The Hydro Industry’s Future: Development and Sustainability

The Hydro Industry’s Future: Development and Sustainability

As the world moves towards a more sustainable energy mix, find out how this versatile source of energy is adapting and positioning itself for growth. Discover the future of the hydro industry with our comprehensive article. Learn about the latest trends, upcoming developments, and investment opportunities in hydropower.

Hydropower has been a safe and reliable way to get energy for more than 100 years. It is a versatile source of energy that can be used for many things, like making electricity, watering crops, and stopping floods.

In the last few years, the hydro industry has gone through a lot of changes and improvements, and it is still changing quickly. As we move towards a more sustainable future, hydropower is becoming a more important part of the energy mix around the world.

In this article, we’ll talk about trends, what’s going to happen in the future, and ways to invest in the hydro industry. We will look at how the industry is adapting to new technologies and concerns about the environment, as well as how it is setting itself up for growth in the future.

Whether you own a business, are an investor, or are just interested in the future of energy, this article will help you understand how the hydro industry is doing now and what its future looks like.

Let’s look at the future of the hydro industry from three main points of view: trends, what will happen in the future, and investment and growth opportunities.

We will look at the most recent trends in the industry, such as the use of new technologies and the focus on being environmentally friendly.

We will also look at things that could happen in the future, like pumped storage hydropower and improvements to hydroelectric turbines.

We will also talk about investment and growth opportunities in the industry, such as expanding into new markets and working together with other industry players.

Overall, this part is meant to show how the hydro industry is doing now and what it looks like for the future.

Decentralization and Decarbonization

New technologies and concerns about the environment are changing the way energy is made and distributed, which is having a big effect on the hydro industry. The future of the hydro industry is being shaped by two major trends: decentralisation and getting rid of carbon.

Decentralization means moving away from a system where power is made in one place to one where power is made closer to where it is used.

This trend is being driven by improvements in renewable energy technologies like solar and wind power that make them more efficient and cost-effective.

Because of this, the amount of renewable energy in the world’s energy mix is growing, and the hydro industry is changing to keep up with this new reality.

The goal of decarbonization is to reduce carbon emissions and slow down climate change. This is done by switching to cleaner and more sustainable energy sources.

Since hydroelectric power is a renewable and low-carbon source of energy, the hydro industry is in a good position to make a big difference in the fight against climate change.

In fact, the International Energy Agency (IEA) says that in 2021, hydropower will make up more than 16% of the world’s electricity production, making it the largest source of renewable energy.

The hydro industry is using new technologies and methods to keep up with these changes. For instance, some hydroelectric plants are getting new turbines that are more efficient and can make more electricity.

Also, new pumped storage hydropower systems are being made, which can help integrate renewable energy sources that have different outputs into the grid and store energy when demand is low.

Sustainability and the environmental concern are also getting more attention in the hydro industry. In a lot of countries, new hydroelectric projects have to go through strict environmental reviews and follow strict rules.

Also, more and more people are realising how important it is to protect ecosystems and biodiversity near hydroelectric facilities, such as by keeping fish habitats and limiting the damage to river ecosystems.

In the end, the hydro industry is changing a lot as it adapts to new technologies and concerns about the environment. The future of the industry is being shaped by two major trends: decentralisation and decarbonization.

The hydro industry is in a good position to play a big role in decarbonization efforts. The hydro industry can continue to provide a reliable and sustainable source of energy for many years to come if it uses new technologies and practises and focuses on sustainability.

Hydrogen Production using Hydroeletric power

Hydrogen has been identified as a key part of the move towards a low-carbon economy around the world. It can be made from a number of different sources, such as hydroelectric power, and is a versatile and efficient energy carrier.

In this section, we’ll talk about how the production of hydrogen could be a big part of how the hydro industry grows in the future.

Hydropower is a green way to make hydrogen. The electricity made by hydropower is used to power an electrolyzer, which breaks water molecules apart into hydrogen and oxygen.

This process is called electrolysis, and it can be done either with a proton exchange membrane (PEM) or with an alkaline solution.

Hydrogen made from hydropower has the potential to make a big difference in cleaning up the transportation sector, which is responsible for about 24% of the world’s greenhouse gas emissions.

Hydrogen fuel cell cars don’t make any emissions other than water vapour. This makes them a clean and environmentally friendly alternative to cars that run on gasoline.

