Research projects, Cooperation agreements

Why does Norwegian hydropower play an important role in curbing climate change in Europe?

Norway plays a key role in tackling climate change in Europe, mainly because it relies so heavily on hydropower. Norway gets about 90 percent of its electricity from water, which is unique in Europe.

Right now many European countries are making fundamental changes to their energy supply. To reach climate neutrality by 2050, they're relying more and more on weather-dependent renewables like wind and solar. That shift is increasing the need for flexibility and storage options in the power system. That’s where Norway comes in. Norwegian hydropower can respond very quickly to fluctuations in demand, exporting large amounts of electricity when there’s not much wind or sun in Europe, and then import power when there’s a surplus and prices are low. This ability to balance supply and demand makes Norway a key player in building a climate-neutral, interconnected European energy market.

How does electricity from hydropower reach other countries in Europe?

Norway is linked to the continental European power grid through high-capacity undersea cables called interconnectors. There are direct connections to the Netherlands, Denmark, Germany, and the UK. Through these interconnectors, Norway can use its highly flexible hydropower to help compensate for wind and solar energy fluctuations in other countries.
What aspects are you highlighting and analyzing in the HydroConnect project?

Our work has mainly focused on the medium- and long-term development of the European energy system. We've looked at things like greenhouse gas emissions across Europe, electricity prices in Norway and other countries, and the environmental impact on Norwegian reservoirs and river systems. Some of the key questions we explored were: How can Norwegian hydropower help decarbonize the European energy system? What consequences will participating in the European markets have for the Norwegian electricity system? How will participating in the European markets affect hydropower plant operation and revenue? And finally, what will increased operation mean for environmental conditions in the reservoirs?

What tools were used for these analyses?

For this project, we used our SCOPE Scenario Development energy system model, which was developed at Fraunhofer IEE. It allows us to explore different scenarios for the future role of Norwegian hydropower in the European energy system. We model the hydropower systems in detail and analyze how this flexible and climate-friendly energy source could affect the European electricity system in both the short and long term, looking at impacts in 2030 and 2050. In HydroConnect, we compared a baseline scenario to an expanded one, where Norway adds 11 gigawatts of new turbine and pump capacity, along with new electricity connections to neighboring countries.

One of the most exciting aspects of our work is that we don’t just look at a single version of the future for each scenario but rather explore multiple variants. For example, what happens if electricity demand in Norway rises sharply? Or if there’s lower public acceptance of onshore wind power? We also examine the potential impact of more offshore wind farms, offshore energy hubs, or changing import prices for electrolytic energy carriers like hydrogen. All of these factors can significantly influence how the overall system develops.

How do you manage to model hydropower systems?

To realistically model hydropower, we rely on an extensive database developed at Fraunhofer IEE that covers hydropower plants and reservoir systems across all of Europe. For the HydroConnect project, we reviewed, compared and updated this data specifically for the Nordic system. The database contains information on over 850 hydropower systems — that’s more than 2,800 individual power plants and about 3,600 reservoirs — all compiled from publicly available sources.

Beyond the technical details of the systems themselves, the database also includes complex information about hydraulic connections — meaning how the components are linked together — and information on cross-border market participation, like we see along the Rhine. This level of detail is crucial when realistically simulating how hydropower behaves in our energy system models. It’s especially important for capturing storage capacity and operational flexibility, which are key for understanding how hydropower interacts with variable sources like wind and solar.

What makes HydroConnect special?

The main strength of HydroConnect is its interdisciplinary approach. The project brings together expertise from a wide range of fields, from meteorology and energy and electricity system analysis to environmental studies. That combination allow us to connect the dots across the whole system, linking weather data, electricity demand and generation, hydropower plant operations, and even environmental conditions in the reservoirs, like the formation of ice cracks.

One big advantage is how closely all of this is integrated into our models: Our analyses go from the European system level down to individual catchment areas and specific reservoirs. That gives us a detailed and accurate picture of how hydropower plants can be operated now and in the future.

What results have you seen from the analyses using the SCOPE Scenario Development model?

Let me highlight a few key results. Our analyses show that expanding hydropower in Norway, together with additional electricity connections to other countries, brings clear benefits for the European energy system. Overall system costs go down, and electricity prices become more harmonized between Norway, continental Europe, and the UK. While prices and volatility rise slightly in Norway, they drop significantly in neighboring countries, helping to stabilize the broader market.

Especially during periods when less wind and solar power is fed into the grid, flexible hydropower plays a key role in damping price spikes. What’s interesting is that, even then, electricity prices in Norway only rise moderately. Electricity trading via the undersea cables is also very dynamic. Norway exports and imports electricity regularly over the course of a day or week. Our scenarios also show that the more additional wind power Norway brings online, the more electricity it exports. But if domestic demand goes up, those exports decline. So, the combination of hydropower, wind power and interconnectors is crucial to the country’s future export capability and also to the question of how attractive hydrogen production in Norway can be.

Will hydropower remain an essential part of climate-neutral energy systems in Europe?

Yes, hydropower will remain a key building block of a climate-neural energy system in Europe, both now and in the future. Our analyses show that adding 11 gigawatts of hydropower in Norway and expanding the interconnectors can significantly reduce the need for other investment across Europe. In fact, it could offset the need for around 70 gigawatts of additional capacity in solar, electrolyzers, and battery storage. That really highlights the systemic value of flexible hydropower, and the importance of connecting it effectively to neighboring energy systems.

At the same time, important questions remain about how the benefits of this kind of expansion will be distributed. Who stands to gain the most? Who might bear the potential burdens? And how should social, environmental, and regional impacts be factored in? These issues weren't the main focus of our project, but they are crucial to ensuring that any future developments are both fair and viable.

HydroConnect project

Project partners:
Fraunhofer Institute for Energy Economics and Energy System Technology IEE, Norwegian University of Science and Technology, SINTEF Energy Research, University of Trento

Project funded by:
The Research Council of Norway, Å Energi, BKK, EnergiNorge, Hydro Energi, Lyse Produksjon, Sira-Kvina kraftselskap

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Weitere Informationen:
https://www.fraunhofer.de/en/press/research-news/2025/juli-2025/key-player-in-the-european-energy-market.html