Modernisation

Hydropower plants have an operating lifespan of over 100 years, a significant portion of hydropower assets are ageing, with nearly 40% of plants globally being at least 40 years old. Rehabilitation, or modernisation, will be essential to prevent the retirement of existing units. Modernisation of hydropower assets refers to the upgrade, renovation, and digitalisation of existing hydropower infrastructure, operations, environmental practices to improve flexibility, efficiency, safety, ecological performance, and societal value without constructing new dams. Modernisation can include the renovation of critical systems and key components (e.g., turbines, generators, transformers, control systems, civil infrastructures) as well as minor maintenance a plant receives to maintain operational efficiency. Modernisation is critical to further improve energy generation, grid flexibility, and ensure that electricity demand is sufficiently met.  

Additional benefits of modernising existing hydropower fleets include increased security and reliability, reduction in environmental impacts, and reduction in outages and failures. Ongoing regulatory pressure, ecological concerns, and the limited site availability for greenfield development has shifted modernisation practices towards upgrading existing assets with fish-friendly turbines, sediment management systems, and climate resilience technologies (Wagner et al., 2019). The modernisation of hydropower plants will be crucial to ensure the stability, security, and resilience of the global energy landscape.  

Furthermore, for example, by adding capacity through unit replacement, digitalising operations to optimise use, or by better hybridisation with batteries, wind and solar power, will help meet long-term climate and energy targets. Growing variability in demand and production, in both daily and intraday, will increasingly require hydropower units to operate with greater flexibility. This includes more frequent start–stop cycles, faster ramping and extended operation beyond original design conditions.  

Modernising turbines, improving dam designs, increasing storage capacity and implementing monitoring tools will help ensure that hydropower remains relevant and capable of delivering the flexible services needed in a more dynamic power system. These upgrades will also enable operators to respond more efficiently to market volatility, positioning hydropower as a low-carbon source of both stability and value in evolving electricity markets. However, a recent study under the ReHydro project found that two key obstacles are limiting investment in modernisation: uncertainty around how electricity market will reward the role of hydropower, and the complexity of the relicensing process, which often overlaps with the need for major upgrades to ageing infrastructure. Together, these factors make it difficult for operators to commit the necessary capital. Many governments are now including modernisation in their power system planning to support integration of variable renewables.  

Countries across Central Asia, including Russia, Kyrgyzstan, Tajikistan and others, have launched or planned extensive modernisation programmes over the past decade and into the next. These efforts have resulted in notable increases in capacity from new turbine installations. Modernisation and rehabilitation are critical in ensuring that existing renewable energy and water infrastructure are prioritised, while also planning for future energy and water security. Policy that recognises and supports investment in these assets offers a cost-effective way to advance the energy transition and enable additional capacity.

As the world transitions to a net zero economy, the power sector must evolve to deliver greater system flexibility, ensure energy security, and maintain affordability. Hydropower stands out as a critical enabler of this transition, offering reliable, low-carbon flexibility amid growing market volatility. However, realising its full potential will require coordinated policy action, targeted investment, and modernisation of ageing infrastructure.