Energy transition: Norwegian hydropower as an anchor in stability for the European power grid

Hydropower instead of pumped storage: How Norway could stabilize Europe's electricity grid

The energy transition in Europe faces significant challenges, but one natural resource could play a key role in its success: Norwegian hydropower. The Fraunhofer Institute for Energy Economics and Energy System Technology, in the collaborative project HydroConnect, has investigated how this natural energy source can significantly contribute to stabilizing European electricity grids while simultaneously drastically reducing the need for costly new pumped storage power plants.

Norway's unique energy position in Europe

Norway occupies an exceptional position in the European energy landscape. With around 90 percent of its electricity generated from hydropower, the Scandinavian country is uniquely positioned in Europe. This impressive figure is based on the country's unique geographical location with its deep fjords, steep mountains, and inexhaustible water resources. Over 1,600 hydroelectric power plants are distributed across the country, which, at 385,000 square kilometers, is only slightly larger than Germany.

Norwegian hydropower production reached a historic record of 157.2 terawatt-hours in 2024. This amount exceeds German hydropower production eightfold, even though both countries are comparable in size. What makes these figures particularly remarkable is the fact that Norway not only meets its own needs but also produces significant surpluses for export. The country already exports around 14 terawatt-hours of electricity, making it the largest electricity exporter in Europe.

Norway's hydropower systems boast impressive storage capacity in over 1,000 reservoirs, capable of storing up to 70 percent of its annual electricity consumption. These natural storage facilities offer a flexibility that the rest of the world desperately seeks, while Norway has had it for decades.

The challenges of the European energy transition

To achieve the goal of climate neutrality by 2050, the expansion rates of wind power and photovoltaics in Europe must increase four to fivefold compared to today. However, this massive transformation presents fundamental challenges. Wind and solar power produce electricity depending on the weather, not on demand. This volatility requires flexible solutions that can react quickly to fluctuations between supply and demand.

The unpredictability of renewable energies is currently leading to costly problems. In Germany, compensation for wind turbines that had to be shut down due to grid overload cost consumers around €610 million in 2017. This situation underscores the urgent need for flexible storage and balancing mechanisms in the European energy system.

The installed capacity of wind and solar energy in Europe could more than triple by 2050, reaching over 1,800 gigawatts. However, this enormous capacity must be complemented by appropriate flexibility mechanisms to ensure a stable and reliable energy system.

HydroConnect: Scientific foundations for the energy future

The international research project HydroConnect, involving Fraunhofer IEE, SINTEF Energy Research, the Norwegian University of Science and Technology, and the University of Trento, systematically investigated how Norwegian hydropower can contribute to European climate neutrality. The researchers analyzed 15 different scenarios for the years 2030 and 2050, using a comprehensive database of over 850 hydropower systems and more than 3,600 individual reservoirs.

The results are impressive: The expansion of Norwegian hydropower by eleven gigawatts alone, and the corresponding expansion of interconnectors, can reduce the investment required in Europe by approximately 70 gigawatts of additional capacity for photovoltaics, electrolyzers, and battery storage. These figures demonstrate the enormous systemic added value that flexible hydropower plants and their connection to neighboring European systems offer.

The project used sophisticated modeling tools, in particular the SCOPE Scenario Development energy system model, to analyze various future scenarios. This included not only technical aspects but also a systematic assessment of greenhouse gas emissions, electricity prices, and environmental impacts on Norwegian waters.

Pumped storage power plants: Europe's underestimated potential

While attention is often focused on new technologies, Europe possesses enormous untapped potential in the form of pumped storage power plants. A European study identified an impressive potential of 2,291 gigawatt-hours at possible pumped storage plant sites in the EU-15 countries, as well as Norway and Switzerland. The greatest potential lies in southern Norway, with 1,242 gigawatt-hours, representing 54 percent of the total potential.

This capacity is seven times greater than the current pumped storage capacity in Europe and would be enough to supply Malta with electricity for an entire year. To achieve the same energy storage capacity with lithium-ion batteries, 95 million batteries from ordinary electric cars would be required.

Pumped-storage power plants are currently experiencing a comeback after being considered uneconomical for a long time. This is changing rapidly, however, as they are becoming increasingly important in the energy transition. The technology is simple but effective: Excess electricity pumps water into higher-elevation reservoirs; when needed, it flows back down through turbines, generating electricity.

In Austria, for example, the energy supplier Verbund is investing more than 200 million euros in the modernization of its pumped-storage power plants in the Carinthian Alps. The plants now have a turbine capacity of 1.5 gigawatts and can temporarily store the surplus electricity from several hundred wind turbines.

Interconnectors: Europe's power bridges

The key to harnessing Norwegian hydropower lies in the so-called interconnectors – high-performance submarine cables that link the national power grids. These “power bridges” not only make the national grids more secure, but also make electricity cheaper in Europe.

The most prominent example is NordLink, which has directly connected Germany and Norway since April 2021. The 623-kilometer-long submarine cable can transmit up to 1,400 megawatts, enough to supply more than 3.6 million German households with electricity. The investment costs of around two billion euros are shared equally between the Norwegian and German partners.

The principle is elegant: When there's no wind on the German North Sea coast and the wind turbines are idle, Norway's hydroelectric power plants step in. Conversely, if Germany produces too much wind power, it flows to Norway, allowing the Norwegian hydroelectric power plants to be temporarily shut down. The Norwegian fjords act as "virtual storage" in this process.

