Foreword

As the world strives towards ambitious net zero emissions targets, the 2022 Hydropower Status Report is a stark wakeup call to governments around the world that we are falling short of the progress that is needed.

But there are reasons to be positive. The Glasgow Climate Pact signed by all 197 parties at the closure of the United Change climate change conference, COP26, signified the first global agreement to phase down coal. The conversation must now address how we will fill the hole left by coal.  

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Fortunately, we do not need to look very far, as the technology that we need to achieve net zero already exists. With the flexibility, security and grid services provided by sustainable hydropower, we can deploy wind and solar energy at scale and deliver reliable energy systems for future generations.

We are moving in the right direction, but the pace needs to be stepped up. The last five years have seen an annual average of 22 GW of new hydropower capacity, which is perilously short of the 45 GW per year that is needed if we are to keep the global temperature rise below 1.5°C and reach net zero emissions by 2050.

We can supercharge the progress firstly by accelerating the development of pumped storage around the world. Secondly, we need to look towards the immense untapped hydropower potential that exists in many regions of the world, particularly Asia and Africa. Finally, we need to make the most of our existing hydropower fleet by modernising it, as well as integrating hydropower facilities into non-power water infrastructure wherever suitable.

The sustainable hydropower community is ready to deliver. We are working with a coalition of stakeholders all over the world to ensure that any new development is delivered responsibly, and delivers net positive benefits to society and the environment. This message is emphasised in the historic San José Declaration on Sustainable Hydropower, launched in September 2021 at the conclusion of the World Hydropower Congress following months of public consultation. The Declaration is clear that going forward “the only acceptable hydropower is sustainable hydropower”.

These are not just words. The Declaration is reinforced by the Hydropower Sustainability Standard, which is the first ever sustainability standard in the renewable energy sector. Also launched in September 2021, and governed by a multistakeholder body, the Standard enables responsible hydropower developers to certify their projects as sustainable.

So, we have the technology to achieve net zero and the knowledge to deliver it sustainably. All that’s needed is the political will to make it happen. We can, with hydropower.

IHA President Roger Gill and IHA CEO Eddie Rich

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Executive summary

The 2022 Hydropower Status Report, now in its ninth edition, is published while both climate change and the related issue of energy security are at the forefront of global discourse.

At COP26 (the United Nations climate change conference) in Glasgow in November 2021, welcome progress was made on some of the key climate change issues. Alongside headline deals on deforestation and methane emissions, important commitments were made by many countries, international financial institutions and banks to phase down coal and its financing.

Filling the hole left by coal will be a major task over the coming decade. Hydropower, with its ability to provide both flexible and reliable power, is ideally placed to deliver.

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The conflict in Ukraine is a human tragedy with profound global consequences. The impact on fossil fuel prices is having a major impact on the cost of living around the world. It has served to demonstrate how vulnerable the world economy is in relying on sources of energy that are restricted to just a few key regions.

In generating around 16 per cent of the world’s electricity, hydropower plays a key role providing low-carbon electricity at scale and free from many of the energy security concerns that plague fossil fuels. We know that to keep climate change below 2°C, or the more challenging 1.5°C net zero target, we will need to see a huge increase in low-carbon electricity generation. International agencies such as the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA) have consistently modelled a significant increase in the amount of hydropower needed in such energy systems.

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To achieve a 2°C target, we need to see around 850 GW of additional hydropower capacity added by 2050, while to achieve a 1.5°C target we will need at least 1,200 GW more. Unfortunately, this is not capacity that can be easily substituted by other low-carbon technologies. Variable sources such as wind and solar can only generate when the weather conditions are right.

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Landmark moments for sustainable hydropower development

For hydropower to play its role in the clean energy transition it is vital that it is developed sustainably. In 2021, leading hydropower companies and international organisations declared their support for a new sustainability certification scheme for hydropower – the Hydropower Sustainability Standard. Launched in September 2021 at the World Hydropower Congress, the Standard will help to ensure that hydropower projects across the world are recognised and certified for their environmental, social and governance performance.

