The International Renewable Energy Agency (IRENA) released a report on Monday stating that hydropower capacity, including pumped storage, should more than double by the year 2050 in order to meet the 1.5°C of global warming outlined by the Paris Agreement.
For installed capacity to double, investment in hydropower will need to increase fivefold between now and 2050.
In order to reach the required $100bn in investment, IRENA suggests that markets recognise the high value of hydropower.
According to IRENA, hydropower is already the largest source of renewable energy worldwide, but vast amounts of hydropower potential remain untapped.
Asia is the continent with the largest installed hydropower capacity to date. China is the largest producer of hydropower globally at 1,300TWh per year.
While installation costs are high, hydropower represents the cheapest source of renewable electricity available. Despite this, in recent years investments in hydropower have been dwarfed by investments in solar and wind technologies.
Between the years 2013 and 2018, roughly $72bn was invested in hydropower, compared with $1.8trn of investment in renewables, equating to roughly 4% of total renewable investment.
The report’s analysis of the global hydropower fleet shows that the average age of hydropower plants is 40 years old. The average service life of retired hydropower plants is 60 years. The agency calls for a modernisation of plants to fit the requirements of contemporary power systems.
Due to climactic risks associated with extreme weather events, existing plants will need to be assessed and potentially retrofitted, according to IRENA.
Africa, Asia, the Middle East and South America have considerably younger hydropower fleets, mostly installed in the last 30 years, when compared with Europe, North America and Oceania.
Additionally, IRENA states that most hydropower potential lies in developing countries, where institutions financing new hydropower plants will need to work alongside local governments and communities to harness potential.