The Path Towards Decarbonization: The Role of Hydropower in the Generation Mix

The evolution of the generation mix towards deep decarbonization poses pressing questions about the role of hydropower and its possible share in the future mix. Most technical–economic analyses of deeply decarbonized systems either rule out hydropower growth due to lack of additional hydro resources or take it into account in terms of additional reservoir capacity. This paper analyzes a generation mix made of photovoltaic, wind, open-cycle gas turbines, electrochemical storage and hydroelectricity, focusing on the optimal generation mix’s reaction to different methane gas prices, hydroelectricity availabilities, pumped hydro reservoir capacities, and mean filling durations for hydro reservoirs. The key feature of the developed model is the sizing of both optimal peak power and reservoir energy content for hydropower. The results of the study point out two main insights. The first one, rather widely accepted, is that cost-effective decarbonization requires the greatest possible amount of hydro reservoirs. The second one is that, even in the case of totally exploited reservoirs, there is a strong case for increasing hydro peak power. Application of the model to the Italian generation mix (with 9500 MWp and 7250 MWp of non-pumped and pumped hydro fleets, respectively) suggests that it is possible to achieve methane shares of less than 10% if the operating costs of open-cycle gas turbines exceed 160 EUR/MWh and with non-pumped and pumped hydro fleets of at least 9200 MWp and 28,400 MWp, respectively.