Massive hydropower projects are frequently criticised for causing more harm than good. What role should they really be playing in the clean energy transition and the future of hydropower?

Hydropower is by far the largest source of renewable electricity globally and is projected to grow further in the coming decades. However, some researchers have questioned the future of hydropower, concerned it could have a larger climate impact than is often acknowledged.

Studies show some hydropower plants can have emissions comparable to fossil fuel plants, adding to a long list of other problems associated with the technology, from impacts on river flow and ecosystems, to the displacement of local people. Many countries and institutions promote the expansion of hydro as a low-carbon way of meeting the world’s growing electricity demand, but can it shed its image as the dirty man of renewables?

The third renewable pillar

Water has been used as a source of energy for thousands of years, and hydro was one of the earliest forms of mechanical energy used in factories.


“Hydro has been the renewable energy technology from the purely mechanical days of grain grinding and textile mills of the mid and late-1800s,” says Robi Robichaud, a renewables expert at the World Resources Institute, a non-profit organisation based in the US. “Even as we [began] to generate electricity, hydropower was a leader in the 1890s [to] 1940s where it was available. It competed primarily against coal.”

Hydropower remains by far the largest source of renewable electricity, supplying around 16% of global power in 2019 – roughly three times the generation of wind power and six times that of solar. (It is worth noting that many environmental groups do not consider large hydropower a truly “renewable” resource due to its negative ecological impacts.)

Electricity production from hydro has increased by around two-thirds since 2000, and is expected to remain the largest source of renewable power for decades. Around 1,000 dams are under construction, largely in Asia, and the International Energy Agency (IEA) expects hydropower generation to rise another 50% by 2040. However, the recent rapid increase in wind and solar power means hydro’s share of the renewable electricity mix will drop below 50% for the first time by 2024, says the IEA.

In short, while solar and wind are the renewable superstars of the 21st century due to their rapid cost reduction and growth, hydro remains by far the largest overall source of renewable power, and will for some time. The IEA expects it will still account for 16% of the world’s electricity generation in 2025.

“They are still installing new [hydro], but they’re not going gangbusters,” says Robichaud, underlining that the best places for hydro are already taken.

China leads the world in hydro generation, followed by Canada, Brazil, the US, Russia, India and Norway which are all large producers. Hydropower is different in many ways from solar and wind, not least in its geographical distribution. The majority of dams are also not used for hydropower, but for storing water or as flood protection.

This storage ability is a key difference between hydro, and wind and solar.

Hydropower is like a big battery, you can store power in the form of water,” says Mark Mulligan, a hydro expert from Kings College London. “And then you can release the water when you want and generate your electricity on demand.”

Advocates of hydro say this storage ability makes it the ideal partner to more variable wind and solar power: water can be pumped up a dam into the reservoir when excess electricity is available and released when needed. Such pumped storage hydropower provides 94% of the world’s battery storage, even if this proportion is steadily shrinking with the rising capacity of lithium ion batteries.

There is significant interest in whether large hydropower plants could play a smaller role in global energy production. One study found that replacing all hydropower generation in the US with solar PV would use just 13% of the space of existing reservoirs.

The cost of hydropower overall remains slightly below wind and solar, shows the latest report on renewable power generation costs from the International Renewable Energy Agency (IRENA). The report found that the global weighted-average cost of newly commissioned hydropower projects in 2019 sat at $0.047 per kilowatt-hour (kWh), compared with $0.053/kWh for onshore wind, $0.115/kWh for offshore wind and $.068/kWh for solar PV.

However, while wind and solar costs are coming down year by year, globally, hydropower costs went up by 27% between 2000 and 2019 due to rising installed costs, especially in Asia. The IRENA report said this was likely due to projects being in more challenging sites, noting that nine-tenths of hydro capacity commissioned in 2019 was cheaper than the cheapest new fossil fuel-fired cost option.



While renewable energy systems are capable of powering houses and small businesses without any connection to the electricity grid, many people prefer the advantages that grid-connection offers.

A grid-connected system allows you to power your home or small business with renewable energy during those periods (daily as well as seasonally) when the sun is shining, the water is running, or the wind is blowing. Any excess electricity you produce is fed back into the grid. When renewable resources are unavailable, electricity from the grid supplies your needs, eliminating the expense of electricity storage devices like batteries.

Grid-Connection requirements from your power provider

Currently, requirements for connecting distributed generation systems—like home renewable energy or wind systems—to the electricity grid vary widely. But all power providers face a common set of issues in connecting small renewable energy systems to the grid, so regulations usually have to do with safety and power quality, contracts (which may require liability insurance), and metering and rates.

Addressing safety and power quality for grid connection

Power providers want to be sure that your system includes safety and power quality components. These components include switches to disconnect your system from the grid in the event of a power surge or power failure (so repairmen are not electrocuted) and power conditioning equipment to ensure that your power exactly matches the voltage and frequency of the electricity flowing through the grid.

Contractual issues for grid-connected systems

When connecting your small renewable energy system to the grid, you will probably need to sign an interconnection agreement with your power provider. In your agreement, power providers may require you to do the following:

Carry liability insurance — Liability insurance protects the power provider in the event of accidents resulting from the operation of your system. Most homeowners carry at least $100,000 of liability through their homeowner insurance policies (although you should verify that your policy will cover your system), which is often sufficient. Be aware, however, that your power provider may require that you carry more. Some power providers may also require you to indemnify them for any potential damage, loss, or injury caused by your system, which can sometimes be prohibitively expensive.

Pay fees and other charges — You may be asked to pay permitting fees, engineering/inspection fees, metering charges (if a second meter is installed), and stand-by charges (to defray the power provider’s cost of maintaining your system as a backup power supply). Identify these costs early so you can factor them into the cost of your system, and don’t be afraid to question any that seem inappropriate.

In addition to insurance and fees, you may find that your power provider requires a great deal of paperwork before you can move ahead with your system. However, power providers in several states are now moving to streamline the contracting process by simplifying agreements, establishing time limits for processing paperwork, and appointing representatives to handle grid-connection inquiries.

Metering and rate arrangements for grid-connected systems

With a grid-connected system, when your renewable energy system generates more electricity than you can use at that moment, the electricity goes onto the electric grid for your utility to use elsewhere. The Public Utility Regulatory Policy Act of 1978 (PURPA) requires power providers to purchase excess power from grid-connected small renewable energy systems at a rate equal to what it costs the power provider to produce the power itself. Power providers generally implement this requirement through various metering arrangements. Here are the metering arrangements you are likely to encounter:

Net purchase and sale — Under this arrangement, two uni-directional meters are installed: one records electricity drawn from the grid, and the other records excess electricity generated and fed back into the grid. You pay retail rate for the electricity you use, and the power provider purchases your excess generation at its avoided cost (wholesale rate). There may be a significant difference between the retail rate you pay and the power provider’s avoided cost.

Net metering — Net metering provides the greatest benefit to you as a consumer. Under this arrangement, a single, bi-directional meter is used to record both electricity you draw from the grid and the excess electricity your system feeds back into the grid. The meter spins forward as you draw electricity, and it spins backward as the excess is fed into the grid. If, at the end of the month, you’ve used more electricity than your system has produced, you pay retail price for that extra electricity. If you’ve produced more than you’ve used, the power provider generally pays you for the extra electricity at its avoided cost. The real benefit of net metering is that the power provider essentially pays you retail price for the electricity you feed back into the grid.