Harnessing Hydropower Potential: Sustainable Energy from Water Infrastructure

On 29th July 2025, the SIERA Academy Impact Series Webinar titled “Harnessing Hydropower Potential: Sustainable Energy from Water Infrastructure” brought together experts from SIERA Alliance, regulatory voices, and sustainability advocates to explore a largely untapped climate solution—hydropower. As Europe accelerates its decarbonization efforts, the role of water infrastructure in delivering clean, resilient energy is gaining renewed attention.

This session took a comprehensive approach, focusing on how hydropower can be developed in alignment with the European Sustainability Reporting Standards (ESRS), specifically ESRS E1 (Climate), E4 (Biodiversity), and E5 (Circular Economy). Participants examined the technical, ecological, and regulatory complexities surrounding hydropower development and identified practical ways to overcome these challenges through innovation, retrofitting, and data-driven planning.

The webinar also unpacked the intersection between hydropower expansion and the EU’s “Do No Significant Harm” principle under the Taxonomy Regulation, illustrating how new approaches—such as nature-positive investments and hybrid energy systems—can unlock renewable energy without compromising biodiversity or ecosystem health.

This was more than a theoretical discussion—it was a roadmap for asset managers, public authorities, infrastructure operators, and regional planners seeking to integrate climate resilience, digital innovation, and circularity into energy planning. It demonstrated how modern hydropower, when properly managed and regulated, can serve as both an energy source and an environmental restoration tool.

In this blog, we explore the key regulatory drivers, challenges in implementation, emerging opportunities, and proven solutions that were discussed during the webinar—offering a clear, actionable guide to sustainable hydropower development.

Challenges in Implementation

Despite the significant promise of hydropower as a renewable energy source, the path to widespread and sustainable implementation remains fraught with multifaceted challenges. The recent SIERA Academy Impact Series Webinar outlined these complexities, particularly in the context of retrofitting and repowering existing infrastructure such as dams, canals, and flood control systems.

One of the most critical obstacles is regulatory and technical misalignment. Many water infrastructure assets—especially those built decades ago—were never designed to accommodate power generation. Retrofitting them involves significant civil and hydraulic engineering adjustments, often constrained by outdated permits or environmental designations that were not conceived with energy production in mind.
Key difficulties include:

• Legacy infrastructure lacking provisions for energy conversion
• Outdated environmental and land-use permits
• Design limitations that prevent integration of turbines or conduits

Further, hydropower retrofitting is not a one-size-fits-all solution. Geographical, ecological, and operational variabilities across regions complicate the standardization of approaches. Issues like sedimentation, biodiversity impacts, and seasonal water availability require site-specific designs and adaptive management plans, adding to project complexity and duration.
Critical constraints include:

• Highly localized flow conditions and topography
• Environmental protection zones around water bodies
• Conflicting seasonal water demands (e.g., irrigation vs. power)

Another implementation hurdle is institutional fragmentation and lack of cross-sector collaboration. While hydropower sits at the intersection of energy, water, and environment, governance is often siloed—leading to delays, unclear responsibilities, and missed integration opportunities.
Key issues include:

• Water authorities and energy planners working in isolation
• Misaligned project timelines and strategic objectives
• Lack of unified permitting and oversight procedures

Financial feasibility and market dynamics also pose significant challenges. The long investment cycles of hydropower projects, coupled with unpredictable revenue models (especially for small-scale plants feeding into local grids), deter private sector participation.
Investment barriers include:

• High upfront capital costs for retrofits
• Uncertainty in long-term electricity pricing
• Limited access to tailored green financing instruments

Lastly, the lack of accessible technical data and modern digital tools hampers early-stage feasibility analysis and long-term planning. Many public water infrastructure inventories lack sufficient metadata on flow rates, topography, and structural integrity—preventing proactive identification of hydropower opportunities.
Information gaps include:

• Absence of digital water asset inventories
• Incomplete hydrological and hydraulic datasets
• Limited use of modeling tools for preliminary screening

These challenges call for coordinated action across technical, regulatory, financial, and institutional domains to unlock the full hydropower potential embedded within Europe’s aging water infrastructure. The next section of this blog will explore how overcoming these barriers opens the door to substantial opportunities for clean energy generation, grid stability, and climate-aligned infrastructure reuse.

