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South America

In several countries in South America, hydropower provides more than half of total electricity supply and it is expected to remain the region’s largest renewable source for years to come.
Generation by hydropower (2023)
728TWh
Hydropower installed capacity (2023)
181 GW
Capacity added (2023)
1,203 MW
Pumped storage installed capacity (2023)
994 MW
Pumped storage capacity added (2023)
0 MW

Regional overview and outlook

In South America, hydropower stands as a cornerstone of the region's energy infrastructure, contributing approximately 45% of its electricity supply. Despite encountering a temporary drop in generation during the first half of 2023, attributed to drought conditions, hydropower remained a robust source of energy throughout the year. Total hydropower generation reached 728TWh, marking an increase of around 16TWh from 2022. Additionally, an extra 1,191MW of hydropower capacity was integrated into national grids across several countries, with Colombia seeing an addition of 643MW, Chile 228MW, Brazil 118MW, and Ecuador 1MW, against the 2022 baseline. Furthermore, several substantial hydropower projects are in the pipeline.

Most notably, the 7,550MW Manseriche project being developed in Peru, the 3,600MW Zamora G8 project being announced in Ecuador, and the 2,400MW Ituango project under construction in Colombia. Last year, South America's hydropower industry celebrated two significant achievements. The Brazilian Jirau hydropower project (3,750MW), owned by Jirau Energia, achieved the Gold Certification against the Hydropower Sustainability Standard, marking a major milestone in regional sustainable practice. Simultaneously, South America's largest floating solar project has commenced at Colombia's Urrá Dam, highlighting the potential of combining floating solar with hydropower operations to reinforce energy reliability and production. Developed by Noria Energy, the Aquasol project comprises a 1.5MW solar power system floating atop the 340MW hydropower reservoir. The development is projected to reduce carbon dioxide emissions by over 1,540 tonnes annually.

However, amid these successes, challenges arose in 2023 due to changing climate conditions. Uruguay grappled with its worst drought in over 70 years, impacting the levels of several hydropower reservoirs. Additionally, Brazil's 3,568MW Santo Antônio hydropower plant temporarily halted operations due to low water levels. These challenges underscore the need for resilient hydropower infrastructure. Investment in the modernisation of ageing hydropower plants can enhance the sector's resilience and ensure its continued contribution to energy security, especially considering that more than 50% of the installed capacity in the region is over 30 years old.

Pangal penstocks, Chile, Pangal

Policy and market overview

Renewing agreements for hydropower dams in South America is a major challenge, with many set to expire in the next five years. In Argentina, for example, four hydropower projects, collectively representing 4,380MW (or 42% of the nation's total hydropower capacity), faced contract termination in late 2023. The country’s Secretary of Energy granted a 60-day extension for these plants, raising concerns about future operational continuity. The uncertainty regarding the government's next steps – whether to reassume control or initiate new concession bidding – adds complexity to ensuring sustained energy infrastructure reliability.

Another significant challenge facing the region is local opposition towards hydropower, driven by concerns about community and ecosystem impacts. This has halted several projects, including Brazil’s 8,000MW São Luiz do Tapajós project, which failed to obtain environmental approval in 2016 due to protests from Indigenous communities. Today, the Ribeirão dam, a 3,000MW binational project between Brazil and Bolivia, is encountering comparable opposition from local residents, formally communicated in an open letter to the Presidents of both nations and endorsed by 37 civil society organisations in July 2023. This underscores the need for constructive dialogue and engagement among project developers, government authorities and affected communities to address concerns, mitigate adverse impacts and promote sustainable development practices in the hydropower sector.

