A new report from the Clean Energy Council details the potential of hydropower in meeting renewable energy targets, as well as the challenges ahead.

The report, Hydropower: The backbone of a reliable energy system, outlines what is needed to deliver the 19GW of dispatchable energy that will be necessary by 2040 to replace retiring coal-fired power stations.

Hydropower can rapidly ramp up its production to meet peak demand when the sun sets and solar output recedes. 

As the market continues to install higher shares of renewable energy, particularly solar, these kinds of fluctuations can be expected to increase in magnitude, with hydropower playing an increasingly important role in maintaining energy supply reliability.

Clean Energy Council Chief Executive, Kane Thornton, said, “Hydropower is one of the most mature forms of renewable generation.

“Its large energy storage capability and the essential system services it provides leave it ideally placed to thrive in a 21st-century energy system to complement the rollout of wind, solar and battery storage and drive the reliable and secure decarbonisation of the Australian energy sector.

“While these projects typically have a high upfront capital cost, investors are willing to spend the money to build new hydropower and to refurbish existing assets. 

“However, to make this investment worthwhile, investors need to know that these projects will recover their investment and receive revenue for the value they provide customers and the energy system.

“Unlocking the full potential of hydropower, therefore, requires market reforms that incentivise these services as well as strategic investment that underpins new investment and critical network expansion and augmentation to ensure strong connection and access to the energy grid.”

The International Hydropower Association estimates that the use of hydropower instead of fossil fuels for electricity generation has helped to avoid the emission of more than 100 billion tonnes of carbon dioxide in the past 50 years.

The first Australian hydropower plant was developed in 1895, with most assets built between 1951 and 1996.

There is currently around 8.5GW of hydropower capacity in operation across Australia, providing approximately 6.4 per cent of total energy demand in 2020.

In November 2021, the New South Wales Government revealed that its $50 million Pumped Hydro Recoverable Grants Program had received 11GW of proposals, or over five times the 2GW it needs to support wind and solar projects within the state’s renewable energy zones. 

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