Regulatory Implications for Harnessing Hydropower in the EU

Opportunities from Harnessing Hydropower

Harnessing hydropower presents a future-ready, low-emission energy strategy that offers wide-reaching opportunities beyond electricity generation. When planned and deployed responsibly, it can unlock four major opportunities for sustainability, resilience, and inclusive development:

1. Sustainable Nature-Positive Investment

By integrating ecological safeguards—such as fish ladders, adaptive flow releases, and sediment bypass systems—hydropower projects can align with biodiversity goals. This approach supports the EU Biodiversity Strategy 2030, targeting the restoration of 25,000 km of free-flowing rivers. In doing so, developers enhance regulatory acceptance, strengthen public trust, and become eligible for ESG-linked financing instruments. Nature-positive hydropower transforms ecological challenges into investment-grade opportunities.

2. Climate Resilience with Smart Hybrid Energy Systems

In the face of increasing climate variability and hydrological risks, small-scale hydropower integrated with solar PV, battery storage, and digital monitoring tools can build decentralized, climate-resilient energy networks. This hybrid model supports the EU’s Just Transition goals by powering farms, SMEs, and local grids in remote regions. It also minimizes transmission losses and promotes local energy independence, ensuring energy access even when centralized grids are compromised.

3. Revitalizing Legacy Infrastructure

One of the most cost-effective strategies lies in repurposing old infrastructure—from disused canals to historic mills and decommissioned dams. Such retrofitting requires minimal new construction, avoiding permitting delays and environmental disruption. It enables lower implementation costs and supports circular infrastructure goals, especially in Europe where heritage preservation is key.
Examples from the Netherlands and France highlight how old mills and canals have been successfully converted into modern micro-hydro systems, feeding local grids while conserving cultural landmarks.

4. Rural and Industrial Decarbonization

Hydropower hybridized with solar, wind, or battery systems can address the challenge of centralized energy dependence. This combination improves grid stability, facilitates peak load management, and enhances the value of variable renewables. Crucially, it supports decarbonization of hard-to-reach sectors such as remote agriculture, manufacturing, or logistics. The result is a future-proofed energy infrastructure capable of withstanding climate shocks and price volatility, while delivering clean energy to underserved communities.

In summary, these four interconnected opportunities position hydropower not just as an energy solution, but as a pillar for sustainability, equity, and resilience—from nature-positive investment to local empowerment and climate readiness.

Key Solutions for Harnessing Hydropower Potential

Successfully unlocking Europe’s hydropower potential requires not only vision but also a concrete, adaptable, and ecologically responsible strategy. To overcome the challenges and seize the emerging opportunities, the following solutions—highlighted in the webinar—present a pathway forward for stakeholders across the energy, infrastructure, and environmental sectors.

1. Site-Level Optimization with Minimal Ecological Impact

Sustainable hydropower begins with choosing the right location and minimizing ecological trade-offs.

• Modernization of existing sites instead of building new dams preserves river continuity and avoids extensive ecosystem disruption.
• Nature-based engineering approaches—such as fish-friendly turbines and bypass channels—maintain aquatic biodiversity.
• Incorporating multi-use designs (e.g., hydropower + irrigation or flood protection) maximizes societal value while conserving resources.

2. Smart Grid Integration and Energy Storage

Aligning hydropower with smart grids and decentralized energy systems improves flexibility and reliability.

• Integrating with grid-scale storage systems, such as pumped hydro and battery storage, helps balance intermittent renewable sources.
• Digitalization and AI-based dispatch tools improve forecasting, load management, and energy optimization in real time.
• Hydropower can act as a green “grid stabilizer”, providing peaking capacity and frequency regulation services.

3. Revitalizing Existing Infrastructure

Instead of constructing entirely new plants, revamping Europe’s aging hydropower infrastructure offers both economic and environmental advantages.

