Hydropower is currently by far the largest source of renewable energy, with greater production than both wind and solar combined. According to the International Energy Agency (IEA), hydropower is expected to double by 2050. However, hydro’s most important role in the future will be to ensure the integration of variable renewable energy sources from wind and sun into the grid.  

As a result of a massive transition from fossil sources to renewable energy, there will be a significant need for balancing and energy storage on time scales ranging from seconds to days, weeks and seasons. These solutions must be developed based on needs in the power grid, adaptation to markets, and optimal production planning.

One of the most significant advantages of hydropower is its flexibility, which allows for rapid response to demand changes and is essential for maintaining system reliability. This capability allows hydro to compensate for fluctuations in electricity supply, resulting in a more stable grid.

Hydropower can quickly ramp up production when electricity demand increases or when wind and solar power generation declines—such as during low wind speeds or at night. This rapid response is essential for maintaining system reliability, preventing blackouts, and ensuring that renewable energy sources can be integrated without compromising grid stability. It also supports frequency regulation, voltage control, and other grid-balancing services.

In addition, hydropower offers long-term energy storage capabilities. Unlike battery storage, which is typically designed for short-duration balancing, hydro can store energy over weeks or even months, making it vital for seasonal energy balancing. This is especially relevant in regions with significant seasonal variations in wind and solar generation, where reservoirs can serve as long-term energy banks. Pumped storage hydro represents well over 90% of all grid-connected energy storage.

Unrealised hydropower potential in the world is mainly found in Asia, Latin America and Africa, but there is also still some potential left in Europe and North America. However, Europe and North America also have an ageing hydropower fleet that needs to be upgraded through refurbishment, expansion and modernisation. It is therefore important to use the opportunity to make hydropower fit for future markets and at the same time making hydropower more sustainable and increase societal acceptance.

Despite its many benefits, hydropower development is not without challenges. One of the most pressing concerns is its impact on river ecosystems, biodiversity, and local communities. Dams and reservoirs can alter natural water flow, affect fish migration, and change sediment transport patterns, leading to long-term ecological consequences.

In many countries, environmental regulations have been introduced to mitigate these impacts while allowing hydropower to contribute to the energy transition. In Norway, for example, regulations mandate that a certain amount of water must always flow through river systems to preserve biodiversity. While this benefits aquatic ecosystems, it can reduce the flexibility of hydropower plants in managing electricity generation. Similarly, new requirements for fish migration have led to investments in fishways and bypass channels to facilitate safer passage past hydropower structures.

In Europe, the Water Framework Directive sets stringent conditions for water management, affecting how hydropower projects are developed and operated. Similar environmental standards in the United States and Canada aim to balance energy production with conservation goals. These regulations strongly emphasize sustainable hydropower operations while maintaining energy security.

One key question in hydropower today is how high-capacity hydropower can be produced while minimising environmental impacts. The answer lies in adopting innovative approaches and leveraging new technologies.

More precise environmental impact assessments can help identify the best locations for new hydropower developments, ensuring they are built in areas that can ensure minimal ecological disruption. Modernising existing hydropower plants also presents significant opportunities for increasing efficiency without requiring the construction of new, large-scale dams. Upgrading turbines, improving water management techniques, and integrating digital monitoring systems can enhance production capacity while preserving ecological integrity.

A critical factor in the future of hydropower is the predictability of environmental regulations and investment conditions. Hydropower projects are long-term investments, often with operational lifespans exceeding 50 years. Uncertain or frequently changing regulations can create challenges for operators and investors, potentially slowing the transition to a more renewable-based electricity system.

Clear and predictable environmental policies at national level are essential to ensure sustainable development. These policies should guide how hydropower can be expanded while maintaining ecological balance, and they should offer stable conditions for long-term investments in both new projects and the modernization of existing facilities.

Looking ahead, hydropower will continue to be a cornerstone of the clean energy transition, but its success will depend on the ability to balance energy production with environmental stewardship. Several key developments will shape the future of hydro on an international scale:

• Enhanced cooperation between policymakers, researchers, and industry stakeholders: A shared understanding of hydro’s benefits and challenges will help shape effective regulations supporting energy security and environmental sustainability.

• Investments in modernization: Upgrading existing plants with more efficient turbines, improved water management systems, and digital control technologies will allow for increased energy production with reduced environmental impact.

• Hybrid renewable energy solutions: Integrating hydropower with other renewables, such as floating solar panels on reservoirs, can enhance overall energy production while utilizing existing infrastructure.

By leveraging these advancements, hydropower can maintain its role as a key enabler of the green transition – providing reliable, flexible, and sustainable energy that supports the expansion of wind and solar power worldwide.