The UK has been a hydropower pioneer since 1878 when the first 4.5 kW hydroelectric generator was installed at Cragside House in Northumberland.

Currently, the UK has 1,657 hydropower schemes with a total installed capacity of 2 GW, generating 5,500 GWh annually. In addition, reservoir hydro offers a storage capacity of 900 GWh. A University of Birmingham study from 2022 suggests an undeveloped potential of another 1 GW. A study by Biggar Economics, commissioned by the BHA, showed that during the 2022 energy crisis, the existing hydropower fleet saved consumers £1.1bn.

The technology is proven and reliable, having generated electricity for more than 140 years. Hydro plants offer an operational life of 80 or more years. Reservoir-based hydropower provides low-carbon, dispatchable generation (capable of replacing high-carbon gas-fired peaking plants) and offers inertia and other grid system benefits. Hydropower’s generation profile matches well with the UK’s energy demand.

The UK is currently way off course plans to electrify heat and transport across the distribution network. The BHA is calling on government to bring forward local energy solutions where a whole-systems community approach will allow new generation to meet this new demand through smart local energy systems, with active network management, aggregated flexibility and local storage. Generating and consuming electrons locally will be key if we are to side-step the transmission constraints that we face over the next decade.

To enable further hydropower deployment, the industry is calling on the government to modify the existing contracts for difference (CfD) scheme by:

• reducing the minimum installed capacity from 5 MW to 1 MW;
• setting a strike price at £140/MWh; and
• allowing a hydropower ring-fenced pot.

The BHA also suggests considering an ‘enhanced’ levelised cost of energy, which accounts for whole systems benefits and compares hydropower to the cost of gas peaking plants it can replace.

Energy storage
Pumped storage hydropower (PSH) serves as a dynamic energy storage solution, using two reservoirs at different elevations. It stores surplus electricity during low demand periods and generates power during peak demand. As the grid decarbonises and relies more on intermittent solar and wind, more storage and flexibility will be needed to ensure demand is always met.

The UK has four existing PSH schemes, each over 40 years old, with a total installed capacity of 2.83 GW and storage capacity of 26.2 GWh. Originally built to balance nuclear and coal generation, they now help balance solar and wind intermittency.

The BHA has been calling for a price stabilisation mechanism, recommending the ‘cap and floor’ model successful in deploying interconnectors. We await the government’s response to a recent consultation and anticipate the scheme to open for project applications in 1Q2025. The LCP Delta report issued alongside the consultation showed that deploying PSH offered savings to consumers in all modelled scenarios, making it a ‘no-regrets’ solution.

A cap and floor mechanism would trigger the largest hydropower deployment in over 40 years in the UK, offering significant opportunities but also challenges. The UK must compete globally for resources, skills and capital to enable decarbonisation and energy security.

Originally built to balance nuclear and coal generation, pumped storage schemes now help balance solar and wind intermittency.

Tidal range energy
Tidal range energy is also represented by the BHA and offers significant low-carbon, indigenous generation opportunities for the UK. It could provide energy security at scale, with multiple schemes along the UK coast, especially in the west. There’s potential to develop schemes with a total installed capacity of 20 GW, providing 12% of the UK’s energy demand.

Tidal range could be a cornerstone of a decarbonised grid, offering timetabled energy generation near population centres, bypassing some of the transmission constraints we face. These inter-generational assets can generate for over 120 years, building long-term resilience into the energy system.

The main barrier for tidal range is political will, as large infrastructure projects are often seen as politically sensitive. However, tidal range is a modular infrastructure project bringing multiple co-benefits such as flood defence, coastal erosion mitigation and job creation in areas targeted for ‘levelling up’.

The technology has often been accused of being too expensive but a recent study by Jacobs, commissioned by the BHA, on the levelised cost of energy of tidal range has refuted the question of value and concluded that tidal energy should have a place within the UKs energy mix.

Diverse generation portfolio 
The key to a secure, operable, stable grid fit for a smart energy future will be a diverse portfolio of energy generation with different generation profiles, geographies and grid functions, supported by sufficient storage and flexible demand.

To meet the challenges of decarbonising heat, transport and industry, we need to accelerate the scale-up of renewable generation. The UK has the natural resources and can leverage investment, but political will, stable policy and acceleration of smart grid technologies are essential for success.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘New technology options for long-duration energy storage’. The increasing incorporation of local renewable generation capacity into electricity grids has led to the development of new energy storage technologies. Alan Greenshields, Director of Europe for iron flow battery developer ESS, looks at the evolution of long-duration energy storage.
• Although global hydropower capacity grew by 34 GW over the past year, progress is falling short of the 45 GW requirement to meet net zero 2050 targets, according to the International Hydropower Association (IHA).