At US$0.05/kWh, hydroelectricity remains the lowest-cost source of electricity worldwide, according to a recent report by the International Renewable Energy Agency, entitled Renewable Power Generation Costs in 2017.
The global weighted average levelized cost of electricity from new projects commissioned in 2017 was US$0.05/kWh from hydropower, compared with US$0.06 for onshore wind, $0.07 for bioenergy and geothermal projects and $0.10 for utility-scale solar photovoltaic. Hydroâ€™s LCOE varies regionally, with 2016-2017 values being $0.04/kWh in Asia, $0.05 in South America, $0.06 in North America, $0.07 in Africa, Eurasia and the Middle East, $0.10 in Central America and the Caribbean and $0.12 in Europe.
Although electricity from hydropower is already cheaper than fossil fuels, the report indicates costs for other renewables should drop, as technology improves. â€œElectricity from renewables will soon be consistently cheaper than from fossil fuels,â€ the report says. â€œBy 2020, all the power generation technologies that are now in commercial use will fall within the fossil fuel-fired cost range, with most at the lower end or even undercutting fossil fuels.â€
Despite its positive benefits, hydropower development activity lags that of other renewables, the report says. New capacity additions of renewables in 2016 was 162 GW, coming from solar photovoltaic (71 GW), wind (51 GW), hydropower (36 GW), bioenergy (9 GW) and concentrating solar, geothermal and marine (1 GW).
Additionally, hydropower â€œis the largest source of renewable electricity generation today,â€ at 3,996 TWh in 2015. However, its share has been declining over time, IRENA, says, with hydro capacity accounting for about 75% of the worldâ€™s total renewable capacity in 2010 but only about 50% in 2016. In terms of electricity production, hydro accounted for 81% of all electricity from renewables in 2010 but 70% in 2016.
An entire section of the report goes into greater detail on hydropower, with additional analysis of its benefits and attributes. It does recognize the value pumped storage hydro provides for energy storage, with more than 96% of the total energy storage capacity globally provided by pumped storage. â€œFor now, pumped hydro is still the only technology offering economically viable large-scale storage,â€ the report says. â€œThe importance of pumped hydro storage, and indeed reservoir hydropower, is likely to grow over time as the shift to a truly sustainable electricity sector accelerates, not just for the low-cost storage it provides, but for the flexibility it brings to integrate high levels of variable renewables at minimal cost.â€
IRENA is an intergovernmental organization that promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind.
Click here to view the report in its entirety.