Survey of Energy Resources 2007
The Changing Role of Hydropower
Most of the early hydropower projects were built to provide a primary 'base load' to the power system and this pattern will continue in countries where hydropower occupies a significant share in the power generation mix. As other technologies have been introduced, hydro has tended to evolve into a supporting role - responding to gaps between supply and peak demand.
The challenge is to continuously improve hydropower technology in terms of environmental performance, materials, efficiency, operating range, and costs. From the smallest to the largest, all developments have a footprint, especially evident in the cumulative effect of many small schemes. Smaller-scale hydro plays an important role in remote areas, in community developments, and in maximising the value of multi-purpose infrastructure - applicable in both developed and developing countries. Large schemes will continue to be the most environmentally benign in supporting grid systems and powering industrial and urban centres.
The least-cost option for producers desiring additional capacity is almost always to modernise existing plants, when this is an option. Equipment with improved performance can be retrofitted, often to accommodate market demands for more flexible, peaking modes of operation. Most of the 807 GW of hydro equipment in operation today will need to be modernised by 2030.
There are many recent cases of incremental hydropower, both where current capacity has been added to and where existing infrastructure has been reworked, resulting in entirely new hydropower facilities. There are 45 000 large dams in the world and the majority do not have a hydro component. While this is not always an economic option, there is a significant market niche in this area.
Development of hydro has a long-term economic advantage. With annual operating costs being a tiny fraction of the initial capital cost, hydro's autonomy from the fuel price is a distinct advantage. The flexibility of storage hydro (using reservoirs) also makes it a compelling partner to ensure security in mixed power systems. Another driver for hydro development is the increasing need for water management. Multi-purpose hydro reservoirs can bring security of water supply as well as power.