Pangal powerhouse, Chile, Pangal

Amid these challenges, China's growing investment in South America's hydropower sector offers potential avenues for development. Bolivia, Brazil, Ecuador and Peru have received significant investments from Chinese firms in the last two decades. In Brazil, Chinese firms have acquired stakes in 304 power plants, amounting to 10% of the country's national energy generation capacity. Many of these investments include modernisation initiatives aimed at improving the performance of existing hydropower plants, such as Jupiá (1,551MW) and Ilha Solteira (3,480MW). Despite the considerable Chinese investment, foreign direct investment (FDI) in South America's hydropower sector has declined. From 2005 to 2022, hydropower attracted only 4% of the total FDI in the renewable energy sector. This decline reflects a combination of factors, including investor hesitancy due to environmental and social concerns associated with large-scale hydropower initiatives. Moreover, regulatory frameworks need to innovate to address the evolving challenges posed by climate change – such as shifting rainfall patterns and prolonged droughts. This has further complicated the investment landscape, deterring potential investors from committing to long-term projects.

Latest developments

Argentina
Bolivia
Brazil
Chile
Colombia
Costa Rica
Ecuador
Guyana
Paraguay
Peru
Uruguay
Venezuela

Argentina

Hydropower installed capacity (2023)
11,359
MW
Pumped storage installed capacity (2023)
974
MW
Generation by hydropower (2023)
39
TWh

Argentina’s 750MW Río Grande de Córdoba plant, the largest PSH project in South America, is set for a major upgrade. Currently operating at only 50% efficiency due to ageing infrastructure, a US$100 million investment aims to modernise the facility, restoring its full operational potential. The 1,310MW hydropower development of the Santa Cruz River has reached 50% of construction progress.

The complex will include the 950MW Presidente Néstor Kirchner plant equipped with five Francis turbines, and the 360MW Governor Jorge Cepernic plant, featuring three Kaplan turbines. Together, they are expected to generate up to 5TWh annually. This large-scale investment, nearing US$5 billion, is 70% financed by the China Gezhouba Group Company Limited, in partnership with Argentine firms. It will supply electricity to over a million homes in the country.

Countries to watch

Key

Low unexploited potential/minimal policy activity/limited project pipeline
Moderate unexploited potential/some policy activity/intermediate project pipeline
High unexploited potential/strong policy activity/Large project pipeline
Country
Unexploited potential
Policy activity
Development pipeline
Canada (Québec) 

Canada (Québec) 

Unexploited potential

The province’s electricity mix is dominated by hydropower, but over 40GW of potential remains.

Policy activity

Hydro-Québec’s strategic plan includes building greenfield hydropower to decarbonise the province’s economy.

Development pipeline

Preliminary studies were launched for a development on the Petit Mécatina river, with a potential of 1,200MW.

Canada (British Columbia)  

Canada (British Columbia)  

Unexploited potential

The province’s electricity mix is dominated by hydropower, but over 30GW of potential remains.

Policy activity

C$36 billion of infrastructure spending has been announced to support electrification to meet climate goals.

Development pipeline

New transmission lines have been announced that will connect hydropower from the main grid to north coast industries.

USA

USA

Unexploited potential

While the USA has exhausted most of its feasible greenfield hydropower potential, significant opportunities still remain for PSH.

Policy activity

Landmark new laws have provided tax incentives and unlocked funding for new PSH development.

Development pipeline

A significant increase of PSH capacity through upgrades and new development has been announced.

Mexico

Mexico

Unexploited potential

The country has a well-established hydropower fleet, with potential remaining.

Policy activity

Refurbishment of hydropower facilities is expected to increase hydropower capacity.

Development pipeline

Droughts affected hydropower generation in 2023.

Argentina 

Argentina 

Unexploited potential

The country only uses around 20% of its estimated potential. 

Policy activity

Argentina has implemented several policies and fiscal incentives to support hydropower development, including feed-in tariffs and PPAs through the GENREN programme, specifically targeting small hydro projects up to 30MW. 

Development pipeline

Several substantial hydropower projects are in progress, such as Corpus Argentina (3,500MW), Santa Cruz Plant (1,310MW) and Codón de Plata (1,100MW).

Bolivia

Bolivia

Unexploited potential

Bolivia has only used around 2% of its estimated hydropower potential, although approximately 80% of the untapped capacity is located in very remote areas.

