Hydropower market is estimated to be valued at USD 251.58 Bn in 2024, exhibiting a CAGR of 5.1% over the forecast period 2024-2031. The market is witnessing high growth owing to increasing investments in hydropower projects across various countries and growing demand for renewable and clean energy sources. Furthermore, favorable government policies and regulations regarding the development of hydropower infrastructure are driving the market growth.
Global hydropower market growth is driven by increasing investments in hydropower projects and growing demand for renewable energy sources. Major players in the market and governments across the globe are investing heavily in hydropower projects to add new capacities. For instance, China invested over US$ 25 billion in hydropower projects in 2020 to meet its renewable energy targets. There has been rising demand for clean and renewable energy due to rising environmental concerns. Hydropower being a renewable source of energy with almost zero carbon emissions is gaining popularity. Changing consumption patterns along with technological advancements in hydropower equipment are expected to present significant opportunities for the market growth over the forecast period.
Increasing demand for renewable energy sources
Growing concerns over climate change and environmental degradation have increased the global demand for renewable and clean sources of energy. Hydropower, being one of the most established and predominant renewable energy sources, generates electricity from water, and is considered one of the cleaner sources of energy. With the rise in global energy consumption, many countries are investing heavily in developing new hydropower projects to meet their increasing electricity needs through renewable sources and reduce carbon emissions.
Favorable government policies and incentives
Several governments around the world have introduced supportive policies and incentives to promote the growth of hydropower sector. This includes tax rebates, renewable portfolio standards, feed-in-tariffs and research funding. For instance, China has set a target of achieving over 350GW of hydropower capacity by 2030. The European Union also has an objective of generating at least 32% of its total energy from renewable sources by 2030. Countries like Brazil, Canada and Russia are offering various financial incentives to attract private investments in building new large and small-scale hydropower plants. Such favorable regulations boosts widespread adoption of hydropower technology.
High initial investment costs
Setting up hydropower projects requires massive capital investments due to the expenses involved in activities like land acquisition, construction of dams, tunnels, power stations and transmission lines. The construction of large-scale hydroelectric power plants often stretches over several years and entails costs running into billions of dollars. This high upfront cost poses a significant challenge for potential investors and limits the growth potential of the hydropower market.
Environmental and social impacts
While hydropower produces no direct emissions, large dams built for hydropower generation can cause displacement of local communities and significant environmental damage. It disrupts natural river flows and habitats. Other issues include loss of agricultural land and erosion due to submergence. Compliance with stringent environmental regulations also inflates project costs. Growing environmental concerns and opposition from local residents have delayed several proposed hydropower projects.
Increasing investments in small hydro plants
With reducing costs of renewable energy production and availability of suitable sites, investments in small hydropower plants (<25MW capacity) are gaining momentum globally. SHP projects require lower capital and shorter construction periods. Several developing nations are actively supporting construction of run-of-river and reservoir-based miniature hydropower facilities to electrify remote villages.
Advancements in turbine technologies
Ongoing research and development in hydro turbines and power generation equipment have improved both efficiency and environmental performance of hydropower plants. Emergence of new turbine designs like bulb turbines and Kaplan turbines that can harness energy even from low-head sites is encouraging ‘run-of-river’ projects. Pumped-storage hydro utilizes off-peak electricity to pump water uphill to dams for power generation during peak hours. It store renewable energy and ensure reliable base load power supply. Continuous technology enhancements are likely to drive the market growth.
*Link: https://www.coherentmarketinsights.com/market-insight/hydropower-market-5135
Key Developments
- In March 2024, The India-Bhutan joint vision document on energy was launched during Prime Minister of India- Mr. Narendra Modi's visit to Thimphu, Bhutan
- In 2023, Baihetan hydropower station won the 2023 FIDIC Outstanding Project Award
- In 2023, Tata Power Delhi Distribution Limited (Tata Power-DDL) signed a five-year, 200-MW medium-term hydro power purchase agreement (PPA) with NTPC Vidyut Vyapar Nigam Ltd (NVVNL) to meet projected peak demand. The agreement include supply of hydro power to Tata Power-DDL from May to September, beginning May 1, 2023.
- In 2023, the three cascade hydropower stations along the Qingjiang River in Hubei Province, China, achieved their first full-capacity operation on September 23, 2023, with a peak output of more than 3.3 million kilowatts. The three stations are Shiquan, Xihe, and Ankang, and are an important part of the Northwest Power Grid. These are responsible for power generation, power grid peaking, and frequency modulation.
Key Players
Siemens Energy, General Electric (GE), Voith GmbH & Co. KGaA, TOSHIBA CORPORATION, FLOVEL Energy Private Limited, ANDRITZ, Natel Energy, Gilkes, Bharat Heavy Electricals Limited, SNC-Lavalin Group, Kolektor, Mavel, a.s., Canyon Hydro, China Three Gorges, Alfa Laval, Hydro-Quebec, ABB, Engie
