Evolution of Grid Services for Deep Decarbonization: The Role of Hydropower

As the global energy sector progresses towards deep decarbonization, significant shifts are expected in both electricity generation portfolios and electricity demand profiles. This transformation necessitates a parallel evolution in how systems establish requirements for existing and new grid services to ensure system reliability and, subsequently, procure and compensate resources for providing these services. Hydropower, recognized for its operational flexibility and zero-carbon attributes, stands poised to play a pivotal role in this new transition. Within this context, this paper examines the progress in literature to explore the evolution of grid services for deep decarbonized grid, and the associated market mechanisms for grid service procurement and compensation.

We first review grid service requirements and definitions and conclude that they are likely to evolve as electricity systems decarbonize, both for short-term ancillary services and long-term capacity adequacy. We then provide a deeper discussion of specific grid service market enhancements that may be considered to help maintain reliability and resource adequacy in a deeply decarbonized future. Next, as an example of a mature, clean, flexible resource, we review historical grid service provision by hydropower as well as several factors that drive the ability of hydropower resources to provide grid services. Additionally, we establish several characteristics of deeply decarbonized electricity systems that may impact hydropower valuation and identify several key challenges faced by hydropower resources in the context of unlocking their full potential to support a decarbonized future.

The review concludes by articulating four clear research needs that require ongoing attention to support the clean energy transition. Addressing these research needs is essential for fostering a sustainable, reliable, and resilient low-carbon future.