• Retrofitting old dams with efficient turbines and automated control systems increases output without increasing environmental risks.
• Eco-hydraulic modeling tools allow operators to simulate impacts and optimize environmental flows.
• Prioritizing modernization aligns with both EU biodiversity objectives and the Water Framework Directive timelines.

4. Leveraging Cross-Sectoral and Transboundary Cooperation

Integrated watershed-level planning ensures sustainable outcomes across regions and uses.

• Shared hydrological data systems and joint basin management plans help mitigate conflicts and streamline compliance.
• Transboundary river systems require collaborative governance to balance energy, agriculture, and environmental needs.
• Including multiple sectors—from municipalities to industrial users—creates more resilient water-energy strategies.

5. Digital Compliance and Reporting

Adopting digital tools for environmental and ESG reporting is no longer optional—it’s essential.

• Software platforms like SustainSuite – part of SIERA enable real-time monitoring, automate CSRD/ESRS reporting, and ensure audit readiness.
• Integrated IoT systems collect and analyze emissions, biodiversity impacts, and operational data continuously.
• This ensures transparency, improves investor confidence, and aligns operations with the EU Taxonomy.

6. Capacity Building and Strategic Advisory

Technical knowledge and stakeholder alignment are foundational for successful implementation.

• Offering training programs for authorities, utilities, and operators builds institutional readiness.
• Advisory services guide stakeholders through complex permitting, financing, and engineering decisions.
• Empowering local actors with science-based decision tools strengthens regional capacity to deliver net-positive hydropower outcomes

By applying these integrated, future-oriented solutions, stakeholders can harness hydropower’s full potential while meeting Europe’s dual goals of climate neutrality and ecological restoration. Hydropower need not be a trade-off between energy and environment—it can be a bridge between the two.

Take the Next Step with SIERA

The SIERA Academy Impact Series Webinar delivered a strong message: harnessing hydropower is not just a clean energy opportunity—it’s a regulatory, ecological, and digital transformation imperative. As Europe works to meet climate neutrality goals, modernize aging infrastructure, and protect river ecosystems, sustainable hydropower has emerged as a cornerstone of resilient energy systems.

SIERA Alliance offers cutting-edge hydropower solutions that balance environmental protection with renewable energy generation—backed by regulatory intelligence, engineering excellence, and digital innovation.

Our Sustainable Hydropower Solutions and Services

• Regulatory-Ready Feasibility and Permitting Support
  Navigate EU regulatory frameworks—from the Water Framework Directive to CSRD and EIA Directive—with end-to-end support for feasibility studies, stakeholder engagement, and biodiversity integration.
• Ecological Retrofit and Micro-Hydro System Design
  Upgrade existing structures or develop new low-impact systems with fish-friendly turbines, bypass channels, and modular micro-hydro units that preserve river health and meet biodiversity goals.
• Smart Grid Integration and Digital Control
  Deploy AI-powered dispatch systems, integrate with grid-scale storage, and optimize peak-load response using digital twin models and smart monitoring platforms.
• ESG-Aligned Reporting with Our Software Based Solutions
  Ensure compliance and investor confidence with audit-ready ESRS-aligned reporting on GHG emissions, biodiversity impacts, and governance risks—automated through SustainSuite – part of SIERA.
• Infrastructure Revitalization and Efficiency Upgrades
  Extend the lifespan of aging dams with high-efficiency turbines, adaptive environmental flow control, and ISO-compliant monitoring systems that reduce emissions and energy loss.
• Advisory and Capacity Building for Utilities and Municipalities
  Run targeted training programs and receive expert guidance on climate adaptation, river basin planning, and sustainable energy transformation—customized to your local needs.

Engineering For A Better Tomorrow

Whether you’re a public utility, private operator, policymaker, or environmental planner, now is the time to unlock hydropower’s full potential. With SIERA Alliance, you gain a trusted partner to transform complex regulatory and ecological challenges into measurable, sustainable energy solutions.

Get in touch today to co-develop a smart, green, and climate-resilient hydropower strategy that drives real impact—for your operations and for our shared future.