Policy activity

Bolivia prioritises large-scale hydropower projects through state-owned utilities, significantly investing in capacity expansion with support from national funds and international loans.

Development pipeline

The pipeline includes the 3,000MW binational Rio Madeira project, along with several medium and small-scale projects currently underway.

Ecuador 

Ecuador 

Unexploited potential

Ecuador has harnessed approximately 7% of its hydropower potential.

Policy activity

The Ecuadorian Government has included hydropower development in its long-term planning. With ambitions for up to 80% of the nation's electricity supply to be sourced from renewables, including hydropower, new laws and regulations have been introduced to encourage private investment in the sector.

Development pipeline

Ecuador aims to harness its untapped hydropower potential, exemplified by the Zamora G8, G9, and G10 cascading project with a total capacity of 7,225MW. Several medium-size projects in the pipeline seek support from foreign investments.

United Kingdom 

United Kingdom 

Unexploited potential

Substantial PSH potential to exploit.

Policy activity

The government is showing support for new PSH development and is currently studying the implementation of an ad-hoc remuneration mechanism for LDES technologies. It is estimated that in Great Britain up to 50GW of long-duration flexibility will be needed by 2035.

Development pipeline

Several PSH projects are under development for a combined installed capacity of over 7GW and 136GWh of energy storage. Recent support shown by the UK Government has substantially sparked the market, attracting local and international investment.

Spain

Spain

Unexploited potential

Limited conventional hydropower potential remains, but there is great scope to develop new PSH assets or convert existing facilities.

Policy activity

The Spanish Government has set targets to develop 22GW of storage capacity by 2030. A grant scheme of €100 million has been made available for PSH development.

Development pipeline

Six PSH projects in Spain are currently in permitting stage or under construction. Combined, these have an installed capacity of around 2.5GW with over 740GWh of energy storage.

Austria

Austria

Unexploited potential

Limited conventional hydropower potential remains to be developed, but PSH potential is significant.

Policy activity

The 2021 Renewable Energy Expansion Act sets a challenging target to increase hydropower production by 4TWh by 2030.

Development pipeline

Austria has over 2.7GW of hydropower plants under development (1GW under construction), of which the vast majority are PSH assets.

Switzerland 

Switzerland 

Unexploited potential

Limited conventional hydropower potential remains to be developed, but PSH potential is significant.

Policy activity

Between 2020 and 2021, the Swiss Government identified 16 PSH projects through a multi-stakeholder consultation aiming to develop 2TWh of capacity over two decades. A new law introduced in 2023 simplifies approval processes for PSH projects.

Development pipeline

The country has solid plans to boost its long-duration energy storage through the development of 16 new PSH projects, though these are currently in early stage.

Türkiye 

Türkiye 

Unexploited potential

According to the Turkish Government there is over 130TWh of technically exploitable hydropower potential in the country, of which 60-70TWh is currently used. 

Policy activity

The Turkish Government has substantially supported the development of new hydropower facilities over the last 20 years and placed hydropower resources at the core of its energy policies. 

Development pipeline

Türkiye has 2.3GW of hydropower projects currently under development, of which 460MW are under construction.  

Angola 

Angola 

Unexploited potential

Angola has an exploitable hydropower potential of 12GW, with only 4GW currently utilised, making it a priority in the government's infrastructure plans to meet growing electricity demand.

Policy activity

The government aims to achieve cost-reflective tariffs by 2025 and increase financial autonomy for utilities. Angola's long-term energy strategy focuses on increasing electrification rates and capacity, with external financing and private investment crucial for future projects.

Development pipeline

The country is advancing renewable energy initiatives with China's support, as seen in the Caculo-Cabaca Hydropower Station project. 

Burundi

Burundi

Unexploited potential

Burundi’s estimated hydropower potential is 1,700MW of which 20% is economically viable.

