HYDROPOWER GENERATION MARKET ANALYSIS

Market Challenges And Opportunities

However, high operational and capital expenditures are the key restraining factor expected to hamper the market growth.

Global Hydropower Generation Market Drivers:

Increasing demand for electricity across developing countries is propelling market growth

According to the International Energy Agency, worldwide energy utilization increased by 2.3% in 2018, twice than the normal rate in last 10 years. The growth was driven by growing interest for warming and cooling systems in some locales. Growing use of petroleum product secured 70% in the worldwide energy generation, and sustainable power sources contributed for around one fourth of the worldwide energy development. The demand for power increased with a rate of 4% and the share of electricity in global energy consumption reached 20% in 2018.

Growing demand for clean energy to augment market growth

The most significant advantage of hydropower is that it uses a renewable resource, which will never run out. It can also be stored for use later, reducing dependence on other resources, such as oil and coal. Hydropower has an advantage over other renewables because it can operate at full capacity much more quickly than solar or wind energy, a key requirement for meeting fluctuating demand. To generate electricity from hydropower, the water is gathered in reservoirs created by dams and then pushed downward through pipes or tunnels (penstocks) to a lower elevation. As the water descends, it applies pressure to the blades of a turbine. This pressure turns the blades, which in turn spin a generator and create electrical energy. The electricity is then transmitted to the grid via transformers.

Wide application of hydropower is expected to provide significant growth opportunities. Hydropower generation is one of the renewable energy sources that produce electricity. It has high conversion efficiency and is considered to be a sustainable source of energy as it is derived from the renewable resource water. It is a flexible and economical power generation system. It is used in numerous applications including flood control, irrigation and electricity production. Moreover, it is an important part of the world’s electricity generation portfolio as it provides more than 20% of the world’s power.

Growing environmental concerns is another factor that is expected to bring bright market opportunities. One of the most important advantages of hydropower is that, unlike other major sources of electricity that use fossil fuels, it doesn’t produce waste heat or greenhouse gases. It also avoids the problems associated with mining and drilling, such as acid rain and air pollution. The most common way to harness this energy is through large dams that block the flow of a river or lake. When it is in high demand, the power station pumps water uphill to a reservoir that is located at a higher elevation. When there is low demand, the dam releases this water to power turbines that generate electricity.

Global Hydropower Generation Market Restraints:

Environmental problems associated with hydropower generation to hamper market growth

One disadvantage of hydropower system is that the damming of rivers can cause environmental problems. It can affect a river’s ecosystem and disrupt the movement of wildlife and plants. The blocking of the flow of the river can also cut off migratory fish from their habitats, resulting in loss of life. This factor is expected to restrict market growth.

High capital and operational cost to hinder market growth

The dams that house hydropower turbines require a high initial investment. Moreover, its operational expenditures are also very high, due to its regular maintenance and remote operational sites. All these factors are expected to hinder the market growth.