped-storage power plants as huge “batteries” for storing the electricity generated from wind and solar power and for feeding this energy back into the grid when required.
Another remarkable factor in the context of regional markets is the numerous major projects, which we have seen in Asia and South America in recent years. They are an indicator of the ongoing rise in significance of these markets. The potential is enormous: in South America, only 20% of the existing hydropower potential has been exploited; in Asia the share is even as low as 16%. In addition, we are witnessing constant technical progress: as far as generators are concerned, we are now close to the 1,000 MVA class. In the automation sector, digitalization has opened up numerous possibilities of controlling hydropower plants externally and reacting more quickly. This increases availability and improves the economy of hydropower plants.
Q: What single change would you like to see that could enhance the role of modern hydropower?
Münch: I would like to see legal framework conditions that do not treat hydropower less favorably compared to other renewable energies and instead support its positive role. I wish for the contribution of hydropower to stable, climate-friendly energy generation and its significance for our energy system to receive greater public recognition.
This is an area where we as an industry have to highlight the many advantages of hydropower more strongly and publicize them more openly. As far as legislation is concerned, I would like to see reliable framework conditions to encourage long-term hydropower investment decisions, faster approval procedures and a compensation structure that takes the specific contributions of hydropower into account.
It has become increasingly difficult to calculate and secure the viability of investments. Pumped-storage plants, for example, are started up and shut down several times per day. The demand on their flexibility has increased. We can offer the right technology for this, but the revenue from the pricing models for these flexible storage outputs is still insufficient.
In addition, the approval procedures for new power plants are often too long and complicated, just as with other infrastructure projects. This is another challenge that has to be solved on a political level.
Q: Could you identify key hydropower markets and explain why they are attractive?
Münch: The most attractive opportunities are still in Asia and South America. In both regions, less than 20% of the potential of electricity from hydropower have been exploited. The total potential is vast — in Asia alone, there is about 1,750 GW of technically feasible capacity. In this context, China certainly stands out as an individual market. Along the Yangtze River alone, hydropower plants with a total capacity of more than 70 GW are either planned, under construction or already completed. These are extraordinary dimensions.
Compare this with Germany: If we add up all kinds of energy generation represented here, we end up with about 120 GW of installed power. But we must by no means ignore Europe. Through modernizations and efficiency upgrades, we can achieve a great deal here. Russia in particular is a highly promising market, not least because of its size and its untapped potential. Canada and the USA also remain highly attractive markets. There, just like in Europe, we are looking at an ongoing trend toward the modernization of existing hydropower plants. Due to the ever-increasing number of hydroelectric plants installed all over the world and ever longer service lives, this tendency towards plant upgrades has meanwhile also reached other important hydropower markets, such as Brazil and China.
And last but not least, Africa is also emerging as an interesting market. The technically feasible development potential for hydropower in Africa is estimated to be about 425 GW at an installed capacity of about 26 GW. Africa thus has the world’s highest percentage of undeveloped hydropower potential.
Apart from that, I can also see excellent growth opportunities in the upgrades of existing river barrages, such as weirs and dams. At the moment, only 20% of the available potential are being utilized. An example: in the USA, some 80,000 dams are waiting for electrification — a huge potential.
Q: Tell us more about South America, and Brazil in particular. How has the energy market there developed, and what do you see as the key developments for hydropower?
Münch: In general, the demand for reliable electricity supply in South America, and especially in Brazil, is increasing. The natural hydropower potential in the region results in overall good perspectives for further development. Brazil — as the largest electricity market in South America, with more than three quarters of the electricity needed based on hydropower — must be highlighted as one of the most dynamic markets. Here, we see a two-fold development. On the one hand, there are and still will be many new, large-scale hydro plants being built. On the other hand, we see an increasing trend toward modernizations. After decades of operation, many companies are upgrading their fleets.
We are convinced that Voith Hydro can benefit from both developments. Apart from our hydro facility and foundry in Sao Paulo, we have invested in our new facility in Manaus in the northern region of Brazil to support hydropower projects and customers there and outside Brazil. Voith Hydro maintains a number of sales offices in other South American countries to be close to our customers and be able to support them locally.
Q: In terms of technology, what areas are witnessing the biggest advances for hydropower? What are the innovative approaches you would put forward and use as an example of hydropower as a modern, evolving technology?
Münch: Hydropower is a highly developed technology, but there is room for innovation, and we are doing research and development to move things forward. Let me give you two examples:
We are continuously improving the overall efficiency of hydro stations. With modern plants, the efficiency rate is at 95%. We can ensure this efficiency across a wide operating range — not only at full turbine load but also at lower outputs. This is an area where we have achieved remarkable progress in recent years, because we are now able to calculate turbine flows three-dimensionally.
With the StreamDiver, we have implemented an innovative concept in the small hydro segment, which can be applied in environments where the construction of conventional hydro plants had previously been impossible due to landscape preservation specifications or because of low heads.
As far as generators are concerned, we are now close to the 1,000 MVA class. This more or less constitutes the world’s largest hydro generators soon to be installed in Chinese projects. Just recently, the most powerful turbine-generator ever built by Voith Hydro has entered service in the Chinese plant Xiluodu. At 784 MW, the output of this turbine-generator unit is higher than that of the world’s largest hydro plants. This achievement is an important step toward the first 1 GW unit.
The development and production of 25 kV generator bars is an important milestone in this context, which will bring us closer to these dimensions.
Q: What, if any, new technologies do you expect to see in the generator sector in the coming years?
Münch: With a view to the future development of generators, we expect further improvements in insulating technology. Material research is constantly advancing, and this progress can be incorporated into our generator development.
We will also see further improvement as far as generator cooling is concerned, which will enable further increases in output and efficiency. And finally, I anticipate that ever-increasing outputs will also result in ever-more-robust machines.
Q: Do you have any final comments/ thoughts on the future of hydropower?
Münch: I see the future of hydropower in very positive terms. The International Energy Agency expects that the amount of energy generated from hydropower will have doubled by 2050. Hydropower is already indispensable and will continue to play a leading role in energy supplies and in the mix of renewable energy sources.
The hunger for energy in the world’s growth regions is unbroken. Yet our reserves of fossil energy carriers are finite and will become more and more expensive in the future. At the same time, ongoing climate change also calls for a limitation of CO2 emissions.
Hydropower is the most suitable technology for these challenges: it ensures eco-friendly, stable and reliable, reasonably-priced, efficient and widely available energy supplies that are affordable in the long term. This makes it particularly suitable for growth countries and emerging markets, where hydropower can contribute to economic progress and thus improved living conditions. People get better access to education, jobs are being created and infrastructures are being developed.
I am firmly convinced: Hydroelectric power is a modern technology that will continue to play a vital role in the global energy mix.
David Appleyard is chief editor of HRW-Hydro Review Worldwide.