Policy activity

Burundi–China cooperation in the energy sector has been significant, with projects like the Ruzibazi hydropower plant completed ahead of schedule with Chinese assistance. Ongoing discussions and funding mobilisation for future projects underscore the importance of China's continued support.

Development pipeline

The completion of the Regional Rusumo Falls hydropower plant, with a portion of its output dedicated to Burundi, will reduce reliance on costly thermal generation. Additionally, the Jiji and Mulembwe hydropower project is set to increase the country's installed capacity by 50% in the next two years.

Egypt

Egypt

Unexploited potential

Although most potential hydropower has already been used, opportunities remain for small hydro and pumped storage.

Policy activity

Egypt joined the Battery Energy Storage Systems Alliance (BESS), which is one of the main initiatives of the Global Energy Alliance for People and Planet (GEAPP) during COP28 in Dubai.

Development pipeline

Egypt is partnering with China Energy to conduct a feasibility study for a proposed 2GW PSH plant. If realised, it would be the largest PSH project in Africa.

Nigeria 

Nigeria

Unexploited potential

The total exploitable hydropower potential is estimated to exceed 14,120MW, translating to over 50.8TWh annually.

Policy activity

Despite its vast potential, Nigeria's hydropower sector faces hurdles such as funding constraints and infrastructure deficiencies. However, the government aims to overcome these challenges with strategic partnerships and innovative financing models.

Development pipeline

Nigeria's Federal Ministry of Water Resources has initiated a tender for private partners to construct, operate, and maintain the 20MW Farin Ruwa hydropower plant through a concession agreement. 

India 

India 

Unexploited potential

The CEA reports that India has only developed 29% of its total hydroelectric potential of 145.3GW, while also having 100GW of potential PSH, with only 4.7GW in operation. 

Policy activity

India has provided significant policy support in recent years, classifying hydropower above 25MW renewable, creating a Renewable Purchase Obligation and Energy Storage Obligation, a waiver of inter-state transmission charges for electricity from solar and wind for use by PSH projects, and budgetary support for the cost of enabling infrastructure. 

Development pipeline

Numerous states have made announcements in 2023 and ~10% of hydropower potential is under construction. Many large-scale projects were announced in 2023–24 or reached an MOU stage including 2GW in Odisha, 7.35GW in Maharashtra, 11.2GW potential in Madhya Pradesh and 13GW in Arunachal Pradesh.

Russia

Russia

Unexploited potential

Russia’s Deputy Energy Minister noted that only 20% of the country’s hydropower potential has been developed. 

Policy activity

The Deputy Energy Minister highlighted that there is little privately developed hydropower, so the state will likely need to provide support, as the market does not compensate for investment costs and there needs to be better consideration of longer payback periods. 

Development pipeline

Russia’s current plan for hydropower development includes 6.5GW to be completed by 2035 and a total of 11.5GW new hydropower (including PSH) by 2042.

Pakistan

Pakistan

Unexploited potential

Caretaker Minister for Power Muhammad Ali stated that Pakistan has a potential for 64GW from hydropower, however only 11GW have been commissioned so far.

Policy activity

Pakistan has called the 2020s the Decade of Dams, with an ambition to add 10GW by 2030. However, despite utilising Green Euro Bonds to finance two large-scale projects, financing is considered an issue. 

Development pipeline

The Tarbela 5th Extension hydropower project is expected to be completed in 2025 and increase the capacity of Tarbela from 4,888MW to 6,418MW. Other major projects in the pipeline include Dasu (4,320MW) expected online in 2026; Mohmand (800MW) in 2026; and Diamer-Bhasha (4.5GW) due for completion in 2028. 

Tajikistan 

Tajikistan 

Unexploited potential

Tajikistan has an immense hydropower generation potential of 527TWh, with only 4% of its potential currently exploited.

Policy activity

A US$15m World Bank loan is intended to create sounder governance, financial and macro-fiscal framework and contribute to the socio-economic development of Tajikistan, which may see new support mechanisms considered.

