In a small saucepan, mix the sugar with the water until it looks like wet sand. Bring to a simmer over medium-low heat, stirring gently to dissolve the sugar. Simmer without disturbing for 20 minutes, or until the mixture turns a light amber color.
Spray a small rimmed baking sheet with cooking spray. Spread the chopped hazelnuts out on the baking sheet. Pour the caramel over the hazelnuts and let sit for 10 minutes, or until hardened. Break into shards.