Also, heavy-duty vehicles like trucks, buses, and trains can use hydrogen as a fuel source.

The International Energy Agency (IEA) says that by 2050, hydrogen made from renewable sources like hydropower could meet up to 13% of the world’s energy needs and could cut CO2 emissions by up to 6 Gt per year.

This is a big chance for the hydro industry to play a key role in the energy transition around the world.

Before hydrogen production can become a big business, though, there are a few problems that need to be solved.

One of the biggest problems is that electrolysis costs a lot, which makes making green hydrogen more expensive than making hydrogen in other ways.

There is also a lack of infrastructure for distributing hydrogen, which makes it hard to move and store large amounts of hydrogen.

Even with these problems, there have been a lot more investments in making hydrogen in the last few years. In 2020, more than $1 billion was spent on hydrogen-related projects around the world, and this number is expected to rise in the years to come.

Several countries have also announced big plans to make more hydrogen from renewable sources, like hydropower, on a larger scale.

For example, Norway has said it wants to build a 5 GW electrolyzer facility powered by offshore wind and hydropower. This would make it the world’s largest green hydrogen production facility.

The U.S. Department of Energy wants to bring the cost of making green hydrogen down to $1 per kilogramme by 2030. This would make it competitive with other ways of making hydrogen.

Hydrogen shot- seek to reduce the cost of clean hydrogen


Hydrogen Shot | Department of Energy

In conclusion, making hydrogen with hydropower has the potential to be a big part of the global shift to cleaner energy.

Even though there are problems that need to be fixed, the hydro industry has a bright future, as shown by the growing investments in making hydrogen and the big plans that several countries have announced.

The hydro industry is an important part of meeting the world’s growing energy needs and reducing greenhouse gas emissions because it is a reliable and sustainable source of energy.

Electrification of Transportation using hydropower

A big chunk of the world’s greenhouse gas emissions come from the transportation sector, and reducing these emissions is a top priority for many governments and organisations. The electrification of transportation is a possible solution.

This means replacing cars that run on fossil fuels with electric cars (EVs) that run on electricity from renewable sources like hydropower.

This article will talk about the current state of electrification in transportation, its possible benefits, and the problems that need to be solved to speed up its adoption.

Where things stand now with electric vehicles: Even though the number of EVs has been growing quickly in recent years, they still only make up a small part of the world’s fleet of vehicles.

The International Energy Agency (IEA) says that there will be about 10 million EVs on the road by 2020, which is only 1.5% of the world’s fleet of vehicles. But the growth of EV use has been speeding up, and despite the pandemic, sales of EVs around the world will rise by 43% in 2020.

Then came 2021, which broke records. From 2021 to 2022, the number of electric cars sold doubled, going from 3.75 million to 6.75 million. In 2021, more electric vehicles were sold in one week than in the whole of 2012.

During the years 2020 to 2022, sales in most mature auto markets went down twice.


Hydropower is already a big part of how transportation gets its power. In 2019, about 3% of the energy used for transportation around the world came from hydropower.

But hydropower has a much better chance of helping electrify transportation as EVs become more popular and the amount of electricity used by transportation goes up.

Possible Benefits of Making Transportation Electric

Transportation that runs on electricity could have a number of benefits, such as:

Reduced greenhouse gas emissions: Electric vehicles (EVs) put out a lot less greenhouse gas than cars that run on fossil fuels, which can help slow down climate change.

Better air quality: Electric cars don’t have tailpipe emissions, which can help clean up the air in cities.

Reduced reliance on fossil fuels: By moving away from fossil fuels, electrifying transportation can help make prices and supplies of fossil fuels less volatile and uncertain.

Increased energy efficiency: Electric motors are much more efficient than internal combustion engines, which can help reduce energy waste and save money on fuel costs.

Problems to Deal With

Even though electrifying transportation has a lot of potential, there are a few problems that need to be solved before it can be used more quickly.

High initial costs: Right now, electric cars are more expensive than traditional cars, which can stop some people from buying them.

Limited charging infrastructure: There is still not a lot of charging infrastructure in many places, which can make it hard for EV owners to drive long distances or charge their cars when they are not at home.

Range anxiety: Many consumers worry about the limited range of electric vehicles, which can make them hesitant to switch from traditional vehicles.

Renewable energy isn’t always easy to find. For example, hydropower can be a big source of renewable energy for transportation, but there aren’t many good places for it and building new hydropower facilities can hurt the environment.

