BHA Election Special: Hydropower and its vital role in the Energy Grid of the Future

As part of our Election series, we will be looking at the role of conventional Run of River Hydropower, and the role it plays within the grid and its potential future in helping with the looming Local Energy Crisis.

What is Run of River Hydropower?

Run of River Hydropower is a technology that has been around for centuries in one form or another, where energy is captured by utilising the flow and a drop in the height the water falls, also know as a ‘head’. This could be via an intake and a pipe or penstock or by utilising a water next to a weir. There around 1,657 total number of schemes in the country as of 2023, which have a combined power of 2 GW.

Why is Hydropower important?

In 2022, The volume of hydropower produced in 2022 reduced the wholesale cost of energy in the UK by £1.1 billion, equivalent to £38.50 per household; and if an additional 1 GW of hydropower had been built, it would have reduced the cost by £532 million, equivalent to £18.80 per household. Not only this, but as we transition to a decentralised energy grid, Hydropower will become even more important in providing low carbon, local generation. Hydropower is also uniquely situated to match the UK’s energy demand, providing winter generation when other renewables such as solar are at their lowest. More new Hydropower generation will displace peaking plant which is the most expensive and carbon energy on the UK grid.

Hydropower & Local Energy Solutions

With the rapid decarbonisation of the grid, we are pushing for greater awareness of the transition challenges at the local and rural level, to prevent communities being left behind and to enable a just transition for all. Reinforcing the entire distribution grid, including the expanse of the rural grid, to enable and meet the total demand of electrification of heat and transport will be too expensive, take too long and rural areas will not be a priority due to low population density ( we have seen this with broadband roll out).

We need proactive policy support to be ahead of the problem. There must be an aspiration to create and deliver ‘smart localised energy systems’ and Run of River Hydropower can be a key part of that. Local energy consumption needs to be met through new, small scale local generation, including Hydropower.

How to unleash Hydropower

As we approach a new election, there remains a considerable amount of UK’s Hydropower that remains untapped. The BHA is calling on all parties to consider:

• Changes to the parameters for hydropower in the Contracts for Difference (CfDs) scheme

By reducing the requirement from 5MW to 1MW, increasing the strike price slightly to £160MWh and potentially introducing a hydropower ring fenced pot, these would help Hydro to finally utilise the Contracts for Difference scheme, which it has never done despite being given a strike price in the auction rounds.

• Consideration of an ‘Enhanced’ Levelised Cost of Energy, which considers whole systems benefits

Currently, when policy makers analyse the value of all the renewable technologies, they look at the narrow parameter of Levelised Cost of Energy which does not take into account generation profile, longevity of plant, the cost of intermittency or transmission of energy to where it is consumed. To rectify this, more consideration must be given to co-benefits of each technology to ensure that the taxpayer gets the best value for money from any government assistance given to renewables.

• Consideration of how technologies such as hydropower can replace high fossil fuel generation such as coal and gas peaking plant

When considering Hydropower, many believe that it should be perceived to be in competition with renewables like Solar and Wind. However, as a winter generator, Hydropower is more likely to replace expensive and carbon intensive fossil fuels. 1GW of new hydropower could help replace 1GW of gas and diesel peaking plant.

• Review of how hydropower’s 900 GWh of storage can be enhanced and increased

Hydropower already brings 900GWh of storage to the grid and has been load balancing for many decades. Some of our oldest Hydropower has now been operating for over 100 years and has seen the rise and fall of Coal and Nuclear and with more Hydropower, we can help remove existing fossil fuels such as gas.