The dry, mountainous geography of South and Central Asia makes wind or solar deployment more difficult. The potential for significant hydropower growth in the region is enormous, and many countries have included plans to substantially upscale their hydropower capacity in the coming decade. As many countries look to shift from their fossil fuel reliance, hydropower will provide much of the necessary renewable dispatchable generation both to protect water supplies amidst droughts affecting the region, and on the other end of the spectrum flash flooding due to high rainfall.
Amid large-scale projects under construction across the region, many of the commissioned hydropower additions this year came from small hydropower sites in rural communities. Large-scale hydropower projects are either an important component of existing grid infrastructure or a critical part of energy transition strategies.
However, droughts have increasingly impacted the region’s hydropower abilities. Iran’s Water Authority noted that the height of rainfall in the country decreased by 35.5 per cent in comparison to the previous year, impacting its hydropower capacity and there have been periodic protests over a decades-long drought impact on the population. Likewise, in Sri Lanka, significant outages and protests followed power cuts in part due to prolonged drought. In Kyrgyzstan, drought has significantly impacted reservoir in-flows even as energy demand has increased by 9.9 per cent. Severe dust storms mixed with drought struck Uzbekistan in November 2021 and caused the hydropower output to fall by 23 per cent.
Modernisation of existing infrastructure will be critical for the region in the years ahead, as many hydropower projects are 30-40 years old. Some countries, including Uzbekistan and Kyrgyzstan, have announced plans to modernise their existing hydropower assets to increase installed capacity and ensure energy security. Jordan has identified its existing hydropower assets for modernisation requirements and pumped storage hydropower (PSH) as a potential route for the country’s growing energy storage needs. In Russia, the installed capacity increased by more than 165 MW in 2021 due to modernisation works that were completed at Ust-Srednekanskaya HPP, Nizhegorodskaya, Irkutsk, Barsuchkovskaya, and Votkinskaya.
In January 2022, a region-wide blackout saw power disruption across Tajikistan, Uzbekistan and Kazakhstan due to outages that started in Uzbekistan following a short circuit in a 500kV high voltage overhead line. The outage took place amid a week of protests in Kazakhstan, which started over the price of liquified petroleum gas.
Regional interconnectivity is a critical issue. Many hydropower-rich countries rely on transmission networks to export power to neighbouring countries that are experiencing escalating energy demands. As part of this, work on the CASA-1000 project continues; substantial preliminary construction has taken place in Kyrgyzstan, and the Tajikistan section is close to completion. This high-voltage power transmission line will run through Kyrgyzstan, Tajikistan, Uzbekistan, Afghanistan and Pakistan.
Increasing grid connectivity will be an important means to ensure energy security and increase access to electricity for rural communities across the region, especially for small hydropower projects. Delays in transmission networks have meant that some hydropower projects have completed construction, but are not yet connected to the grid and so are unable to provide energy services, such as the 30 MW Nyadi hydropower projects, 27 MW Dordi Khola and 12 MW Dordi I HPPs in Nepal.
Energy consumption and demand is growing annually across the region, and to date much of the energy security relies on interconnected grids. To combat the increasing energy generation requirements, the US Agency for International Development (USAID) announced a US$39 million five-year regional program, “USAID – Energy in Central Asia”, to help countries such as Tajikistan receive economic benefits from cross-border energy trade and improve energy security through greater regional integration. For Tajikistan in particular, this will include hydropower development.
Regional partnerships are growing and an important component to decarbonising existing grids as well as improving regional energy security. For example, there have been agreements for cooperation between Nepal and India over transmission networks and hydropower assets. In June 2021, Tajikistan and Uzbekistan signed an agreement to establish a joint stock company, preparing a feasibility study for the construction and operation of two hydropower plants in the Zeravshan river basin. While its hydropower potential is limited, Bangladesh is planning to phase out ten coal-fired power plants, and will improve transmission network links to Nepal and India as they have significantly hydropower-intensive grids. Bangladesh also announced its intention to invest US$1 billion in a mega-hydro project in Bhutan, as well as investing in hydropower plants in Nepal.
The governments of India and Pakistan met on several occasions to discuss water access rights and a treaty as part of the Permanent Commission on Indus Waters, and subsequently the World Bank announced it would be resuming the two separate processes requested by India and Pakistan in relation to the 330 MW Kishenganga and 850 MW Ratle hydroelectric power plants, in line with its responsibilities under the Indus Waters Treaty, which had been delayed since 2016.
India saw the largest increase in total installed capacity during 2021, with just over 800 MW new operational installed capacity, including Units III and IV of Kameng Hydropower Station adding 300 MW, as well as Rongnichu adding 113 MWs in June 2021 and Sorang 100 MWs in September 2021. Numerous hydropower projects are at early development stages across the country, including the 300 MW Lakhwar multipurpose project, first conceptualised in the 1970s, and in December 2021 Prime Minister Modi laid the foundation stone at the site. The same month, India’s Cabinet approved Ken-Betwa, the first project for interlinking rivers under the National Perspective plan to help drought areas, which will include a 106 MW hydropower facility.
To support its renewable energy deployment, India has been working on an energy storage policy framework that will be launched later in 2022 and emphasises the importance of pumped storage hydropower for its variable renewable energy deployment.
Nepal’s 456 MW Upper Tamakoshi project commissioned in 2021 represents the largest project and significantly increased Nepal’s installed capacity. The Investment Board of Nepal noted the country’s immense economic potential hydropower capacity of 43 GW and released a guide to enable foreign investment.
In Russia, the Sayano-Shushenskaya and Zeiskaya hydropower plants set new all-time high annual record outputs, up by 10.4 per cent and 37.9 per cent respectively. Their substantial increase in generation was partially because water inflows to reservoirs in Siberia, the Far East and Northern Caucasus were above the normal level and, similarly, the generation of hydropower plants in the South increased by 5.1 per cent in the fourth quarter of 2021.
Covid-19 continued to cause significant project delays across the region for commissioning. For example, Pakistan’s 720 MW Karot run-of-river scheme was due to be commissioned in 2021 and is now planned for 2022. In 2021, Pakistan announced hydropower as a critical part of its net zero strategy. The Water and Power Administration of Pakistan declared a “decade of dams” that would see the country doubling its existing 9,000 MW capacity by 2029 through ten new projects. In addition to the decade of dams, the government launched Pakistan’s first green Eurobond, called “Indus Bond”, to finance the construction of the 4,800 MW Diamer Bhasha and 800 MW Mohmand dams. The Indus bond seeks to raise US$500m with a 7.5 per cent interest rate floated over ten years.
In 2021, Bhutan published a national sustainable hydropower plan that noted the economic potential for 37 GW, generating roughly 154 TWh. As part of the strategy, it was noted that hydropower is the “raison d’être for fulfilling the country's aspirations of social wellbeing and economic prosperity” by providing universal access to sustainable energy and reducing poverty.
The Hashemite Kingdom of Jordan is aiming to increase renewables’ share of electricity generation by 2030, and announced in 2021 that USD 846.2m will be spent to build hydropower plants, with prequalification bids for small hydropower projects already announced.
Georgia released an energy strategy document that outlines an ambition to double its hydropower capacity over the next decade, from 3,300 MW in 2019 to 6,536 MW in 2030. The strategy includes a contract for difference policy mechanism to assist private investment in the hydropower sector.
In Uzbekistan, 76 MW new hydropower capacity was added in 2021. The "Development Strategy of New Uzbekistan for 2022–2026", launched in 2021, emphasised green energy and projected that Uzbekistan’s hydroelectric capacity will reach 2,920 MW by 2026. As part of the strategy, 15 new hydropower projects are planned and five existing plants will be upgraded between 2022 and 2026. In 2022 alone, seven projects with a total capacity of 173 MW will be commissioned. In 2021, Uzbekistan’s Ministry of Energy, together with the Asian Development Bank (ADB) and the World Bank, developed a ten-year plan for electricity supply in the country, setting goals and specific measures to create additional electricity capacity. With electricity demand expected to grow over the coming decade, hydropower development will be critical.
Kazakhstan installed roughly 281 MW of hydropower in 2021, including Zarchob 1 and 2. Kazakhstan’s Energy Balance 2035 Plan includes 2 GW of new hydropower projects, 6 GW of renewable generation (wind and solar), and 2.4 GW of nuclear, as well as including requirements for electricity storage systems. It aims to achieve carbon-neutral status by 2060.
The UN Environmental Programme ranked the air quality of Kyrgyzstan’s capital city Bishkek as the second worst globally, and in response the government announced it would reduce coal-fired generation and increase the installed capacity of alternative options including hydropower. In February 2022, Kyrgyzstan’s Head of Cabinet Ministers, Akylbek Zhaparov, announced plans to develop 6 GW of new hydropower projects making use of the 70 per cent of economic potential currently unrealised. To implement the proposed reforms in the draft strategy will require approximately US$14 billion by 2030. Kyrgyzstan’s Ministry of Energy has issued permits to over 90 companies for the construction of solar, wind and small hydropower plants, with the intention of building 938 MW of small hydropower.
Construction continues on the Rogun Dam in Tajikistan which has 3,600 MW planned capacity. Its current capacity stands at 600 MW after its first units were commissioned in 2018. In 2021, Tajik Finance Minister, Fayziddin Kakhhorzoda, stated that the government will continue to finance the construction of the project. Work is still ongoing for the rehabilitation of the Nurek hydropower project, the largest in Central Asia, which started in 2020 and represents roughly 50 per cent of total electricity capacity for Tajikistan. The World Bank signed an agreement in December 2021 for US$65 million for the works, and a protocol of negotiations was signed. To promote sustainable water use, Tajikistan held a National Workshop on Water Sector Reform Coordination with the UNDP, as well as International Decade for Action event across the year.