Development pipeline

Numerous IFIs have announced financial support for the 3.78GW Rogun hydropower project. In addition to the major hydropower projects in the pipeline, Minister Daler Juma announced a plan to produce 500,000 tons of green hydrogen by 2030 and to double that by 2040. 

Kyrgzystan 

Kyrgzystan 

Unexploited potential

Kyrgzstan has an estimated hydropower generation potential of 140–170TWh, but only about 30% is being utilised. 

Policy activity

Limited renewable energy targets have been put in place. Kyrgzstan has indicated it will construct new hydropower plants to support its NDC targets as well as diversifying its renewable energy sources. 

Development pipeline

In early 2024, the World Bank discussed financing several hydropower projects in Kyrgyzstan, including the 1.86GW Kambarata 1, which will have a 5.4 billion m3 reservoir volume, generating 5.6TWh. Additional small-scale cascade projects on the Naryn River are planned, which could lead to 237MW and 439MW if completed. 

China 

China 

Unexploited potential

China has led the way globally in the large-scale development of its hydropower potential, but the country’s on-river hydropower capacity is now nearing saturation.

Policy activity

China has heavily incentivised hydropower development in its new net zero by 2050 policy. The latest national policy outlines a target to reach up to 80GW of PSH by 2027.

Development pipeline

There are a significant number of projects in the pipeline for both conventional hydropower and PSH.

Vietnam

Vietnam

Unexploited potential

Most of the known hydropower potential in Vietnam remains untapped.

Policy activity

Vietnam is quiet on the policy developments needed to unlock its remaining potential.

Development pipeline

The development of conventional hydropower capacity has seen a significant slowdown in recent years.

Australia

Australia

Unexploited potential

Australia has tapped a small proportion of its hydropower potential to date.

Policy activity

Australia recognises hydropower in its net zero policy wording but has not yet maximised the opportunities to promote new investment in the sector.

Development pipeline

Australia has a small number of PSH projects in the pipeline, but no new conventional hydropower currently.

Case Study

Hidroituango also referred to as Ituango, is a hydropower plant located in Antioquia, Colombia, which will provide 17 per cent of the country’s electricity demand when completed in 2024. Ituango is a project of the Ituango Hydrolectric Company, made up of the majority partners Instituto para el Desarollo de Antioquia, the Government of Antioquia and Empresas Públicas de Medellín who is the main contractor and operator.

The project’s completion had been delayed due to severe weather conditions. Between April and May in 2018, Antioquia experienced heavy rains which caused large landslides. These events coupled with geological characteristics, resulted in the premature filling of the reservoir. A sudden unblocking of one of the diversion tunnels caused flooding downstream of the dam and an evacuation of the surrounding communities.  

A year later, Colombia’s National Disaster Risk Management Unit declared that the 600 families that were evacuated could safely return to their homes.  In 2021, a report warned that the decision to abort the project would pose a greater socio-environmental threat than finishing it. The Colombian licensing authority ANLA provided a series of recommendations for the safe completion of the dam and powerhouse. These recommendations were implemented and since late 2022, Ituango has been supplying continuous electricity from 600 MW capacity to the national grid.  

The project is undergoing an assessment under the Hydropower Sustainability Standard to certify its compliance and demonstrate its alignment with performance standards. This assessment is undergoing public consultation with an expected completion in June 2023.  

Once Ituango is fully completed in 2024, it will have a total installed capacity of 2,400 MW and will represent a reduction in emissions of 4.4 million tons of CO2 per year.

Interesting Fact  

Around the world, the countries that are using almost 100 per cent renewable energy to generate electricity are Albania, the Democratic Republic of Congo, Iceland, Paraguay, Costa Rica and Norway. These countries have made significant strides in implementing renewable energy sources such as solar, wind, and hydropower and have set ambitious targets for continuous growth. The Itaipu Dam, located on the Paraná River, is one of the largest hydroelectric power plants in the world and generates about 95 per cent of Paraguay’s electricity helping Paraguay generate all its electricity from renewable sources.

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