Given that the energy transition involves replacing fossil fuels with carbon-free electricity, the challenge now is to find the right mix of energy sources capable of supplying increasing volumes of megawatt hours. What role should hydropower play in this energy mix?
The electrical qualities of water
Since water flows naturally down slopes, it can be used to turn turbines at virtually no cost. Hydropower therefore has similar properties to the energy produced by photovoltaic panels and wind turbines: once the fixed installation costs have been paid, production is virtually free. In terms of availability, all three technologies depend on the corresponding primary energy sources: water, solar radiation, and wind. However, hydroelectric production can be controlled if the water used to turn the turbines comes from a reservoir, which is not the case for solar and wind energy. Since water can be released to generate electricity in a matter of seconds, hydroelectric power plants are much more flexible than thermal and nuclear power plants. They therefore contribute more effectively to rebalancing the electrical system when a production unit suddenly fails. When the plant is coupled with a pumping system and two reservoirs (Pumped Storage Hydropower), water can also be used to store energy. Excess solar or wind power generation can be used to pump water and store it in high-altitude reservoirs, which can then be used to power turbines and feed the electricity grid when needed. For all these reasons, hydropower is, in principle, ideally placed to be the main source of carbon-free energy. However, its development faces two obstacles: its impact on the environment and its financing.
Hydroelectricity and the environment
In countries with significant water resources, the construction of dams to harness the kinetic energy of water is an obvious choice. This is the case in Norway, which recently announced a partnership with the US Department of Energy for a research and development program in the field of hydroelectricity. While 89% of Norway's electricity already comes from hydroelectric power (and 9% from wind power), there are plans to increase this production even further in the coming years. To this end, in February 2025, the Norwegian Parliament voted in favor of building power plants with a capacity of more than 1MW on some of the 400 or so waterways that had previously been protected. This opening up to hydropower plans is subject to conditions such as "significant" societal benefits and "acceptable" environmental consequences, a vagueness that is provoking the anger of environmental movements ready to put up fierce resistance to each of the projects under consideration. The protection of natural sites and fish populations is the first obstacle to the development of hydropower. Gone are the days when large dams could be built without concern for the environmental consequences and, if necessary, entire villages could be flooded. But this is still an acceptable option in developing countries that are more concerned with energy production than nature conservation.
Financing the projects
The construction of dams and hydroelectric power plants requires enormous amounts of capital in the short to medium term, while the profits from the sale of electricity will be spread out over the long term. The same is true of the high-voltage lines that must be installed to transport the electricity produced to the places of consumption. It is therefore difficult to put together financing packages, especially since the activism of environmentalists poses a risk to construction deadlines and the amounts to be committed. State participation is often necessary, but this carries the risk of inconsistent decisions depending on election schedules. Furthermore, financing does not stop at construction. In Europe, the average age of these facilities is 45 years, and 50 years in North America. They need to be modernized to ensure reliable production in the coming decades. Globally, the International Energy Agency estimates that investments in modernizing the oldest plants will total US$127 billion for the period 2021-2030, representing a quarter of total investments in hydropower.
Climate change and water supply
The advantages of hydroelectricity are likely to be eroded by climate change. The first reason is global warming that reduces natural storage capacity at high altitudes in the form of snow and ice. Second, with rainfall concentrated in short bursts and water running off instead of infiltrating, repeated flooding is also to be expected. This overabundance of water at certain times of the year will be accompanied by water stress at others. Public authorities will probably require dam operators to prioritize flood control and low water support, particularly for irrigation, at the expense of electricity production. Companies operating hydroelectric plants will seek compensation for losses incurred in providing this service. Conflicts over water use will multiply.
The control of dams, their use for electricity generation, irrigation, domestic and industrial consumption, river regulation, cooling of thermal power plants, recreation, and the pricing of these various uses are already the subject of intense debate. These debates are likely to become increasingly divisive in the coming decades. It is desirable that the discussion take place in calm times rather than during crises or disasters. The announcement on August 28, 2025, of an agreement in principle between the French government and the European Commission to settle the dispute over the legal status of hydroelectric power plants should help to revive investment in hydroelectricity, but many other issues raised by water use remain to be resolved.
