According to a new report published by Allied Market Research, titled, “Hydropower Generation Market: Opportunity Analysis and Industry Forecast, 2020–2027,” The global hydropower generation market size was valued at $202.4 billion in 2019, and is projected to reach $317.8 billion by 2027, growing at a CAGR of 5.9% from 2020 to 2027.
Hydropower generation refers to the process of producing electricity by harnessing the energy of flowing or falling water. It is one of the oldest and most widely used forms of renewable energy, relying on the conversion of kinetic energy from water sources such as rivers, dams, and waterfalls into electrical power through turbines and generators. Hydropower plants vary in size from small-scale installations to large dams capable of generating substantial amounts of electricity to supply homes, industries, and utilities.
The hydropower generation market encompasses the development, installation, and operation of these facilities and related equipment, including turbines, generators, control systems, and infrastructure. Driven by the global push for clean and sustainable energy solutions, the market plays a crucial role in reducing dependence on fossil fuels and lowering greenhouse gas emissions. Hydropower is valued for its ability to provide consistent, reliable, and flexible power, often serving as a key component in grid stability and energy storage through pumped storage systems.
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The growing global demand for clean energy and the need to reduce reliance on conventional fossil fuels like coal have led to a surge in the development of hydroelectric power projects worldwide. In response to increasing environmental concerns, governments across both developed and developing nations—such as the U.S., China, and India—have implemented strict environmental regulations aimed at minimizing carbon emissions. As a result, many countries are phasing out coal-fired power plants and shifting investments toward the expansion of hydropower infrastructure. This transition is driving a notable increase in the demand for new hydropower installations, positioning the sector for significant growth over the forecast period.
The hydropower generation market is experiencing significant growth, driven by several key factors. Rapid urbanization and industrialization, particularly in developing countries like China and India, have led to a surge in electricity demand. To meet this growing need, governments are increasingly investing in renewable energy sources, with hydropower being a central component of their energy strategies. For instance, the World Bank’s approval of a $350 million grant for the Mpatamanga Hydropower Storage Project in Malawi exemplifies such initiatives aimed at boosting electricity generation capacity and supporting economic development.
Technological advancements are also playing a crucial role in enhancing the efficiency and sustainability of hydropower systems. The integration of artificial intelligence (AI) in hydropower operations allows for real-time monitoring and optimization of turbine performance, improving energy output and reducing maintenance costs. Additionally, the development of small and pumped-storage hydropower plants offers flexible solutions to balance supply and demand, especially in regions with variable water availability. These innovations are making hydropower a more attractive option for countries aiming to transition to cleaner energy sources while ensuring grid stability.
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The global hydropower generation market forecast is segmented on the basis of capacity and region. Based on capacity, the hydropower generation market is fragmented into small hydro power plant (up to 1MW), medium hydro power plant (1MW – 10MW), and large hydro power plant (above 10MW). The large hydro power plant (above 10MW) is the leading segment that dominated the global market with more than three-fifths of the total market share in 2019.
The hydropower generation market exhibits diverse regional dynamics, influenced by factors such as resource availability, climatic conditions, infrastructure development, and policy frameworks.
In the Asia-Pacific region, hydropower dominates the renewable energy landscape, accounting for approximately 58.75% of the global market share in 2024. China leads globally with an installed capacity of 426 GW, although recent droughts in provinces like Sichuan and Yunnan have impacted output. Southeast Asian countries, notably Laos, are expanding cross-border hydropower trade, exemplified by Laos’ 17% increase in electricity exports in 2024.
In North America, the United States anticipates a 17% increase in hydropower generation in the Northwest and Rockies regions in 2025, driven by favorable water supply forecasts. Conversely, Canada faces challenges due to prolonged droughts affecting key provinces like Québec and British Columbia, leading to increased electricity imports from the U.S.
Europe’s hydropower output has been hampered by reduced snow cover and milder winters, with countries like Austria experiencing significant declines. In Africa, nations such as Zambia and Zimbabwe grapple with severe droughts impacting hydropower facilities like Lake Kariba, prompting shifts toward alternative energy sources. However, projects like Mozambique’s Mphanda Nkuwa Dam, backed by international investments, signal ongoing commitments to hydropower development in the region
Key players operating in the global hydropower generation market analysis include 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 Gerdau S.A.
The report provides a detailed analysis of these key players in the hydropower generation industry. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, and agreements to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to highlight the competitive scenario.
Key findings of the study
- The large hydro power plant (above 10MW) segment dominated the global market hydropower generation with around 65.0% of the market share in terms of revenue.
- The medium hydro power plant (1MW – 10MW) segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 30.5% from 2020 to 2027.
- Asia-Pacific dominated the global hydropower generation market with around 49.2% of the market share in terms of revenue. In addition, it is also estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 6.2% from 2020 to 2027.
