A report by the European Small Hydropower Association shows that small hydro development in the EU is not consistent across the board due to varying regulations, societal perceptions, environmental challenges and other external roadblocks to development. Nevertheless, it has the potential to provide a large portion of the region's renewable energy.
By Bethany Duarte
Bethany Duarte is associate editor of HRW – Hydro Review Worldwide.
Small hydro, defined as an installed capacity of 10 MW or less, is a relatively well-developed and mature sector in the European Union, currently contributing about 8% of the energy mix. However, the current production is only a small portion of the region's potential. In fact, the European Small Hydropower Association (ESHA) estimates that more than 50 TWh of annual generation potential has yet to be tapped, only in the 27 member states.
Development of these potential sites would prove beneficial to both the European Commission's plan to increase reliance on renewable energy by 2050 and the Commission's Renewable Directive's goal of generating 20% of the EU's energy via renewables by 2020. The Renewables Directive sets target levels for the EU as a whole and individually by member state. Implemented in 2009, the directive mandates member states to generate and consume a pre-set proportion of energy from renewable energy sources, such as hydroelectric, wind power and solar power.
As the representative and promoter of the European small hydro industry, ESHA released a comprehensive report entitled "Small Hydropower Roadmap – Condensed Research Data for EU-27" in September 2012. Designed to provide decision-makers with a comprehensive body of knowledge about small hydro in the EU, this Stream Map provides statistical information about small hydropower in the EU as a whole, as well as for each member state, including current and potential capacity, potential generation and hydro-related employment. In addition, ESHA offers suggestions for improvements with regulatory, financial and environmental issues, as well as advice on how to meet needs and encourage development within each individual sector. The data covers a time span from 2009 to 2011.
Analysis of each of the 27 member states reveals several unique aspects of European small hydro, as well as several themes that offer commentary on the state of small hydro in the EU-27.
Several of the EU member states have tremendous untapped small hydro potential. Based on generation and capacity potential detailed in the report, the following countries are lucrative small hydro development centers. Annual generation potential by 2020 in GWh is: Italy 8,883, Austria 6,609, Greece 5,378, France 2,389, Poland 1,834, Spain 1,569, Romania 1,360, and Portugal 1,246.
|With an annual generation potential of 8,883 GWh, Italy's small hydropower plants contribute significantly to the country's renewable energy portfolio.|
Within the EU, Italy leads in small hydro development, with installed capacity of 2,735 MW in 2010, and has the potential to increase this capacity to 3,900 MW by 2020. Additionally, Italy boasts the largest electricity generation from small hydro, 10,958 GWh/year, in the 27-member-state EU. Prime hydrological conditions, despite a regulatory and permitting period of two to three years, encourage development. Small hydropower continues to grow in Italy, gaining support as it mediates the loss of power from aging, less-efficient large plants.
Until 2012, there was considerable incentive for developers to build small hydro plants in Italy, including a comprehensive tariff system (€220/MWh) for hydro projects up to 1 MW. Although this has encouraged development, ESHA reports that many believe the incentives actually create a problem by encouraging development of small hydro plants anywhere in the country. The success of the sector has also prompted communities to look into small hydropower projects and pursue joint public-private opportunities.
Starting from 2013 in Italy a new incentive system is in force that decreases all tariffs and will reduce new small hydropower plant installations as a result. The differentiations are as follows:
1-20 kW, €57/MWh
20-500 kW, €219/MWh
500-1,000 kW, €115/MWh
Nearby, France also has significant small hydro capacity, with 2,110 MW of installed capacity in 2010 and a projected 2020 total of 2,615 MW. France boasts annual generation of 6,920 GWh from its 1,935 small hydro plants. The authorization period for new small hydro is several years longer in France, taking five to seven years from start to finish.
While France holds considerable potential for small hydropower development, the bulk of the potential is in greenfield projects. ESHA reports there are 527 potential new small hydro developments, capable of generating 4,368 GWh annually and adding 1,214 MW to the country's installed capacity. In addition, more than 700 small weirs are in place that could be equipped with hydroelectric turbines, generating an additional 1,068 GWh/year and contributing 303 MW.
Despite the obvious growth potential in these two countries, each faces rising challenges to its continued success as a small hydro developer and generator.
