Hydropower has a long track record in global power generation and it is a key technology used to fulfill energy demand. According to the International Hydropower Association, in 2018, global hydropower generation reached an estimated 4,200 TWh, being the largest contributor from a renewable energy source.

Moreover, hydropower capacity grew by 21.8 GW to reach a cumulative global capacity of 1.29 TW. Although renewable energy technologies, such as wind and solar power, are acquiring larger shares of the market, hydropower still plays a critical role to address energy needs and emission concerns, in addition to providing an easily regulated source of power.

Norway’s power sector is characterized by its high share of renewable energy and its negligible carbon footprint. As of January 1st, 2018, the total installed hydropower capacity of 31,837 MW and a production of 141 TWh, representing 94.3% of the country’s total capacity.

One of the main features of the Norwegian system is the flexibility offered by hydropower infrastructure. Water reservoirs have the ability to store energy and, in Norway, more than 75% of the production capacity can be swiftly regulated and adjusted at very low costs according to the market’s energy needs. Conversely, adjusting power generation at thermal plants is usually costly and less flexible.

The Norwegian power system holds 1,609 hydropower plants and over 1,000 water reservoirs, hosting more than half of Europe’s water storage capacity. However, the 30 largest reservoirs hold, roughly, 50% of the total storage capacity.

The Norwegian large hydropower market is quite mature and most of its reservoirs were built before 1990. Although Norway is no longer developing large hydropower projects there is considerable interest in upgrading and refurbishing reservoirs to optimize the use of resources and reduce their environmental impact.

However, the small, unregulated hydropower sector still shows room for growth and further development. Although large hydropower complexes may only be owned by the public sector, privates are fully capable of owning, investing and developing small hydropower facilities with a capacity limit of, approximately, 10 MW.

Additionally, Norway is highly integrated into the European market and projects such as NordLink and NorthConnect will further increase their connection. Such interconnection allows the Norwegian power system to reduce its vulnerability to variations in rainfall and production over seasons and years.