The San José Declaration on Sustainable Hydropower, issued on 24 September 2021 at the conclusion of the Congress, outlines a vision for hydropower’s contribution to meeting global climate and development goals. At the heart of the Declaration is a recognition that “sustainable hydropower is a clean, green, modern and affordable solution to climate change”. It says that “going forward, the only acceptable hydropower is sustainable hydropower”.

Only China is keeping pace with net Zero pathway for hydropower

We are falling short of the development needed to make net zero goals a reality. We need to build around 30 GW a year to keep on track to the 2°C target, and around 45 GW for the more ambitious net zero 1.5°C target. Over the last five years growth has averaged only 22 GW per year, and more than half of this has been in China.

We estimate that there is around 132 GW of hydropower under construction around the world, with just under 430 GW in various stages of pre-construction development. But it is by no means clear that all of this will be built, and even if it is, it would still leave a 300 GW+ gap in the provision of flexible low-carbon generation as coal and gas are taken offline. We run the risk of having to choose between blackouts or carbon emissions, despite a huge amount of remaining potential that can be developed sustainably and cost-effectively.

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Hydropower development highlights last year

Hydropower generated around 4,300 terawatt hours (TWh) of clean electricity worldwide in 2021, down from the record of 4,370 TWh in 2020. Lower than average rainfall in many regions contributed to this downturn in generation. Hydropower’s generation is equivalent to around one and a half times the entire electricity consumption of the European Union, reflecting hydropower’s continued significant contribution to low-carbon generation globally.

Global hydropower installed capacity reached 1,360 gigawatts (GW) in 2021. This represents year-on-year growth of 1.9 per cent, higher than 2020, but still below the more than 2 per cent needed to enable hydropower’s essential contribution to tackling climate change.

During 2021, 26 GW of new hydropower capacity was put into operation, up on 2020’s 21 GW. Most of this growth came from China, which saw nearly 21 GW of new capacity come online.

Pumped storage hydropower totalled 4.7 GW of the new additions in capacity, up on the 1.5 GW added in 2020. Again, most of this was in China (4.5 GW), including 600 MW of capacity at the Fengning pumped storage facility, which will be the largest in the world at 3,600 MW once it is complete in 2023.

Major additions in 2021 included: the 824 MW Muskrat Falls Hydroelectric Generating Station, part of the Lower Churchill Project in Canada; the remaining 600 MW of capacity at Lao’s 1,272 MW Nam Ou plant; Nepal’s 456 MW Upper Tamakoshi project; units 3 and 4 of Kameng Hydropower Station in India, adding 300 MW; and a 324 MW unit added at the Dnesiter pumped storage plant in Ukraine, raising the plant’s installed capacity to 1,296 MW.

In China, the first six 1,000 MW turbines at the giant Baihetan hydropower plant started generating in 2021. Once complete, the 16,000 MW facility will be the world’s second largest. Other major additions in China included 3,400 MW at Wudongde, 2,500 MW at Lianghekou, and 1,500 MW brought into operation at Yangfanggou.

Where was capacity added in 2021?

China remains the world leader in respect to total hydropower installed capacity with over 390 GW, followed by Brazil (109 GW), the USA (102 GW) and Canada (82 GW). Russia, India and Japan also have around 50 GW or more.

38 countries added hydropower capacity in 2021 (including capacity added through modernisation), slightly up on the 35 countries that added capacity in 2020. The total amount of new capacity added, however, increased from 21 GW to 26 GW, led by China with 20.8 GW. No other country added more than 1 GW in 2021. Canada (924 MW), India (803 MW), Nepal (684 MW), Laos (600 MW) and Turkey (513 MW) all added more than 500 MW.

Methodology

The data presented in this report were continuously tracked and updated to account for new information in our global hydropower database, which tracks more than 13,000 stations in over 150 countries.

