European electricity generator trade group Eurelectric, together with the Hydro Equipment Association (HEA) and European Small Hydropower Association (ESHA), have issued a new fact sheet on hydropower because, they believe, its key role as an enabler of the transition to clean renewable power remains insufficiently understood among Brussels-based policy makers.
The trade groups argue that hydropower in Europe not only creates economic value, but at the same time it also increases energy security and local energy supply and supports both the speed and volume of variable output renewable power entering the European energy system.
"Hydropower is a highly efficient and competitive electricity generation technology that lies at the heart of the renewable energy family and currently provides 11% of Europe's electricity. With its flexible capability to ease imbalances between demand and supply, it is already important to our electricity system today. It will become even more important as the share of variable generation from renewables such as wind and sun increases," the Eurelectric paper asserts. The group also makes much of hydropower's storage capabilities, noting that the total installed storage capacity in Europe already amounts to more than 180 TWh.
Nonetheless, continued hydropower deployment in the region faces several challenges, Eurelectric argues. Capital costs are high and there are long permit granting procedures and construction times. Such a long lead time increases future regulatory framework uncertainty and investment risk. Moreover, Eurelectric says, administrative barriers and regulatory changes during operation represent additional challenges. For example, grid fees can disadvantage pumped-storage plants compared with other competing flexibility options, the trade group says.
In its outlook, Eurelectric finds that hydropower can and should play a key role in achieving the EU 20-20-20 climate and renewable energy goals, and it makes a number of policy recommendations to ensure this happens.
Among the demands is a call to establish appropriate and consistent framework conditions and for European legislators to create a level playing field for power generation from domestic water resources, compared with other electricity production and storage technologies. Perhaps most telling, Eurelectric adds that a special focus should be placed on the value of providing flexibility to the electricity system. It is perhaps this more than any other attribute that sets hydro apart from other renewable energy sectors and that could have a significant economic value with the right balancing market structures in place. And, with the right structures, the possibility of using far more of Europe's hydropower potential becomes all but a certainty.