ANNEX II - Small Scale Hydropower - IEA Implementing Agreement


Last updated in 1997 - More than 99 percent of electricity in Norway comes from hydropower. Representing the fifth largest hydropower system in the world and regarded by many as the most efficient and modern, the Norwegian hydropower system generates an average of 115 00GWh of electricity a year and has a total installed capacity of 29 932MW. Cosponsored by the Norwegian government and private companies, a nationwide research and development program has been implemented to develop ways to reduce costs and increase output of hydro structures. The entire project is aimed at making the existing power system more valuable in the marketplace. Through refurbishment and R&D, the country plans to increase its own hydro generating capacity. The hope is that as demand for power increases while budgets remain limited, hydro owners can rehabilitate existing plants to increase capacity for a relatively modest investment. Norwegian hydro leaders hope that technology developed through these programs can be useful throughout the world and help to keep Norway at the leading edge of the industry.

Source: Ziegler, T. Increasing the Value of Hydro Through Research and Development. Hydro Review Worldwide. Summer 1993.

Source: Reynolds, P. Scandinavian Synergies. International Water Power and Dam Construction. July, 1995.


Hydropower is one of Norway's major natural resources due to the country's favourable climate and topography for such development. Hydropower contributes to 99,4 % of the total electricity production. In the last decade there has been an increasing interest in construction of micro- and mini-hydropower plants, especially among private property owners. Due to standardised technical solutions and more equipment vendors, the development cost has decreased.

Micro- and mini-hydropower plants may have a local signification. It can contribute with long-term incomes for the owner, and if connected to the grid it can contribute to strengthening and optimum use of the local grid. This may in the end contribute to keep the Norwegian practise of rural settlings. From a controllers viewpoint small-scale hydropower contributes to the energy balance, but not the power control due to limited regulation of the water.


In 1885 the outskirts of the town of Skien, in southern Norway, enjoyed the supply of electricity from hydropower in a nearby wood-processing plant at the Skien River. This was the beginning of the era of Norwegian hydropower development. After this other cities followed the electrification based on hydropower.

The economic optimism of the late 1910s, coupled with an impatience to share advantages of electricity, led to a wave of local initiatives to supplement what the rural municipalities were able to achieve. To facilitate and encourage this development, most counties established a post of County Electrification Engineer to give technical advice, recommend on funding etc.
Several hundred such local or neighbourhood power systems were established over the period 1915 to 1930. Statistics at year-end 1929 showed a total of 1452 hydropower plants in the country, of which 1315 were less than 1000 kW. In the same period there was also a boom in larger hydropower plants.

The major increase in new hydropower plants was in the period after World War II and until the middle part of the 1980's. Especially in the first and last decade about half of the new hydropower plants were small-hydropower plants.
Today there are 565 hydropower plants with an installed capacity above 1 MW, and mean annual production is about 118 TWh. The capacity is approximately 28 000 MW. The amount of small-hydropower plants is about 44 %.

Present situation for micro- and mini-hydropower

During the period with focus on implementing large hydro, most of the micro and mini hydropower plants were closed down. The main reasons for this development was operation cost and unreliable electricity production. It has been an increased interest in hydropower projects with capacity less then 1 000 kW the last decade, and in 1992 NVE made a study on the annual energy potential from uprating and refurbishing hydropower plants, with an installed capacity less than 1000 kW. The study concluded that approximately 400 GWh could be harnessed by improving old schemes, and approximately another 300 GWh could be produced in new plants. The number of existing micro and mini hydropower plants was assumed to be 300, and with an annual production about 300 GWh.
Norway is positive to develop micro- and mini-hydropower plants because they usually have small environmental impacts and it uses a local energy resource. But there can be a conflict with protected watercourses and planned new larger projects.
Every initiative which will utilise the watercourse must first be considered if it will need licensing. If so, there must be applied for a licence, otherwise local authorities must approve the project.

From 1996 NVE has received about 400 applications or request for licensing, with various degrees of conflicts with environment and other interest groups. These projects, which represents approximately 500 GWh is today under different stages of development, but very few has been completet.

The experience is that potential owners of a new hydropower plant often under estimate the construction cost, and will get financial problems or they have expected higher electricity prices than can be expected in the market. In both cases the economic viability is threatened.  Micro- and mini-hydropower have been exempted from investment tax, and is now on level with other renewable energy resources. The plants with capacity less then 99kW does not pay electricity levies.


In the future the main production for electricity will still come from hydropower in Norway. There are few large hydropower schemes left, mostly refurbishment and upgrading projects, so small-scale hydropower will be the dominant new hydropower development. In the period before World War II it was predominantly micro- and mini-hydropower plants, and in the last decade it has been a growing interest in such hydropower plants.

Through the on-going projects the potential for electricity production from micro- and mini-hydropower plants will be determined. Further the technical solutions will get higher quality and operation of the plant will be more reliable. If the procedure of allowance of commissioning a new hydropower plant gets more simplified, more initiatives will also be taken. Private property owners are usually the initiators for new micro- and mini-hydropower plants, so the most important of the project is the economy. The constraints related to lack of experience in construction and operation of a small hydropower plant and knowledge on the new energy marked will be taken seriously to prevent economic disasters for this new owner group.
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