Data were compiled by a team of analysts using information sourced from (1) official statistics from governments, regulation agencies, transmission network operators and asset owners; (2) scientific articles and reports; (3) daily news reports involving hydropower plant development, official declarations of contracts, and equipment deals; and (4) direct consultation with operators and industry sources.

When generation data from primary sources are not available, estimates are prepared based on the previous year’s figure, averaged capacity factors and regional meteorological events and data.

For a small number of countries, capacity data from previous years has been updated with new information. This means that those countries will see a year-on-year change compared to previous years’ reports, but these increased capacity numbers are not treated as capacity added or lost in 2021.

Note that we have revised our estimate of Russia’s installed capacity up to 55 GW (from around 50 GW) last year. This reflects a different assessment methodology and is not due to new capacity installed in 2021 (of which there was 167 MW in Russia).

Regional developments

Africa 

• With 60 per cent of Africa’s installed hydropower capacity over 20 years old, new efforts are being made to advance modernisation across the continent. IHA is supporting the African Development Bank’s Africa Hydropower Modernization Program, which aims to increase generation capacity at low cost, with short leads times and minimal environmental impact. 

• The Grand Ethiopian Renaissance Dam (GERD) began electricity production in February 2022, commissioning two units with an installed capacity of 375 MW each, Once complete, it will be Africa’s largest hydropower plant at 5.3 GW. 

• Zambia commissioned the first 150 MW unit of the 750 MW Kafue Gorge Lower hydropower station in July 2021. 

• In Nigeria, the first 175 MW unit at the 700 MW Zungeru Hydropower Station was commissioned in Q1 2022. 

• The construction of a transmission line connecting Kenya to Ethiopia is near completion, and will enable 2,000 MW to be transferred between the countries. 

East Asia and Pacific 

• China’s mid-term and long-term plans for pumped storage hydropower development, published in September 2021, set out ambitious targets to reach a total installed capacity of at least 62 GW by 2025 and 120 GW by 2030. 

• The first two generators at China’s Fengning pumped storage facility went into operation in December 2021. Once all twelve generators are operational in 2023, it will be the world’s largest pumped storage facility, with a total installed capacity of 3,600 MW. 

• Work commenced on the world’s first “solar-hydro” station in Australia, using heat generated from PV to push turbines in a water-based reservoir. The project will provide an installed capacity of 300 MW when it is completed in 2023. 

• Indonesia published plans to phase out coal by 2056 and achieve net zero by 2060, identifying hydropower as the main source with 25.6 per cent of the national electricity supply.  

• Construction began in 2021 on the largest floating PV station in South-east Asia at Indonesia’s Cirata hydropower station, which will have an installed capacity of 145 MW when complete. 

Europe 

• Turkey and Norway led in new capacity added in Europe, making up most of the continent’s 1 GW hydropower growth in 2021. 

• Europe plans to diversify its energy sources and accelerate transition to renewables including hydropower, with the REPowerEU policy package announced to reduce reliance on gas imports in response to the war in Ukraine. 

• EU-27 countries added a record 34 GW of wind and solar capacity in 2021, while hydropower continues to be the leading renewable source of generation. 

• The North Sea Link was commissioned connecting UK’s grid to Norway, becoming the world’s longest subsea electricity interconnection and providing a new export route for Norwegian hydropower reserves. 

• The European Commission published the EU Taxonomy Climate Delegated Act, prompting calls for clarification and consistency in the investment criteria for hydropower. 

North and Central America 

• In the United States, a government bill was passed with a commitment to invest $US909 million into conventional hydropower, pumped storage and the marine energy industry. The DoE also announced US$8.5 million of funding to improve the operational flexibility of the country’s hydropower fleet. 

• In Canada, around 3 GW of new hydropower capacity neared completion, including four additional units at the Keeyask power plant in Manitoba. 

