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Actions for governments and policy-makers

Malcolm Turnbull, Former Prime Minister of Australia

Governments have an opportunity to work with industry and communities to accelerate the energy transition.

Here are five ways governments can leverage the advantages hydropower offers to build a secure, green energy system:

1. Increase the ambition of renewable energy and climate goals

The International Energy Agency (IEA) estimates global hydropower capacity needs to almost double for the world to achieve net zero by 2050, due to the clean generation, flexibility and storage it provides to energy grids.

Governments should plan for their future energy needs now, including how they will meet net zero by 2050.  

This means increasing the ambition of renewable energy and climate change goals and setting targets that specifically support sustainable hydropower as well as wind and solar energy.

Read more about hydropower’s benefits at Hydropower.org/WeCan

2. Ensure the right policy and market mechanisms are in place

Investment in renewable energy infrastructure, whether by private investors or state utilities, relies on the right policy frameworks and market mechanisms being in place.

In liberalised markets, the flexibility and storage provided by hydropower – especially pumped hydro – are not adequately recognised or remunerated. As a result, too few projects are being built to accommodate growing demand for these services from variable renewables.

Governments should consider how their regulatory systems and markets encourage and reward sustainable hydropower development.

A level playing field for all renewable energies will ensure the most efficient outcomes for society and the environment.

Read the conclusions of the International Forum on Pumped Storage Hydropower.

3. Offer financial incentives to support sustainable hydropower

According to the IEA, annual investment in hydropower needs to double to US$100 billion a year to help meet the objectives of the Paris Agreement and the Sustainable Development Goals.

Governments can support sustainable hydropower by providing financial support such as long-term power purchase agreements, feed-in tariffs, tax relief or concessional loans where needed.  

In addition, multilateral institutions should ensure that multi-donor trust funds for the development of sustainable hydropower in developing countries are well supported and funded.

Learn more about markets and finance for hydropower.

4. Explore ways to integrate and expand renewables

No country has come close to achieving decarbonisation without a significant element of hydropower.

To deliver upon the ambition of the Paris Agreement, which aims to limit the global temperature rise to 1.5°C, all renewables will need to become more closely integrated.

Governments should explore options for integrating renewable energy services and benefits by encouraging industry to upgrade existing infrastructure, retrofitting non-powered dams, and adding solar PV to reservoirs.

Governments should also recognise the benefit of using hydropower to support the growth of new green hydrogen industries.

Learn more about clean energy systems, hydropower modernisation and the XFLEX HYDRO initiative.

5. Promote the exchange of knowledge and good practices

Research and development (R&D) is essential to improve clean generation efficiency, enhance integration with variable renewables, and strengthen environmental performance.

Governments are encouraged to engage with the hydropower industry to address a range of challenges concerning climate, energy, water and conservation needs.

In addition, knowledge should be exchanged among regulators and industry about how to build hydropower sustainably, with all new projects designed, assessed and certified in line with the Hydropower Sustainability Standard.  

Learn more about the Hydropower Sustainability Standard.

Additional resources

Hydropower 2050: Identifying the next 850+ GW towards Net Zero  

International Forum on Pumped Storage Hydropower - Executive Summary

Hydropower Status Report  

The green hydrogen revolution: hydropower’s transformative role

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