Conclusion: The electrification of transportation is a big chance to cut greenhouse gas emissions and improve air quality, while also making us less dependent on fossil fuels and using less energy.

Even though there are problems to solve, the growing number of electric vehicles (EVs) and the availability of renewable energy sources like hydropower suggest that electrifying transportation is a good way to go.

The Future of Hydroelectricity: Small, Modular, and Offshore

Small Hydroelectric Power Plants

As more and more people want to use renewable energy sources, the hydro industry is looking for new and creative ways to make power. The focus on small hydroelectric power plants is one of these changes.

Mini hydro power plant


Small hydroelectric power plants, also called micro-hydropower plants, are defined as facilities with a capacity of less than 10 MW. Small hydroelectric power plants don’t need big dams and reservoirs like big hydroelectric power plants do.

Instead, they can be built on smaller streams and rivers. This means that they are better for the environment and less expensive than large hydro projects.

The International Energy Agency (IEA) says that small hydropower projects, especially in developing countries, have a lot of room to grow.

The International Energy Agency (IEA) thinks that there is room for 140 GW more of small hydropower capacity around the world, with most of this space in Asia, Africa, and Latin America.

Small hydropower plants are good for more than just the environment and the budget. They can also help local communities, especially in rural areas, make more money.

Small hydropower projects can create jobs in the area and give remote communities a reliable source of electricity.

Small Hydro Power Plant


The Gobarau Mini Hydro Power Plant in Nigeria is a good example of a small hydropower project that worked well. The project, which has a capacity of 1.5 MW and was finished in 2016, has given reliable electricity to more than 1,500 local homes [3, 4].

But there are still problems to solve when it comes to building small hydropower plants. These include getting permits and money for projects and dealing with environmental issues related to building new facilities.

Even with these problems, the hydro industry is likely to put more attention on small hydroelectric power plants in the future.

Small hydropower projects are a good choice for countries that want to increase their renewable energy capacity because they can lead to growth and economic benefits.

Modular and Prefabricated Hydroelectric Power Plants

In the hydroelectric industry, modular and prefabricated hydroelectric power plants are becoming more and more popular. These types of plants are built off-site in modular units or prefabricated sections that are then moved to the installation site and put together.

This method has a lot of advantages over traditional construction on-site, such as shorter building times, lower costs, and better safety.

Modular & Fabricated Hydro Power Plant


The fact that modular and prefabricated hydroelectric power plants can be built quickly is one of their best features. The time it takes to build a plant is greatly cut down when most of the parts are built away from the site.

This means that these kinds of plants can be up and running much faster than traditional plants, which can take years to build.

Traditional plants are also more expensive than modular and prefabricated plants. By building parts away from the place where they will be used, manufacturers can take advantage of economies of scale and lower the costs of materials and labour.

Also, companies can lower the overall cost of a project by making the building process more efficient.

Better safety is another benefit of modular and prefabricated plants. Since most of the building is done off-site, there are fewer workers at the installation site, which can lower the risk of accidents and injuries.

Muskrat Fall


Small projects are not the only ones that can use modular and prefabricated plants. In fact, several large-scale hydroelectric power plants have been built using this approach.

For example, the 360 MW Muskrat Falls hydroelectric power plant in Canada was built using modular construction techniques. More than 95% of the parts were built away from the site.

The plant was finished in just over four years, which is a lot faster than large hydro projects usually take.

There are also environmental benefits to modular and prefabricated hydroelectric power plants. Since most of the building is done off-site, less damage is done to the ecosystems and wildlife in the area. Also, companies can reduce a project’s carbon footprint by cutting down on the time it takes to build.

Even though modular and prefabricated hydroelectric power plants have benefits, there are still problems that need to be solved. One of the biggest problems is getting the parts to the place where they will be put together. Large parts, like turbines and generators, can be hard to move, especially to places that are far away.

In the end, modular and prefabricated hydroelectric power plants are much better than traditional on-site construction in many ways.

Because of how quickly they can be built, how cheap they are, how much safer they are, and how good they are for the environment, these types of plants are likely to become more popular in the hydro industry.

Offshore Hydroelectric Power Plants

Offshore hydroelectric power plants are a fairly new and innovative technology that could make a big difference in how much energy the hydro industry can produce.

Most of the time, these plants are built in the ocean and use the power of ocean currents or waves to make electricity.