• The Mexican government continued its focus on the upgrade of existing hydropower capacity, with the bidding process beginning for the modernisation of the first nine hydroelectric plants. 

• Costa Rica’s Reventazón project became the world’s first hydropower plant to obtain climate bond certification using new Hydropower Criteria released by the Climate Bonds Initiative. 

• In Honduras, the 104-MW Patuca III hydropower plant came online at the end of 2020 to become the second largest in the country, but it will not be able to connect its full power to the grid until the transmission system is upgraded. 

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South America 

• Paraguay became the only country in the world with a 100 per cent renewable electricity supply, with hydropower as the backbone, after closing its last thermal plant in December 2021. 

• The expansion of the Yacyreta hydropower plant on the border of Argentina and Paraguay continued, which will increase its overall output by 10 per cent. 

• Brazil suffered its worst drought in 91 years in 2021 and sought to stabilise the grid by bolstering connectivity, increasing its energy imports from Argentina and Uruguay, and accelerating infrastructure projects to distribute power from the north-east of the country to the south.  

• The Congress of Colombia passed the Energy Transition Bill in June 2021, incentivising renewable energy development (including small hydropower) through a comprehensive regulatory framework. 

• Despite Covid-19 causing a slowdown in the construction of several projects, Peru’s overall electricity generation in 2021 surpassed pre-pandemic levels, with hydropower accounting for 56 per cent of supply. 

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South and Central Asia 

• Many countries across the region are planning to increase their hydropower capacity in the coming decade to reduce reliance on fossil fuel generation and preserve water. 

• India saw the largest increase in total hydropower capacity in the region in 2021, with over 800 MW of new operational installed capacity coming online. 

• Nepal significantly increased its installed hydropower capacity with the commissioning of the 456 MW Upper Tamakoshi project. 

• Extreme weather has had an increasingly negative impact on hydropower operations across the region, with droughts affecting power output in Iran, Sri Lanka, Kyrgyzstan and Uzbekistan, in some instances leading to civil unrest. 

• To address the ongoing issue of regional interconnectivity, work has continued on the CASA-1000 high-voltage transmission line, with its Tajikistan section close to completion and preliminary construction under way in Kyrgyzstan. 

• Covid-19 continued to cause significant project delays across the region, including Pakistan’s 720 MW Karot run-of-river scheme, which is now due to be commissioned in 2022.  ‍

Visit our in-depth regional profiles for further information:

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Regional profiles

Find out more about hydropower development in all regions of the world: 

2021: Pumped storage hydropower in the spotlight

In November 2021, the UK hosted COP26, the United Nations climate change conference, which set the eyes of the world on Glasgow. While in Scotland for the event, Malcolm Turnbull, IHA board member and former Prime Minister of Australia, visited Cruachan’s pumper storage hydropower (PSH) scheme. He remarked: “We need green energy security solutions. It was fascinating to visit Drax’s Cruachan Power Station in Scotland. It reminds me that this is a tried and tested technology.”

Mr Turnbull co-chaired the International Forum on Pumped Storage Hydropower (IFPSH) alongside Kelly Speakes-Backman, Acting Assistant Secretary at the US Department of Energy. Formed in November 2020 to research practical recommendations for governments and markets aimed at addressing the urgent need for green, long-duration energy storage in the clean energy transition, the Forum launched its findings on 16 September 2021 at a level-panel held as part of the World Hydropower Congress.  

The Forum consists of 13 governments led by the US Department of Energy and the International Hydropower Association (IHA), and involved more than 80 multilateral banks, research institutes, NGOs, and public and private companies.

The findings of the Forum concluded that: “Without adequate storage, there is a very real risk that electricity grids of the future will not be able to provide reliable power without recourse to high-carbon sources of back-up such as gas turbines”.

As part of the Forum, there were three working groups:

1. Sustainability

2. Capabilities, Costs and Innovation

3. Policy and Markets

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Sustainability Working Group findings

The overall objective of the Sustainability Working Group was to develop guidance and recommendations on how PSH can best support future power systems in the clean energy transition in the most sustainable way.

