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Across the globe, a significant portion of hydropower assets are ageing, with nearly 40% of plants at least 40 years old. Rehabilitation will be essential to prevent the retirement of existing units.
Modernisation can be achieved by adding capacity through unit replacement, digitalising operations to optimise use, or by better hybridisation with batteries, wind and solar power. This will help meet long-term climate and energy targets.
Growing variability in demand and production – both daily and intraday – will increasingly require hydropower units to operate with greater flexibility. This includes more frequent start–stop cycles, faster ramping and extended operation beyond original design conditions.
Image - Z'mutt hydropower project, Switzerland. Credit - XFLEX HYDRO
Modernising turbines, improving dam designs, increasing storage capacity and implementing monitoring tools will help ensure that hydropower remains relevant and capable of delivering the flexible services needed in a more dynamic power system.
These upgrades will also enable operators to respond more efficiently to market volatility, positioning hydropower as a low-carbon source of both stability and value in evolving electricity markets.
Modernisation challenges and the policy response
A recent study under the ReHydro project found that two key obstacles are limiting investment in modernisation: uncertainty around how electricity market will reward the role of hydropower and the complexity of the relicensing process, which often overlaps with the need for major upgrades to ageing infrastructure. Together, these factors make it difficult for operators to commit the necessary capital.
Image: Røldal-Suldal Hydroelectric Facility, Norway, a ReHydro demonstration site. Credit – Kiran Bose
Many governments are now including modernisation in their power system planning to support integration of variable renewables.
Countries across Central Asia – including Russia, Kyrgyzstan, Tajikistan and more – have launched or planned extensive modernisation programmes over the past decade and into the next. These efforts have resulted in notable increases in capacity from new turbine installations.
Modernisation and rehabilitation are critical in ensuring that existing renewable energy and water infrastructure are prioritised, while also planning for future energy and water security. Policy that recognises and supports investment in these assets offers a cost-effective way to advance the energy transition and enable additional capacity.
As the world transitions to a net zero economy, the power sector must evolve to deliver greater system flexibility, ensure energy security and maintain affordability.
Hydropower stands out as a critical enabler of this transition, offering reliable, low-carbon flexibility amid growing market volatility. However, realising its full potential will require coordinated policy action, targeted investment and modernisation of ageing infrastructure.
The European power market provides a valuable case study – illustrating both the challenges and opportunities of integrating variable renewables at scale. Lessons from Europe’s experience can help inform global efforts to build resilient, sustainable electricity systems fit for the future.