Offshore Hydropower Plant


One of the good things about offshore hydroelectric power plants is that they can produce a lot of energy. Since ocean currents and waves are constant and predictable sources of energy, offshore hydroelectric power plants can make electricity all the time.

This is different from wind and solar energy, which depend on the weather. Some estimates say that the global potential for ocean energy is more than 1,000 terawatt-hours per year, which is more than the amount of electricity the world uses right now.

When compared to other ways of making energy, offshore hydroelectric power plants also have a small effect on the environment. They don’t release greenhouse gases or other pollutants, and they only take up a small amount of space.

This means that large areas of land don’t have to be cleared to build them. Offshore hydroelectric power plants can also be used as artificial reefs to give marine life a place to live.

Even with these pros, offshore hydroelectric power plants have to deal with a number of problems. One of the biggest problems is that it costs a lot to build and keep up.

Building a power plant in the ocean takes special tools and materials, and keeping it running can be hard and expensive because the ocean is a harsh place.

Another problem is that it could hurt marine life. When offshore hydroelectric power plants are built and run, they can disrupt the natural habitats of marine animals, which could hurt them.

Studies, on the other hand, have shown that offshore hydroelectric power plants don’t have a big effect on marine life and that this effect can be lessened with good planning and management.

Even with these problems, offshore hydroelectric power plants are becoming more popular as a clean and renewable source of energy.

As technology gets better and the cost of building and maintaining offshore hydroelectric power plants goes down, they could become a major source of energy for the hydro industry and help make the future of energy more sustainable.

Partnering for Success: Public-Private Collaboration to Fuel Hydro Industry Investment

Government Incentives and Policies

There are a lot of problems facing the hydro industry right now, from environmental and social issues to technical and economic ones. But even with these problems, there are still chances for investment and growth in the industry, especially with the help of government policies and incentives.

Governments all over the world are becoming more aware of how important renewable energy sources are, and many are putting in place policies to encourage people to invest in the hydro industry.

In the United States, for example, the Federal Energy Regulatory Commission (FERC) has put in place a number of policies to help develop hydropower.

These policies include making it easier for developers to get licences and giving them money if they build new hydro projects.

In a similar way, Canada’s federal government has promised to help the hydro industry grow. In 2018, the Canadian government said it would invest CAD 1.4 billion in renewable energy projects, such as hydroelectric ones. This investment is expected to lead to new jobs and help the sector’s economy grow.

In Europe, the European Union (EU) has set high goals for its member states when it comes to renewable energy. The EU’s Renewable Energy Directive says that by 2030, member states must get at least 32% of their energy from renewable sources.

This has increased the need for renewable energy, like hydroelectric power, and opened up investment opportunities in the field.

In addition to government policies, technological advances also create growth and investment opportunities in the hydro industry. For example, improvements in turbine technology and control systems are making hydroelectric power more efficient and cost-effective.

These improvements should help solve some of the technical problems facing the industry and make investing in hydroelectric power a better idea.

Even though the hydro industry faces problems, there are clear chances for investment and growth, especially as government policies and technology improve.

As the world keeps moving towards renewable energy sources, the hydro industry is set to keep growing and changing.

Public-Private Partnerships

People often see the hydro industry as a key part of the move towards a more sustainable and low-carbon future. But it can be very hard for governments, especially in developing countries, to pay for big hydroelectric projects. Public-private partnerships are one possible solution (PPPs).

PPPs are a way for the public and private sectors to work together to reach the same goals by combining their resources and skills. In the hydro industry, public-private partnerships (PPPs) can involve the private sector giving money and expertise to build and run hydroelectric facilities, while the government gives regulatory oversight and access to land and resources.

PPPs could help solve some of the problems that the hydro industry is facing. For example, by bringing in private investment, PPPs can help get around financing problems that could stop big hydro projects from being built.

The private sector can also bring expertise in project management and construction, which can help make sure that projects are finished on time and on budget.

In the hydro industry, there are a number of examples of PPPs that work well. The Nam Ngiep 1 Hydropower Project in Laos, for example, is a PPP between the government of Laos and a group of private companies.

The project, which has a capacity of 290 MW, is expected to bring in a lot of money for the Lao government and give the country’s fast-growing economy reliable electricity.

In the same way, the government of Indonesia and a group of private companies work together on the Sarulla Geothermal Power Plant.