In Italy, local governments have limited the use of land and waterways for small hydro development, identifying them as prohibited areas. To discourage development in these environemtally senstive areas, governments require lengthy and costly environmental impact assessments regardless of the level of impact. Furthermore, the small hydro industry must deal with the rising popularity of other renewable energy projects — such as solar, biomass and wind — which are gaining lawmakers' attention and support. ESHA recommends continued and enhanced governmental support, promotion, and favorable legislation to keep the industry thriving.
|The Camowen River Hydro Turbine Project in Omagh, Ireland, is opposed by those who claim the small scheme has had a disastrous effect on the fish stock, and community support has decreased as a result.|
Similarly, French small hydro faces several challenges as a result of the Water Framework Directive, environmental legislation passed in 2000 that limits development by maintaining specific environmental directives. These include removing river obstructions that are not in working order, thus eliminating the ability to add hydroelectric capacity at preexisting weirs and small dams. The legislation's classification of rivers and their safety standards limits human interaction with the natural waterways beyond fishing. To appeal to environmental lobbyists, small hydro producers and developers are encouraging additional research to determine the true ecological impact of small hydropower on the rivers.
Support for small hydropower and development potential are not equal throughout the EU. Development of small hydropower is more challenging for a number of countries, generally in lower-lying areas. Among these countries, Ireland, Hungary, the eastern Baltic states, and Denmark rank as some of the least-developed small hydro sectors.
Ireland ranks low in terms of installed small hydro capacity, with only 42 MW in 2010 and a projected total of 60 MW in 2020. The country has 50 plants online, with potential to build 10 more. The country has a generation potential from small hydro of 227 GWh/year. As a result of the low level of development, hydro-related employment is also low, with only 124 positions at 31 companies, and the market for developers is small.
Small hydro has struggled to gain a foothold in the Irish renewable sector since some large projects, including pumped storage facilities, were developed in the mid-20th century. Despite a permitting and approval process of less than two years on average, the cost to develop small hydropower has thus far been a deterrent to investors and developers alike, ESHA says. According to the report, investment costs range from €3 million to €6 million per MW in Ireland, while heavy producers Italy and Romania have average investment costs of €4.5 million and €3 million per MW, respectively. Additionally, small hydro development in Ireland, as in many other European countries, faces tremendous pushback from the fishing industry, which has worked to prevent development that has an effect on fish and their habitat. Environmental impact assessments for new hydro development are rigorous, and water flow availability is a common point of contention for developers and lobbyists.
While the recent adoption of a feed-in tariff program in Ireland may spur development, the government's eyes are not on the industry as a heavyweight renewable contributor, ESHA says. This oversight diminishes the public's perception of small hydro's benefits and affects support of the industry.
Estonia provides an additional insight into the challenges small hydropower development faces in the EU. With installed capacity of only 8 MW, small hydropower contributes just 30 GWh annually. Despite a relatively short permitting process for small hydro development (four months to four years), a list of 112 rivers and tributaries off limits to hydropower development due to fish migration has greatly limited this development. In addition, border disputes with Russia and proprietary issues make financing and obtaining land rights a challenge for the waterways that remain open to development.
Poland is one of the most promising countries for small hydro development in the EU. However, only about 17% of the technical hydropower potential is being used in the country. Poland's small hydro sector is struggling with restrictive environmental and administrative barriers and is about to suffer a harsh setback. The upcoming regulation on support schemes will affect 450 small hydro plants by stripping financial and regulatory support without the possibility to regain it, ESHA says. As a result, 450 out of 760 small hydro plants are in danger of going bankrupt. Due to long and demanding authorization procedures, new investments cannot fill the gap. As a consequence, the upcoming legislation on promotion of renewable energy resources will cause a decline of energy generation in hydropower plants instead of increase, says ESHA.
Road to sustainable development
A brief snapshot of small hydro potential and development in the EU is truly a mixed bag of untapped potential, regulatory hurdles and environmental challenges. Analysis of the data is useful in determining the next steps required to encourage, promote and enable small hydro development.
For the small hydropower industry to flourish in Europe, ESHA recommends that governing bodies implement stable and consistent policies and regulations for permitting, funding and development. Stability in the market would be encouraging and appealing to investors and would increase the value of proposed developments to utilities. To correctly mitigate environmental impact concerns, environmental agencies should thoroughly research the effect of small hydropower on natural waterways, fish habitats and ecosystems as they propose protective legislation.
The "Small Hydropower Roadmap – Condensed Research Data for EU-27" is available at www.streammap.esha.be.
Bethany Duarte is associate editor of HRW-Hydro Review Worldwide.