Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/689907
UTILITY WEEK | 10TH - 16TH JUNE 2016 | 13 Policy & Regulation Market view S ometimes the old ways are the best." So says Naomie Harris as Moneypenny when witnessing James Bond shaving with a cutthroat, rather than electric, razor in 2012's Skyfall. The hydropower sector might be inclined to agree. It is certainly old, with water mills having been used to power industrial and agricultural processes – such as flour pro- duction – since the Han dynasty in China. And hydro's power has not waned in the electric age. In fact, since the world's first hydroelec- tric project was used to power a single lamp in an English country house in 1878, hydro generation has grown to provide 1,000GW of global installed capacity. That is 85 per cent of global renewables and 16 per cent of the world's total power supply. The trend shows no sign of slowing, with 40GW of power coming online in 2013 alone. Nor should it. An estimated 10,000TWh/year of global potential is untapped. Together with the more efficient use of existing assets, the hydropower industry has the potential to continue growing for decades to come. This is good news for the energy indus- try's efforts to move towards a more flex- ible energy future. The vision depends on the ability to quickly scale generation up or down to match supply to demand as needed – in real time. Hydro is perfectly placed to play a part. It is unique among renewable power sources for its ability to both meet baseload requirements and – using pump storage technology – bridge the capacity gap at times when demand outweighs supply. However, while it is obvious that hydro has promise, potential means nothing until it is unlocked. In this case, the problem is policy. First, using water to generate electric- ity has an environmental impact. Dams and turbines can change landscapes and river systems, affecting not just the water but the creatures that live in and around it – people too. And as water is the most precious com- modity on Earth, it is the responsibility of governments to protect it. However, too oen policies fail to strike the right balance – protecting water but fail- ing to get the most out of it as a resource. The issue is that dams can curtail river flows, tak- ing water away from those who need it for other purposes. Yet there is hope. The International Hydropower Association has developed its Hydropower Sustainability Protocol to aid the development of more sustainable hydro projects through a common language allow- ing the industry to discuss sustainability issues with governments, civil societies and financial institutions across borders. More than this, another plus is that once it is up and running, hydro generation's low base cost and very high efficiency allow it to provide a strong return on investment. And given that installations can run for up to 200 years, they make attractive bets for the long- term investor. What is more, hydro oen brings wider economic benefits. For instance, over the past few decades Brazil has seen rapid growth in its economy, as well as becoming a world leader in hydropower. It has played a key role in transforming Brazil's economic growth, particularly between 2000 and 2010, and led the country into seventh place in the World Bank's list of largest economies by GDP in 2012. A similar effect can be seen in Europe. The sector contributes an estimated €38 bil- lion annually (£30 billion) – a figure that is expected to rise to €75 billion by 2030. And that is before considering the 100,000 Euro- pean jobs directly and indirectly tied up in the industry. However, hydropower projects are major infrastructure investments and implementa- tions have been criticised for cost and sched- ule overruns. This is exactly the sort of thing that impedes the growth of a sector. With this in mind, it falls to states to make sure water resources are being used efficiently. While it is oen too expensive for governments to develop hydro projects alone, they can work in partnership with the private sector to enable a company to build and profit from a plant in a way that meets the overall needs of the resource – perhaps by adding hydropower to existing irriga- tion channels. Coupled with subsidies, this makes getting projects up and running a very attractive proposition. Flexible, efficient hydropower gives us real hope of a secure energy future. By pro- viding a balance of baseload reliability and the scalability to cover the intermittency of other renewables, hydro can prove that in the case of energy, the old ways really are the best. Marla Barnes, publisher and chief editor, hydro group, Penwell Pumping up hydro Newer renewables technologies often steal the limelight, but hydropower is the proven big hitter and it could deliver much more if governments backed it properly, says Maria Barnes. POTENTIAL VIABLE INSTALLED HYDROPOWER CAPACITY Region Number of sites Potential (kW)) Anglian 126 4,920-13,370 North West 284 32,000-37,700 Midlands 157 18,000-32,400 Southern 36 1,100-2,600 South West 322 20,000-29,400 Thames 125 16,200-30,120 North East 318 27,330-39,810 England total 1,368 119,550-185,400 Wales total 324 26,730-63,000 England and Wales total 1,692 146,280-248,400 Source: England and Wales Hydropower Resource Assessment "