The main recommendations include:

• The sustainability assessment of PSH projects should rely on a multi-level approach, including system-level needs options assessment and project optimisation.

• Existing hydropower sustainability tools, including the Hydropower Sustainability Standard, are adequate for PSH technology and project assessment.

• PSH projects, as with many hydropower projects, can generate one-time or permanent local benefits of various kinds, which should be considered in their sustainability profile assessment.

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Capabilities, Costs and Innovations Working Group findings

PSH is a low-cost proven technology solution for high-capacity, long-duration energy storage. The Capabilities, Costs and Innovations Working Group provided comparisons across major storage technologies and presented the following conclusions regarding PSH’s increasingly important role in the energy system:

• With an increasing share of variable renewable energy and phasing out fossil-fuel power plants, energy storage and flexibility are increasingly needed. A range of flexibility options are available and should be assessed based on system characteristics and priorities.

• Grid stability, grid resilience and sufficient flexibility options for load-generation balancing will be central to planning for low-carbon electricity grids of the future.

• Simplistic capital expenditures (CAPEX) comparisons can be misleading without taking replacement life-cycles and maintenance costs into consideration. For example, the total cost of PSH is significantly cheaper than that of lithium-ion battery systems when accounting for PSH’s full lifespan of 80 years and considering storage capacity in the GWh class.

In addition to this comparisons work, the working group also provided a brief series of peer reviews of innovations for PSH. These new approaches for PSH covered three broad categories: furthering PSH potential (such as seawater PSH), retrofitting and upgrading PSH systems (such as utilising abandoned mines), and developing hybrid systems (such as combined with thermal storage).

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Policy and Markets Working Group: seven policy recommendations

The Policy and Markets Working group of the IFPSH put forward seven major recommendations for governments around the world to avert the risk of policymakers and grid operators falling back on fossil fuels to provide clean energy storage:

1. Assess long-term storage needs now, so that the most efficient options, which may take longer to build, are not lost. 

2. Ensure consistent, technology-neutral comparisons between energy storage and flexibility options. 

3. Remunerate providers of essential electricity grid, storage and flexibility services. 

4. Licensing and permitting should take advantage of internationally recognised sustainability tools. 

5. Ensure long-term revenue visibility with risk-sharing to deliver the lowest overall cost to society. 

6. Assess and map for pumped storage hydropower among potential existing hydropower assets and prospective sites.  

7. Support and incentivise pumped storage hydropower in green recovery programmes and green finance mechanisms. 

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Regional developments in pumped storage hydropower

China

China has been responsible for most of the recent growth in PSH in recent years, and in 2021 announced plans to double national capacity to 120 GW by 2030. This would represent a nearly fourfold increase from 32 GW in 2021 in less than ten years.  In September 2021, China's National Energy Administration (NEA) published the mid-term and long-term plan from 2021 to 2035 for PSH development. According to this plan, the installed capacity of PSH will be at least 62 GW in 2025, and around 120 GW in 2030.

The Jilin Dunhua 1.4 GW PSH project in China had its first two pump turbine units come online in June and October 2021, and was completed in April 2022, when the fourth of its 350 MW units went into operation. In December 2021, the first units of Fengning’s 3.6 GW PSH plan were commissioned, providing 600 MW to support the Winter Olympics.

Elsewhere in East Asia and Pacific

Australia announced that financial closure was reached on the Kidston Stage 2 project in May 2021. When completed, the 250 MW PSH plant will be able to store and discharge energy for up to eight hours. The plant will convert a decommissioned gold mine into a reservoir and provide rapid-response, emissions-free flexible power to Australia’s National Electricity Market, and is set to be completed in 2024.

In September 2021, Indonesia announced its first pumped storage plant. The World Bank-supported project, Upper Cisokan PSH, is expected to be 1,040 MW and located between Jakarta and Bandung. It will provide important system flexibility to the electricity in the region.

