Rewarding flexibility: policy and power market solutions for the energy transition

As power systems integrate more renewables, hydropower is uniquely positioned to provide flexibility, storage and balancing services that keep grids stable and reliable. Yet current market designs often fail to fully value these contributions, focusing primarily on energy generation. At the same time, outdated policy frameworks can increase investment risk and slow the development and modernisation of hydropower assets.

Addressing these challenges, this session will examine how smarter market design, supportive policy measures and clearer long-term signals can work together to properly value hydropower’s full range of services. Speakers will discuss the practical challenges facing governments, operators and investors, and highlight emerging approaches that are helping to reward flexibility, reduce risk and accelerate the deployment of hydropower for a secure, low-carbon energy transition.

Session objectives

• Examine how current market designs recognise (or fail to recognise) flexibility, storage and system services.
• Explore practical policy and regulatory changes that can better reflect the full value of hydropower.
• Share real-world examples of market mechanisms and reforms that are already rewarding flexibility.
• Identify priorities for governments, system operators and investors to unlock hydropower’s role in the energy transition.