Hydropower is the world’s oldest source of clean, renewable energy. Because of this, it seems that hydro and it’s still very massive potential, are overlooked.
While establishing and considering other energy sources for a low or zero-carbon energy future (wind, solar, geothermal) we’ve forgotten that hydro is still the leading source of clean and renewable energy, by a large margin.
But, hydro projects of old are not and cannot be the hydro projects of today.
In this post we’ll establish a foundation of understanding exactly what is hydropower, how does it work, and a brief history of the oldest captured renewable energy source.
This is so we can come to imagine what the future of hydropower looks like—in such a way that we’re not only securing a reliable source of clean energy but as well, seeking to make our waterways and the ecosystems at their core, healthier and more resilient.
We will introduce hydropower with the help of Gia Schneider, the Co-Founder and CEO of Natel Energy. Natel Energy is a hydropower company addressing two existential crises of our time: climate change and biodiversity loss.
Let’s get to the basics by hearing first from Gia on what is hydropower.
What is Hydropower?
Hydropower for those who are not familiar with it is how we generate electricity from moving water, primarily in rivers.
It is the world’s oldest form of renewable energy in the sense that we have plants in some cases that are over a hundred years old, it’s also the largest source of renewable energy in the world today.
So the majority of the world’s renewable energy comes from hydro currently. It’s been around for a while.
According to the World Bank, Hydropower provides roughly 16% of the world’s electricity and as Gia mentioned, it’s the largest source of renewable, low-carbon energy providing nearly 60% of all energy in that category.
The International Energy Agency describes hydropower as a “mature technology,” as we’ve been able to harness the potential energy of water flows for well over a century now.
Hydropower is clean energy, not perfect (as we’ll discuss later), but still clean energy. It’s cost-competitive, although varying by the site, generating some of the cheapest electricity available.
And it’s established, to quote Gia again, “it’s been around for a while.”
Brief History of Hydropower
There is evidence of humans channeling water power all the way back to ancient Greek civilizations. We developed mills to process grain, irrigate crops, power sawmills, and much more.
It was in the 1800s when a French engineer by the name of Benoît Fourneyron invented the first turbine that would convert the kinetic energy produced by the flow of water into electricity.
While able to produce a working turbine throughout the 1820s and 30s, it wasn’t until 1895 that Fourneyron turbines were installed on the U.S. side of Niagra falls for generating electricity. 1 Apparently, his turbines are still in operation on that site today.
This first hydroelectric plant established to sell power to public and private customers in the U.S. was the Vulcan Street Plant built on the Fox River in Appleton, Wisconsin. They first attempted operation on September 27th, 1882 but ran into a mechanical issue. Edward Ames (no relation, but cool, huh?) was called to fix the problem because he installed the generator. Three days later, the plant was operational.
So, hydropower has been around for a long time and so has generating electricity from hydropower. But how does it work?
How Does Hydropower Work?
Hydropower is produced by capturing and converting the energy of moving water from a river, stream, or ocean. Hydropower then becomes electricity, or hydroelectricity.
Most commonly, we generate hydroelectricity through the construction of dams. Dams are built to restrain and concentrate the flow of water into a reservoir. The water is then released from this reservoir (set at a higher elevation) and directed to run through a turbine that spins and creates kinetic energy. That kinetic energy is then converted into electricity through the use of a generator and that power is then sent to the power grid. Typically, the water then flows through the hydropower plant and is released into whatever river is below.
At the Hoover Dam, for example, the U.S.’s largest hydroelectric plant, water from Lake Mead (the largest U.S. reservoir) flows through an intake valve to spin turbines and power generators. That water is then released into the Colorado River which is at a lower elevation.
There are a few different types of hydroelectric facilities that are employed to generate electricity.
Types of Hydropower
Impoundment — An impoundment hydropower facility might be what we first think of when we think of hydropower. Impoundment facilities use dams to retain water in reservoirs, that water is then released through turbines where the energy is converted to electricity, and the water is then released to a body of water below (like our definition).