The project is the largest geothermal power plant in the world, with a capacity of 330 MW. It is also expected to make a big difference in Indonesia’s ability to use renewable energy.

But PPPs don’t work perfectly all the time. For example, there may be worries that private companies will put making money ahead of caring about the environment and people.

PPPs can also be hard to set up because they are complicated, especially in countries with weak regulatory frameworks.

To deal with these problems, governments need to make sure that PPPs in the hydro industry follow clear rules and guidelines. This can include requirements for environmental and social impact assessments, as well as steps to make sure that all stakeholders get a fair share of the benefits of hydro projects.

Even with these problems, governments and private companies are interested in PPPs because of the benefits they could bring.

By working together, the public and private sectors can take advantage of each other’s strengths to speed up the growth of the hydro industry and help make the future more sustainable and low-carbon.

Green Bonds and Sustainable Financing

In the past few years, investors have become more interested in green bonds and sustainable financing as a way to help fund projects that are good for the environment.

Even the hydro industry isn’t an exception. Many hydro projects are funded through green bonds and other ways that are good for the environment.

Green bonds are a type of bond that helps pay for projects that are good for the environment. Most of the time, companies, governments, or organisations issue these bonds, and the money they bring in is used to fund projects that meet certain environmental criteria, like reducing carbon emissions or promoting renewable energy sources.

In recent years, green bonds have become more and more popular. In 2020, the global market for green bonds will reach a record $269.5 billion.

Most of the money from green bonds has gone to the hydro industry. In 2019, it was announced that a hydro project would receive the largest green bond ever given out.

The Brazilian Development Bank sold the bond, which brought in $1.6 billion to pay for the building of the Belo Monte hydropower plant. With a capacity of 11,233 MW, the Belo Monte project is one of the largest hydro projects in the world.

Green bonds aren’t the only way the hydro industry has gotten money. Sustainability-linked loans are another way the industry has gotten money.

The interest rate on these loans is tied to how well the borrower does in terms of sustainability. If the borrower meets certain sustainability goals, like lowering greenhouse gas emissions, the loan’s interest rate may go down.

This gives borrowers a reason to improve their sustainability, which can lead to projects that are better for the environment.

The Nam Ngiep 1 hydropower project in Laos is an example of a hydro project that got money from a loan tied to sustainability. In 2019, a group of international banks gave the 290 MW project a 200 million dollar loan that was tied to sustainability.

The loan is based on how sustainable the project is, and the interest rate is based on how the project affects the environment and people.

Sustainable ways to get money, like green bonds and sustainability-linked loans, are good for the environment and can also help investors make money.

Investors are willing to pay more for investments that support projects that are good for the environment, so green bonds and other types of sustainable financing can often give higher returns than traditional bonds.

But there are problems that make it hard for the hydro industry to use sustainable financing methods on a large scale. One problem is that there are no set rules for what makes a project “green” or sustainable.

This can make it hard for investors to figure out how their projects will affect the environment. Also, hydro projects need to be more open about how they affect the environment and report on this.

In spite of these problems, the hydro industry is likely to continue to use green bonds and other sustainable ways to raise money. As the need for renewable energy sources grows, investors are likely to look for ways to support projects that are good for the environment.

In conclusion, the hydro industry has seen trends of decentralisation and decarbonization, which have led to opportunities in small hydroelectric power plants and the electrification of transportation.

Small hydroelectric power plants and green bonds, which are a type of green financing, are the key to the industry’s future.

Small hydroelectric power plants can get help from the government in the form of regulations and money.

In the past, the industry has had trouble with high capital costs and environmental concerns that come with big projects.

To deal with these problems, the industry must keep growing in a sustainable way by putting money into small hydroelectric power plants and using sustainable ways to pay for growth.

Governments and business leaders must work together to create a regulatory and financial framework that supports sustainable development.

By doing these things, the hydro industry can continue to grow and help meet the world’s energy needs in a big way.

The views expressed in this article are the author’s own and do not reflect WorldRef’s views, opinions or policies.

As the hydro industry continues to evolve and embrace sustainable practices, partnering with a reliable and experienced service provider becomes crucial.

At Worldref, we provide a wide range of solutions designed to optimize hydro power operations and promote sustainability across 75+ countries.

Explore our industrial solutions to hydro power for technical consulting and project management to supply chain optimization and digital transformation, our services are aimed at driving efficiency, reducing costs, and maximizing the potential of hydro power.

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