Electricity from hydropower: a significant contribution to Europe's economies


Hydropower makes an important contribution to Europe's economy, for supply security with electricity and for climate protection. A new study entitled "The hydropower sector's contribution to a sustainable and prosperous Europe" presents new data and facts on the economic value of hydropower in Europe.

Electricity from hydropower: a significant contribution to Europe's national economies

A consortium consisting of 21 leading hydropower companies and associations from Europe commissioned the internationally renowned consulting company DNV GL, with the coordination spearheaded by VERBUND, to carry out a study on the economic contribution of hydropower in Europe. The participating companies represent around 95% of the hydropower facilities installed in Europe (EU-28, Norway, Switzerland and Turkey). The industry association of the European electricity economy EURELECTRIC and the International Hydropower Association (IHA) were involved in the project as cooperation partners.

Hydropower as a significant part of European electricity generation

"Hydropower is the greatest source of renewable energy in Austria and Europe," says VERBUND CEO Wolfgang Anzengruber. "Hydropower is a CO2-free and reliable energy generation technology and, with 85 to 95%, it has the highest degree of effectiveness among all technologies.  With both assured performance and storage capacities, hydropower makes an important contribution towards securing supply and strengthening the European markets.“

Within the EU-28, hydropower plants annually generate around 380 TWh. This amounts to around 13% of the total electricity used. When we add the countries Norway, Switzerland and Turkey, the value lies at around 600 TWh or approximately 18%. The European hydropower producers are global leaders and cover around two-thirds of the global market.

Economic value of hydropower

The contribution of hydropower to economic value creation amounts to around € 25 billion annually for the EU-28 and € 38 billion for Europe (EU-28, Norway, Switzerland, Turkey). This corresponds approximately to the gross domestic product of Slovenia. With an R&D quota of around 5%, European producers are also impressive when it comes to energy research and innovation. Furthermore, the hydropower sector in Europe provides around 120,000 work places, with a value creation per employee of € 650,000 annually. This figure is around eight times higher than the European average in the producing sector.

Supply security, climate protection and stability of the electricity system

One of the central challenges in Europe is ensuring supply security. The EU-28 currently import 53% of their energy; in 2013 expenditures to this end amounted to € 400 billion. Hydropower is making an important contribution towards reducing this reliance on imports. Without hydropower, imports of fossil fuels would be 11% higher – this would mean additional costs of approx. € 24 billion annually. The contribution of hydropower towards the European climate protection objectives is also significant: over 180 million tonnes of CO2 emissions can be avoided in Europe thanks to hydropower. Moreover, a life-cycle analysis shows that due to its durability, hydropower has the smallest carbon footprint as compared to all other generation options - also compared to other renewable energy technologies.

Storage and pumped storage plants

Storage and pumped storage plants are by far the most important storage technology in Europe.  The approximately 220 TWh of storage capacity correspond to almost 25 days of average electricity usage.

Expansion potential & outlook

The study also investigates possible expansion potential for hydropower and its economic effects: by 2030, an increase of up to 20% is possible in Europe (EU-28: up to +7); by 2050, up to 31% in Europe (EU-28: up to +19%).

"Hydropower is thus an important key technology for the transition of the electricity system towards a sustainable electricity supply and would best be used for the benefit of supply security in Europe," says VERBUND Chairman Günther Rabensteiner. "To this end, defining the regulatory framework for the internal European electricity market in such a way so that equal and fair competitive conditions between the production technologies exist and energy and environment policy objectives are harmonised, is of central importance.“

VERBUND hydropower

VERBUND is Austria's leading electricity company and one of the largest hydropower electricity producers in Europe. The company produces more than ninety percent of its electricity from hydropower. VERBUND has over 127 hydropower plants with a total output of 7,746 megawatt and is the number 1 when it comes to hydropower in Austria and Bavaria. Since 2006, VERBUND has been publishing the emission data on greenhouse gases via the Carbon Disclosure Project (CDP), the world's biggest initiative for climate reporting. CPD ranks VERBUND as the leading and best company in the energy provider category in the D-A-CH region (Germany, Austria and Switzerland), as well as the Country Leader Austria and Index Leader (ATX).

Ingun Metelko Ingun Metelko

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