Hydropower is the largest renewable source of power generation and currently accounts for about 20% of the world’s total electricity supply. The world’s hydropower installed capacity increased at a Compound Annual Growth Rate (CAGR) of 3.1% between 2001 and 2009. Even though fossil fuels dominate electricity generation across the world, more than 60 countries use hydropower for meeting more than half of their electricity needs. The technology is the most popular renewable source of electricity generation as for various reasons, which include its ability to instantaneously respond to changing electricity demand, water management and flood control.
With global energy demand rising fast, especially in developing countries, it has become necessary to explore renewable energy sources, as conventional sources have become expensive due to the depleting supply. Small hydro provides an excellent and abundant source for power generation and does not have any fuel costs as it uses water; it emerges as one of the most promising solutions for ensuring a reliable and affordable energy supply in the long term.
Why? Well, GlobalData points out that small and mini hydropower generation plants have shorter gestation period (2-5 years) compared to large hydropower plants (7 years). Additionally, small and mini hydro gives a higher return on investment due to the low capital investment and operational and maintenance costs. Small and mini hydropower plants are easier to construct and commission due to simpler designs, thus keeping the costs down.
“Small and mini hydro facilitates community participation and capitalises on local skills for plant construction,” explains the report’s authors. Large hydropower plants require rigorous surveys, investigations and designs, which are not necessary for constructing a small and mini hydro plant. In addition to the above, construction of a small hydropower plant does not disturb the local habitat as is the case with large hydropower plants. Small hydropower installation does not involve the building of large dams and reservoirs and thus does not lead to the problems of deforestation, submergence and rehabilitation. Furthermore, it does not require a large land area and thus can be constructed in areas with small streams of water and small to medium rivers.
Annual installed capacity surged during 2004 mainly due to rise in new installations in China. Given the advantages of generating electricity from small hydropower coupled with rising interest in the sector has led to increased government support policies which will derive installations in many countries in the years to come. GlobalData estimates that cumulative installed capacity of small hydropower is expected to reach 140GW in 2015 and 201GW in 2020.
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