Norway is already connected to the European electricity grid via several interconnectors: to the Netherlands via NorNed (since 2008), to Denmark via several connections, and to the UK via a new cable. This interconnection makes it possible to optimally utilize Norway's flexible hydropower to compensate for fluctuations in wind and solar energy in other countries.

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Flexibility as the core of the energy transition

Hydropower is the most flexible source of renewable energy. Unlike battery storage, which can only store energy for short periods, hydropower plants offer flexibility over a wide time spectrum, from milliseconds to entire seasons. This characteristic makes them an indispensable component for grid stability.

Norwegian hydropower can respond to fluctuations in demand within minutes. It can export electricity on a large scale when wind and sun are scarce in Europe, and conversely, import it when there is a surplus. This capability makes Norway a key player in a climate-neutral, interconnected European energy market.

The flexibility of hydropower extends far beyond mere electricity generation. Hydropower plants can provide various system services, including frequency control, voltage control, and reactive power compensation. These services are essential for stable grid operation, especially with the increasing share of volatile renewable energies.

Economic and political dimensions

The increasing integration of Norwegian hydropower into European electricity markets also presents challenges. The Norwegian population is experiencing rising electricity prices, while large quantities of electricity are being exported. This situation has led to political tensions and even contributed to the collapse of the Norwegian government.

The Eurosceptic Centre Party and other parties criticize the fact that Norwegian households have to pay higher electricity prices because hydropower reserves are being sold abroad. EU regulations restrict Norway's control over these reserves. The Norwegian finance minister even blamed EU energy policy for the collapse of the government.

Despite these political challenges, the economic benefits of integration remain considerable. An expansion of eleven gigawatts of hydropower and new interconnectors reduces system costs, equalizes electricity prices, and dampens price spikes during periods of low wind and solar energy production. Analyses show that increased wind power boosts Norwegian electricity exports and helps stabilize the European system.

Virtual energy storage and decentralized solutions

Besides large hydroelectric power plants, virtual energy storage systems are also gaining importance. These systems network thousands of small storage units into a large, intelligent system. In Germany, for example, the company Sonnen has already connected 25,000 batteries to create a virtual power plant with a capacity of 250 megawatt-hours.

These decentralized solutions perfectly complement large hydropower plants. While Norway's hydropower provides long-term stability, virtual power plants can react quickly to local fluctuations and relieve pressure on the distribution grid. The combination of centralized Norwegian hydropower and decentralized storage solutions creates a robust and flexible energy system.

Environmental impacts and sustainability

Hydropower in Europe plays a key role in a sustainable energy system. It provides large quantities of low-carbon electricity at low cost and limits societal expenditure on developing a climate-neutral energy system. The European Commission has explicitly confirmed the importance of hydropower for the European Green Deal and recognized its indispensability as a flexible, dispatchable source of renewable energy.

Hydropower reservoirs offer additional benefits beyond electricity generation: they ensure water availability for flood control, irrigation, water supply, and recreation. This multifunctionality makes hydropower a particularly valuable resource in times of climate change.

The HydroConnect project also investigated the environmental impacts on Norwegian reservoirs and river systems. This interdisciplinary project combines meteorology, energy analysis, and environmental research to link weather data, power generation, and ecological factors such as ice cracking in reservoirs.

Europe's hydropower: 47 percent of potential still untapped

The prospects for European hydropower are promising. The untapped economic hydropower potential in Europe represents 47 percent of the technically developable potential. Particularly in the Alps, Scandinavia, and the Pyrenees, there are still considerable unused opportunities.

Modernizing existing hydropower plants is considered one of the most efficient ways to increase electricity production while minimizing environmental impact. New technologies such as variable-speed turbines make hydropower plants even more flexible and efficient.

Europe is also a leader in innovative hydropower concepts. Projects like ALPHEUS are developing circular offshore dams that use seawater as an energy storage medium. These could create additional storage capacity in the future equivalent to thousands of batteries.

The digitalization and automation of power grids will provide even greater flexibility for decentralized hydropower plants, particularly at the distribution network level. At the same time, intelligent fish passage facilities such as the HydroConnect Archimedes screw turbine will ensure that hydropower also meets ecological requirements.

Systemic importance for climate neutrality

Norwegian hydropower will remain a key component of a climate-neutral energy system in Europe. The analyses from the HydroConnect project clearly demonstrate the systemic added value of flexible hydropower plants and their connection to neighboring European systems.

The construction of a few new pumped-storage power plants can actually make the expansion of many times the capacity of other technologies unnecessary. This insight is fundamental for energy policy: Instead of relying exclusively on new technologies, Europe should optimally utilize and intelligently network its existing natural storage capacities.

The combination of Norwegian hydropower, modernized pumped storage power plants, and smart interconnectors creates an energy system that is both stable and affordable. This infrastructure forms the backbone for the successful integration of the rapidly growing wind and solar capacities in Europe.

With a few targeted investments in networking and modernizing existing hydropower capacities, Europe can take a decisive step towards climate neutrality without jeopardizing security of supply or affordability. Norwegian hydropower is proving to be the natural anchor of stability that Europe urgently needs for its successful energy transition.

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