At the 2021 Hydropower Industry Day, the South Korean Hydropower Industry Association announced the construction of three new projects with a total capacity of 1.8 GW in Pocehon, Hongcheon and Yeongdong, which are set to be completed by 2034.

India

In India’s Draft National Electricity Policy (NEP) 2021, it noted the potential for 96.5 GW PSH; however, only 4.78 GW has been developed so far. To support the development of this immense potential, India’s Ministry of Power constituted several committees to suggest ways and means to promote PSH and form a comprehensive framework for development, policy and regulatory aspects, technology, and financial and taxation issues. The policy is currently being assessed and should be announced in 2022, as “a hope that this will give the necessary investment signals for developing PSH in India”.

The first draft was shared in January 2022 at a meeting between Shri RK Singh (the Union Minister of Power and New and Renewable Energy) and companies to gain their insights. As part of the discussion, Shri Singh shared that energy storage developers will be granted inter-state transmission system connectivity to sell and purchase power from any part of the country with transmission costs waived at the time of charging storage and selling stored renewable energy. He also stated that curtailment of renewable energy will be penalised under the provision of the policy, and storage will be part of the Renewable Purchase Obligation.

Elsewhere in South and Central Asia

In April 2021, Uzbekhydroenergo announced a plan to develop a 200 MW PSH and floating PV station at a reservoir in the Tashkent region of Uzbekistan.

Israel will double its existing PSH from 300 MW to 644 MW when the Kokhav Hayarden pumped storage project is commissioned in early 2023.

USA

In 2021, the United States added roughly 70 MW of PSH. Furthermore, in November, the US Department of Energy released a new tool to aid PSH project development. The Valuation Tool is a web-based platform that takes users through the process as set out in the Hydropower Valuation Guidebook and is intended to help developers accurately assess the full potential of a PSH project, especially within the overall power system.

Africa

In October 2021, the African Development Bank approved a US$86 million loan for the second phase of the 1 GW Lesotho Highlands Water Project, which will provide critical energy storage to the small southern African country. The project represents a partnership between Lesotho and South Africa, and will provide additional generation and water security in the Gauteng region.  

Europe

Following the final construction phase in 2021, the 880 MW Gouvães pumped storage hydroelectric plant as part of the Tâmega Giga Battery project in Portugal was officially commissioned in early 2022. In December 2021, the largest PSH plant in Europe became operational, with an initial 324 MW of 1,296 MW installed capacity and 1,684 MW in pumping mode at the Dniester site in Ukraine. The plant will eventually have a total capacity of 2,268 MW.  

In July 2021, as part of the Future Energy Systems and Flexibility paper, the UK’s Department of Business, Energy and Industrial Strategy (BEIS) released a consultation on large-scale and long duration energy storage, which gave UK hydropower operators the opportunity to review potential market mechanisms and policy interventions, including a cap and floor scheme, with the Government's response due in Q2 of 2022.

Developments and innovations in other technologies

During the reporting period, co-located solar and floating solar projects were announced in many countries. In Albania, the Qyrsaq ground-mounted solar is the first of its kind in the country and will provides an additional 5.1 MW capacity. In Nepal, a desk study report was undertaken on a floating photovoltaic solar plant in Indrasharowar, Kulekhani, which would be the country’s first floating solar project.

Kyrgyzstan’s Minister of Energy has signed an MoU with Masdar to support renewables projects, including floating solar PV and hydropower projects with the potential capacity of up to 1 GW.

Ghana has commissioned the first 50 MW of a 250 MW floating solar project at Bui, which will complement the existing 400 MW hydropower capacity. In early 2022, a co-located concentrated solar pilot project was commissioned next to a 1,540 MW hydro plant in São Paulo state, Brazil. Meanwhile, the Swiss Government announced a green hydrogen production facility at the Lake Schiffenen reservoir, with the site to be commissioned in 2023.

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