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factory when completed in mid-2013. Alstom has partnered with Chinese firms to work on hydropower projects in China, Ghana, and Iran.81 In Japan, small hydropower has been slow to expand, because smaller power stations have typically been considered to be a high-cost technology. Nonetheless, Japan still ranks third globally in total small hydropower capacity.82 Japan enacted a strong feed-in tariff (FIT) to promote investment in renewable energy in late 2011. The FIT applies to small hydropower (capacity rated at less than 30 MW),83 as well as other renewable energy technologies, and is encouraging the development of new small hydropower projects and related services. However, the FIT is likely to be less effective at promoting small hydropower than other renewables, because hydropower takes longer to design and is generally more difficult to implement than projects based on other renewable energy technologies.84 Africa In parts of Africa, where regional instability may make it difficult to secure financing for the significant investments required for large hydropower projects, small hydropower may play an important role in alleviating power shortages. An increasing number of IPPs are actively developing small hydropower projects in Africa. Hydropower and other renewable energy sources are seen as a way to reduce dependence on fossil fuels in areas far from the existing power grid, such as in mining operations. Smaller hydropower projects are often easier to fund, have faster startup times, and have smaller social and environmental impacts than more traditional, large hydropower projects. Small hydropower plants are often used off-grid, or in small “mini-grids”; large plants tend to be connected to centralized grids in order to fully utilize their generation capacity.85 South Africa’s 20-year resource plan, introduced in 2012, calls for renewables to represent 38 percent of all new electricity capacity added through 2030; while the new capacity is expected to draw largely on wind and solar sources, the plan also envisions 2.6 GW of new hydropower.86 European Union Recent EU regulations will have significant impacts on hydropower development. On one hand, the EU Water Framework Directive aims to turn rivers back to their original state as far as possible, with a focus on pollution reduction. In certain rivers, this will reduce hydropower generation capacity. On the other hand, to promote renewable energy, many EU countries have introduced economic support programs such as FITs that promote new hydropower projects. Some of these systems include smaller-scale hydropower, but most exclude large hydropower projects. The lack of harmonization between overall EU energy policy and EU water management policies reportedly serves as a significant 81 Industry representative, telephone interview with USITC staff, Beijing, May 17, 2013; Bloomberg News, “Alstom Building Center in China to Expand Hydro Business,” July 11, 2012. 82 Government representative, interview with USITC staff, Tokyo, May 13, 2013. 83 Small hydro was defined as having a project capacity of less than 30 MW for the FIT because that was the dividing line for a project’s ability to cover its investment costs. Industry representative, interview with USITC staff, Tokyo, March 10, 2013. 84 Industry representative, interview with USITC staff, Tokyo, March 10, 2013; REN21, Renewables: Global Futures Report 2013, 2013, 46. 85 IRENA, “Renewable Energy Technologies: Hydropower,” June 2012, 5. 86 REN21, Renewables 2013, 2013, 50. 5-23PDF Image | Renewable Energy and Related Services: Recent Developments
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