Pumped Storage — Pumped Storage hydropower connects an upper reservoir to a lower reservoir. Water can be pumped up into the upper reservoir for storage to be released at a later point when that energy is needed. There are two different pumped storage systems:
Closed Loop — Closed Loop Pumped storage is a hydro system that has an upper reservoir and lower reservoir that are not connected to any additional water source like a river. These are deemed more environmentally friendly as this closed system is not disrupting any existing water system. This likewise makes the permitting process and site selection process much easier. The water can be moved back and forth between the two reservoirs.
Open Loop — Open Loop Pumped storage is a hydro system that has an upper reservoir and no lower reservoir. Open Loop systems are connected to some body of water like a river.
Run-of-River Systems — Also known as a Diversion, run-of-river systems require no reservoirs or dams, but they redirect the flow of water through a separate channel containing the facilities for generating hydroelectricity. After running through turbines the flow of water is typically connected back to its original source.
Hydropower and the Water Cycle
Although a source of clean, renewable energy, understanding how hydropower works also means that we must understand how the water cycle works.
Heat from the sun causes water from lakes, rivers, and oceans to evaporate and turn to vapor. This water vapor condenses into clouds and falls as precipitation in the forms of rain and snow. The rain and snow collect in streams and rivers which then begins the cycle all over again.
While hydropower is an extremely flexible and dependable energy source, it’s important to understand that effects on the water cycle (particularly with droughts) will then affect the availability of hydropower.
If there is less water accumulating in reservoirs and flowing through rivers and streams, then there is less available power.
This is why historic droughts in the Southwestern United States caused the energy output from the Hoover Dam to be cut in half in the summer of 2022. The water levels were so low, they were beneath some of the intake valves that would direct water into the Hoover Dam’s turbines.
However, we’ll discuss this more when we get specific about the environmental drawbacks of hydropower in a later part of this series.
What is the Cost of Hydropower?
After a hydroelectric power plant is established and conditions are ideal, hydropower stands out as an extremely cost-competitive energy source.
As for what sort of exact costs can be expected using the most modern methods, here is what Gia Schneider has to say.
A new build is different than repowering. Repowering tends to be a little less expensive simply because you’ve already got the existing plant and equipment. It’s more of an upgrade. And because these are old plants in some cases 50 or 80 years old, they’re fully depreciated. So the effective costs can look a little artificially low.
On that side, you’re down into the 3 cents range [per kWh] maybe even lower, which for an asset that is producing, not just instantaneous electrons, but is actually able to a certain amount of electricity all year and as a base load asset, which is not a knock against solar or wind. We’re gonna need everything to make the energy transition. But the challenge that we face is that we get sun for six, maybe a few more hours every day. We get wind depending on where we are at different times.
Hydro has a profile that can slot in nicely as a foundational element around that.
So 3 cents on the low end and then for projects on the new build side we’re working on coming in more like 5 to 6 cents per kilowatt hour.
And that’s cheaper than what you would have with solar plus storage. But I would caveat this by saying we need all of this. So we think of it less as a kind of a elbows out competition and more of at the end of the day, the big picture is that this is very cost-effective power.
It is also a very complimentary and cost-effective resource for grid reliability services. And frankly, we’re seeing opportunities to put batteries co-located with hydro facilities. So I think the future actually looks quite different where there will be certain markets where it’s going to make a ton of sense to have a smaller hydro facility with some battery storage and maybe also some solar co-located as a hybridized plant. I think that’s actually a lot of the picture is not just like hydro only, but hydro plus, where the hydro is the base load element, supporting an overall energy supply stack.
Hydropower Maintenance & Retrofitting
Hydropower’s costs come predominately from the setup and maintenance of the hydropower facilities themselves. These costs are highly dependent on the size and scale of the project in question.
Although, hydropower isn’t susceptible to the market changes of oil, a major benefit. However, the age of predominately North American and European hydropower infrastructure creates some other unfortunate costs. Relicensing older dams to continue electricity generation can be a major cost burden. This is in fact one aspect that will greatly challenge the U.S.’s ability to expand energy production from hydro for example. As reported by Bloomberg Law, the cost to relicense can exceed $50 million in some cases.
