Hydropower Generation Market Analysis, Size, and Share by 2030

[Research Report] The hydropower generation market size was valued at US$ 274.6 billion in 2022 and is projected to reach US$ 368.7 billion by 2030; it is expected to grow at a CAGR of 3.8% during 2022–2030.

Analyst Perspective:

The scope of the global hydropower generation market report focuses on five major regions—North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM). The report includes hydropower generation market forecast by plant type, end user, and regions/countries from 2022 to 2030. Hydropower is currently the world's largest source of renewable energy, but climate change is threatening energy production through droughts, shrinking glaciers, and rapid evaporation. Over 35 countries in the world rely on hydropower for at least half of their national electricity needs. In addition, as many countries seek to reduce their dependence on fossil fuels, hydropower use is increasing by 2.1% each year. The rise in demand for clean electricity, along with the carbon emission reduction targets by individual governments across the globe, is expected to fuel the hydropower generation market growth from 2022 to 2030.

Market Overview:

Hydropower or water energy is a form of renewable energy that uses water stored in dams and flowing in rivers to generate electricity at hydroelectric power plants. The falling water spins the blades of a turbine, which then drives a generator that converts the rotating turbine's mechanical energy into electrical energy. Hydropower is an essential part of electricity generation worldwide. Hydropower is one of the most widely used renewable energy sources in the world. According to the International Energy Agency (IEA), hydropower generation accounts for 17% of the total power generation in the world.

The flexibility and storage capacity of pumped storage hydroelectric power plants is significantly different from any other technology. Higher shares of variable renewable energy will transform and increase the electricity system's flexibility needs which in turn is expected to rise the importance of hydropower. With low operating costs and large storage capacities available, reservoir power plants are considered the cheapest source of power generation flexibility.

New hydroelectric power plants can be a crucial source of cost-effective and efficient energy that supplies flexible low-CO2 electricity. Before the massive cost declines of solar PV and wind, hydropower was the most competitive renewable source of electricity worldwide for decades. Compared to other renewable options and fossil fuels, the development of new large hydroelectric power plants remains attractive to many developing and emerging countries in Asia, Africa, and Latin America. There is still significant untapped hydropower potential for the provision of flexible electricity and to meet increasing demand. New pumped hydroelectric power plants offer the most cost-effective option for storing electricity, ensuring the security of electricity supply and reliable and cost-effective integration of cultivation levels of solar PV and wind. Key hydropower generation market trends include the modernization of hydropower plants, energy transition, and small hydropower plant deployments.

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Hydropower Generation Market: Strategic Insights

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Market Driver:

Growing Establishment of Hydro Power Plants

The global growth in energy demand, driven by population growth and industrialization, necessitates the expansion of energy production. Hydropower can provide a significant portion of the electricity needed to support this demand, contributing to a reliable energy supply. In addition, energy security is a fundamental factor driving the global expansion of hydropower. Nations seek diverse and reliable energy sources to reduce their dependence on fossil fuels, ensuring a stable energy supply for economic growth and national security. Hydropower provides a steady and consistent energy source, less susceptible to price fluctuations and supply disruptions compared to fossil fuels.

In North America and European countries, growth in electricity generation, especially hydropower energy, has been limited for many years. On the other hand, a few Asian countries are planning and constructing new hydropower plants to meet their increasing needs for clean electricity. China, India, Pakistan, and Nepal are engaged in the construction of hydropower plants, including small hydro, large hydro, and PSH, to ensure reliable electricity for the consumers in the region. In addition, the Chinese firm’s such as (Sinohydro Corporation, China Three Gorges Corporation, and others) role in the construction of hydropower projects in Sub-Saharan Africa, Latin America, and Southeast Asia plays an important role in the hydropower generation market. It accounts for approximately more than 50% of new hydropower projects in the above-mentioned regions by 2030.

Segmental Analysis:

Based on plant type, the hydropower generation market is segmented into small hydro, large hydro, and pumped storage hydro plants. The Large hydro segment is expected to dominate the hydropower generation market during the forecast period. The ongoing construction of large-scale hydropower projects in regions such as Asia Pacific and Latin America is anticipated to boost the hydropower generation market growth during the forecast period. In addition, an increase in investment and government support toward the construction of hydropower plants in India is anticipated to bolster the market in the coming years. Financial support, such as grants to enable this infrastructure and flood protection and policies that allow cross-border trade. The Indian states such as Uttarakhand, Punjab, West Bengal, and others also support the expansion of hydropower. In addition, regulations apply for timely dispute resolution to address land access and permitting issues.

Regional Analysis:

According to The Insight Partners’s hydropower generation market analysis, in 2022, Asia Pacific registered the highest hydropower generation market share of 38.5% and is expected to grow at a CAGR of 3.7% during the forecast period, owing to planned and ongoing hydropower plant additions in the coming years. Moreover, Europe and South America accounted for 24.8% and 16.8% of the total hydropower generation market share in 2022. Countries in Asia Pacific are engaged in adopting key strategies toward carbon reduction goals and energy security. To meet the carbon emission reduction goals for 2050, many countries in the region are moving toward carbon-free energy generation and utilization. India is the second-largest country in the hydropower generation market in Asia Pacific, with a total installation of more than 47 GW in 2022. The rising demand for clean power generation in the country is anticipated to fuel the growth of the market in the coming years.

With the rapid growth of renewable energy in Asia Pacific, hydropower and pumped storage hydropower will play an increasingly important role in integrating variable renewable energy and ensuring the reliability of the power system. In many developing countries in the region, energy storage markets are still emerging, but there is enormous potential for development. Installed hydropower capacity is expected to continue region's growing electricity demand, explore electricity export opportunities and to maximize the benefits of a cost-effective and flexible low-carbon energy source.

Hydropower Generation Market Regional Insights

The regional trends and factors influencing the Hydropower Generation Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Hydropower Generation Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Hydropower Generation Market Report Scope

Hydropower Generation Market Players Density: Understanding Its Impact on Business Dynamics

The Hydropower Generation Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Hydropower Generation Market are:

1. Andritz Hydro
2. GE Energy
3. CPFL Energia S.A.
4. Sinohydro Corporation
5. IHI Corporation

Disclaimer: The companies listed above are not ranked in any particular order.

Key Player Analysis:

RusHydro, Hydro-Quebec, BC Hydro, StatKraft, NHPC, EDF SA, China Yangtze Power, A Energi, Enel SpA, Centrais Eletricas Brasileiras SA Andritz Hydro USA Inc, GE Energy, CPFL Energia S.A., Sinohydro Corporation, IHI Corporation, Alstom Hydro, China Hydroelectric Corporation, China Three Gorges Corporation, ABB Ltd, and Tata Power Corporation are among the key players profiled in the hydropower generation market report.

Recent Developments:

Inorganic and organic strategies such as mergers and acquisitions are highly adopted by companies in the global hydropower generation market. A few recent developments by key the hydropower generation market players are listed below: