May 18, 2024
Hydropower Market

The Renewable Hydropower Market is driven by Rising Environmental Concerns

Hydropower or hydroelectricity is one of the most widely used forms of renewable energy generation that produces electricity from falling or flowing water. Hydropower turbines convert the kinetic energy of flowing water into mechanical energy that drives electric generators to produce sustainable and low-cost electricity. Major advantages of hydropower plants include the ability to provide a flexible source of power to balance the intermittencies from other renewables like solar and wind energy. The global hydroelectric power generation contributes over 16% of the total electricity supply. Hydropower is a renewable and clean source of energy with zero emissions, helping reduce environmental pollution and mitigate climate change risks. With an increasing focus on reducing greenhouse gas emissions and transitioning to sustainable energy sources, many countries are expanding their hydropower capacities.

The global Hydropower Market is estimated to be valued at US$ 260.21 Bn in 2024 and is expected to exhibit a CAGR of 18% over the forecast period 2024 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the prominent trends in the hydropower market is increasing investment towards the construction of mini and micro hydropower plants. Mini and micro hydropower plants can be developed on a small-scale to capture renewable hydropower resources from streams, canals, and water flow. They have significantly lower installation and setup costs compared to large hydropower dams. Many developing nations with distributed water resources are promoting hydropower through decentralized off-grid solutions that can enhance access to electricity in rural and remote regions. The International Finance Corporation (IFC), an investment branch of the World Bank Group, has a strong focus on developing mini-grid and micro-hydropower projects. This will further support the adoption of sustainable and localized distributed hydropower generation systems across the globe. Furthermore, technological advancements in hydro turbines, generators, and automation systems allow maximizing the power output from low-volume water resources through efficient micro hydropower infrastructure.

Porter’s Analysis
Threat of new entrants: The hydropower market requires high capital expenditure for establishing new plants and projects, acting as a barrier for new companies. However, the increasing focus on renewable energy provides opportunities for new players.
Bargaining power of buyers: The bargaining power of buyers is moderate as there are large utilities and corporate buyers in the market. Switching costs are also low.
Bargaining power of suppliers: Major suppliers include turbine manufacturers, engineering & construction companies. Their bargaining power is moderate given the increasing competition and customized requirements of projects.
Threat of new substitutes: Alternate renewable energy sources like solar and wind energy pose a threat, though hydropower offers dispatchable, renewable baseload generation.
Competitive rivalry: The market is dominated by large global players. Intense competition exists based on technology, reliability, performance and pricing.

Key Takeaways

Global Hydropower Market Demand is expected to witness high growth over the forecast period. The Asia Pacific region currently dominates the hydropower market owing to high investments in new projects especially in China.

Regional analysis: The Asia Pacific region is expected to grow at the fastest rate owing to ongoing projects and planned investments especially in China, India, Indonesia and Vietnam. Europe and North America are also sizable markets though growth will be moderate compared to Asia Pacific.

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. MHI Vestas and Siemens AG have strong global presence while GE and others have significant regional market shares.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it