Hydropower, also known as hydroelectric power, is the potential energy of water captured in hydropower plants for generating electricity. It involves the conversion of kinetic energy of flowing or falling water into electrical energy. The most common types of hydropower technologies include impoundment, diversion, pumped storage, and run-of-river. Impoundment hydropower plants rely on dams to store river water in reservoirs. The water is then released to run turbines that activate generators to produce electricity. Advances in hydropower technologies have enhanced the operational efficiencies and minimized environmental impacts of hydropower projects. The global focus on transitioning to renewable energy sources for power generation is driving investments in hydropower capacity additions.
The global hydropower market is estimated to be valued at US$ 225.87 billion in 2023 and is expected to exhibit a CAGR of 18% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Renewable energy transition presents significant opportunities for hydropower market growth over the forecast period. Many countries and regions have outlined ambitious targets to increase the share of renewable energy in their overall power generation mix as part of their efforts to reduce carbon emissions. Hydropower, being a flexible, reliable, and cost-effective renewable energy source, is well-positioned to make a major contribution toward meeting these renewable energy targets. Furthermore, advances in engineering including pumped storage technology and run-of-river hydropower plants have enabled greater incorporation of hydropower sources into existing power grids. These factors are accelerating investments toward expanding global hydropower capacity. In addition, favorable government policies in the form of tax incentives, feed-in tariffs, and hydropower purchase agreements by many countries are further fueling market growth. However, the impact of climate change on hydrology and water availability poses a challenge for the consistent operations of hydropower plants in certain regions.
Segment Analysis
The hydropower market is segmented into large hydropower and small hydropower. The large hydropower segment currently dominates the market, accounting for over 70% share. Large hydropower involves generation of electricity through construction of large dams and reservoirs, which allows generation of massive amounts of electricity to meet large power requirements. This segment is dominating as large hydropower plants have high generation capacity starting from 100 MW.
PEST Analysis
Political: Favorable government policies and regulations promoting renewable energy sources such as tax incentives and compulsory renewable purchase obligations are boosting the hydropower market. Many countries have set ambitious targets to increase the share of renewable energy in their overall energy mix.
Economic: Hydropower is a relatively cheap source of renewable energy compared to other sources. The low operating cost of hydropower once the initial capital investment is made gives it an advantage. Additionally, declining cost of technology is augmenting its adoption.
Social: Concerns around reliability of supply and environmental impact of hydropower plants can act as a restraint. However, growing environmental consciousness and need for cleaner sources of energy are contributing to the growth of hydropower.
Technological: Adoption of innovative turbine technologies allows generating power even from low head sites. Advancements in design and engineering have reduced construction time. Use of IoT enables remote monitoring and performance optimization of hydropower assets.
Key Takeaways
The Global Hydropower Market Size is expected to witness high growth over the forecast period supported by favorable regulations and declining costs. The global hydropower market is estimated to be valued at US$ 225.87 billion in 2023 and is expected to exhibit a CAGR of 18% over the forecast period 2023 to 2030.
The Asia Pacific region currently dominates the market owing to high investments in hydropower projects, especially in China. Countries like China, Canada, Brazil, Russia, and India account for over 60% of the global hydropower installed capacity. For instance, China has the world’s largest installed hydropower capacity and is a major market for leading players.
Key players: Key players operating in the hydropower market are MHI Vestas, Siemens AG, General Electric, ABB, Ltd., EEW Group, Nexans, and A2SEA A/S. These players are focused on new product launches, partnerships, and automation & digitization to capitalize on growth opportunities.
*Note:
1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it
