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As the cards in Brussels are being dealt anew, Europe’s hydropower industry is aiming for a greater slice of the attention pie in Brussels.
First, the good news: late 2023 and early 2024 have been a great period for the industry – plenty of rain makes for plenty of turbines to spin. The sector managed to squeeze itself into the EU’s protectionist Net Zero Industry Act by the skin of its teeth.
Positive headlines are a rare thing for the sector that contributed towards the 2022 energy crisis – production dropped by 20% from 2021 to 2022 amid widespread drought – and it was overtaken as the EU’s largest source of renewables by wind in 2019 after dominating for a century.
But it bears mentioning: 2023 saw a 15% rebound, back up to 315 terawatt-hours. 2024 is on track to meet 2021 levels of generation. Hydropower is officially back.
Yet, politically, it is not. A broad industry alliance felt forced to call on “European decision-makers to promote hydropower as a vital cornerstone of our renewable energy future,” as recently as 14 March.
“To unlock the full potential of EU hydropower, dispel prejudiced perceptions, and foster a shift towards a conversation grounded in tangible reality,” the alliance – consisting of the EU power association Eurelectric and the ten European utilities running hydropower plants – calls for ‘champions’ for its cause.
Their biggest problem? Compared to the new mainstream renewables, hydropower looks like something from the mid-1900s – flooding entire alpine valleys in the name of power and progress just doesn’t fly with voters any more.
In Austria, the nature conservation movement protesting hydropower germinated in the Greens. Since then building dams in the Alps has become a far-right talking point.
Hydropower looks like one of those sectors politicians regret – when asked, EU politicians provide plenty of lip service to its indispensable role in Europe’s energy transition, but in practice, most new EU laws scare the sector.
Brussels is actively quibbling with the largest hydropower player, France, the EU’s largest generator with a sixth of installed EU capacity at 25.4 GW – state-run utility EDF has been arguing with Brussels over who should run its hundreds of dams.
The company holds 80% of French hydropower fleet concessions, but the EU has been insisting that these should be opened to the free market. This has not gone well in Paris.
Opening France’s 447 dams to a competitive bidding process means, “to let foreign competitors operate French dams. This is not an option,” said Economy Minister Bruno Le Maire in March.
Until the stand-off is resolved, refurbishment of French dams is challenging, as it would require changes to the concessions.
The sector continues to be hounded by the fact that hydropower dams add to Europe’s fragmented waterways – despite amounting to just 5% of barriers, the industry insists.
New EU environmental rules tend to make the sector nervous. Hydropower managed to wrestle an opt-out from the contested nature restoration law with some effort.
A review of the EU’s water framework directive, even if just rumoured, can spark a frenzy of activity – similar to when a Bavarian centre-left EU Member of the European Parliament intervened on behalf of the industry in 2021, despite not sitting on a relevant committee.
The ever nervous industry has pivoted to banging the drum on its upsides: providing flexibility (via mountain basins and pumped storage facilities that provide 90% of EU storage capacity today) and green home-grown power
The sector also highlights its high degree of technological maturity, and its inertia, key to stabilising the frequency of Europe’s future power grids, and something neither solar power nor wind can sufficiently provide.
However success has been limited. Word in the Commission’s Berlaymont is that a tailor-made support strategy for hydropower is unlikely. But support for pumped hydro is likely to play a key role in future EU guidance on energy storage and flexibility.
There may be hope for the sector that always sees itself besieged. Could a new Energy Commissioner, perhaps hailing from Spain where hydropower plays an important role, be more receptive than the departed Frans Timmermans?
One thing is clear: the cards in Brussels are being shuffled, and the hydropower industry is angling for a larger share of the attention and support pie.
Historically, it hasn’t had the greatest success at getting there. But maybe this is their time?
– Nikolaus J. Kurmayer
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On our radar
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[Edited by Donagh Cagney/Rajnish Singh]
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