Licensing aside, the largest cost burden for the sector (in the U.S. and Europe) is in maintenance and retrofitting older projects to newer standards and environmental understanding.
This perhaps is why, Gia might see the future of hydro as less so the grand damning projects of old, and more so something like “hydro-plus,” which we’ll dive into more, later.
Hydropower: The Opportunity
With a 101 understanding of hydropower under our belts and a further discussion of both the advantages and disadvantages of wielding hydro for our zero-carbon future to come, I think Gia wonderfully summarizes the context through which we can understand hydro, here:
So the natural question would be what’s the opportunity that we’re focused on?
Really, it’s twofold. In hydro, we have this case where because it’s been around for a long time, we’ve got about 1.3 terawatts of installed operating assets today. So we have a large installed base, but that installed base is in general quite old. Over half of it is over several decades old. And in addition, it was then built at a time when the environmental requirements or the environmental objectives and our understanding of the impact of these projects on rivers and river systems were quite different than today.
And so as we go forward, we need to upgrade those existing older assets to meet modern environmental requirements. And so that’s one part of the opportunity that we’re focused on. And then the other part is that we actually have quite a bit of additional resources where we can do about 10 times what we currently have installed today with appropriate technology that helps unlock that new hydro resource in a way that keeps rivers connected or even in some cases may help improve river function. That’s the other part of what we’re focused on.
So how do we upgrade the old stuff to be productive and part of the energy transition, and then how do we unlock new stuff?
Again, because the challenge we face to make this transition to a zero-carbon grid is quite substantial. The International Energy Agency in a report earlier this year called out that we need to double the annual capacity additions of hydropower if we are, along with everything else we need to do on wind and solar and batteries, et cetera, to meet Paris climate objectives. So our focus is how do we have hydro play an important role in that transition.
As we look forward, climate change and biodiversity loss are kind of like the twin crises that face all of us. And hydropower is this interesting resource that sits kind of at the nexus of several things. Climate change is water change.
One of the key things besides just surface temperatures that we directly experience that are driven by climate change is changing water patterns. So whether it’s droughts or floods, more extreme precipitation events, et cetera, and that alone, that water change has a whole host of implications for how we need to evolve our water infrastructure, to adapt to those changing water patterns.
Because every hydro project is a water project, hydropower has this interesting role where it can be both a way to reduce emissions, to help mitigate, but also adapt, on the waterside.
The other really interesting nexus with the biodiversity question is that rivers are kind of the circulatory system in some sense of the Earth.
They are incredibly important. Obviously, everything needs water in order to live. But also the way rivers move sediment, the species that a functioning, healthy watershed supports, all of that is dramatically impacted by a whole host of human activities, hydropower being one of them.
Unfortunately, the majority of the world’s rivers today are heavily modified and in many cases, fairly degraded.
And so the other question we asked is, is there a way for us to make hydropower projects part of restoring a river? And I want to be clear that we’re not talking about having true wild, natural function but it’s more of the question of can we design hydropower facilities leveraging work that’s being done in river restoration, dam removal, etc., so that these projects help contribute to an improvement in river function and river health at the same time that they’re generating renewable energy and helping us manage these changing water patterns.
And so it’s this opportunity from our perspective where some key innovations can help take this resource that’s been with us for over a century and modernize it so that it is a really meaningful and very positive part of this transition to not just a zero-carbon grid, but hopefully a more biodiverse and sustainable future.
Be sure to check out what’s next to come: hydropower’s advantages and drawbacks.
Gia Schneider is a social entrepreneur, environmental activist, and the Co-founder and CEO of Hydropower company Natel Energy. She holds a Bachelor of Science in Chemical Engineering from MIT and has over 20 years of experience in the energy industry. Gia is passionate about finding economically viable solutions to mitigate climate change, foster sustainable development, and produce inexpensive renewable energy.
Learn more and connect with Gia here:
1 Fourneyron, unfortunately, died 30 years before the installation of his turbines at Niagra Falls.
Co-Founder & CEO, Grow Ensemble
I’m Cory Ames. I’m a writer, podcaster, social entrepreneur, and the Founder of Grow Ensemble.
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