Hydropower Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Mini Hydropower, Micro Hydropower), By Capacity (Above 100 MW, Under 10 MW, Others), By Component (Civil Construction, Electromechanical Equipment, Electric, Power Infrastructure, Others), By End-User (Industrial, Utility, Others), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 244.82 Billion
CAGR (2026-2031)	6.89%
Fastest Growing Segment	Utility
Largest Market	Asia Pacific
Market Size (2031)	USD 365.15 Billion

Market Overview

The Global Hydropower Market will grow from USD 244.82 Billion in 2025 to USD 365.15 Billion by 2031 at a 6.89% CAGR. Hydropower is a renewable energy mechanism that generates electricity by harnessing the kinetic energy of flowing water via turbines. The market is primarily driven by the global transition toward net zero emissions and the necessity for grid flexibility to integrate intermittent renewables. This technology ensures energy security by providing reliable baseload power and essential storage solutions. According to the International Hydropower Association, in 2024, total global hydropower capacity grew by 24.6 GW. This figure underscores the sustained investment in developing robust water energy infrastructure.

However, the sector encounters a significant challenge in the form of high upfront capital costs and prolonged construction timelines. Developing these projects requires extensive civil engineering and strict environmental compliance, leading to extended lead times that delay revenue generation. These financial and regulatory hurdles often discourage private investment. Furthermore, increasing climate volatility and drought risks threaten water availability, thereby hindering the consistent reliability needed for broad market expansion.

Key Market Drivers

Accelerating global decarbonization and net-zero emissions targets are fundamentally reshaping the market as nations prioritize renewable baseload capacity to displace fossil fuels. This transition drives substantial investments in new large-scale infrastructure to ensure energy security while meeting stringent climate goals. Hydropower remains a critical component of this shift, offering dispatchable clean energy that complements variable renewables like wind and solar. According to the International Energy Agency, October 2025, total hydropower capacity is projected to expand by over 154 GW between 2025 and 2030 to align with these sustainable development scenarios. This growth trajectory highlights the sector's pivotal role in the broader energy transition, reinforced by sustained installation momentum. According to the International Renewable Energy Agency, March 2025, global hydropower capacity, excluding pumped storage, reached a total of 1,283 GW by the end of 2024.

The expansion of Pumped Storage Hydropower (PSH) has emerged as a critical driver for renewable energy integration, addressing the urgent need for grid stability and long-duration storage solutions. As intermittent renewable generation rises, PSH facilities function as giant water batteries, absorbing excess power during low demand and releasing it during peak consumption to maintain frequency control. This capability effectively mitigates the volatility associated with solar and wind output, making PSH indispensable for modernizing power grids. According to the International Hydropower Association, June 2025, global pumped storage hydropower capacity grew by 5% to reach 189 GW, reflecting the increasing prioritization of flexible storage assets. Governments and utilities are aggressively fast-tracking these projects to enhance system resilience and prevent blackouts in an increasingly electrified world.

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Key Market Challenges

High upfront capital costs and prolonged construction timelines constitute the primary structural barrier restricting the Global Hydropower Market. Unlike modular renewable technologies, hydropower projects necessitate extensive civil engineering works, such as dam and reservoir construction, which demand substantial initial liquidity. Furthermore, rigorous environmental assessments and complex permitting processes significantly extend project lead times, often delaying operational commencement by over a decade. This combination of capital intensity and deferred revenue generation creates a high-risk financial profile that deters private equity and limits the pool of investors willing to commit to long-term infrastructure assets.

Consequently, these hurdles directly hamper market expansion by slowing the conversion of planned pipelines into operational capacity. The difficulty in securing financing for such capital-intensive endeavors results in a development pace that lags behind global energy transition goals. According to the International Hydropower Association, in 2025, the sector faces a projected capacity shortfall of 60 to 70 GW by 2030 against the targets required for the tripling of renewable energy resources. This significant deficit demonstrates how entrenched financial and regulatory challenges are effectively stifling the industry's ability to maintain consistent growth.

Key Market Trends

The integration of Floating Solar Photovoltaic (FPV) systems on existing reservoirs is rapidly gaining traction as a strategic approach to maximize asset utility and mitigate land constraints. This hybridization allows operators to leverage established transmission infrastructure while reducing water evaporation and algae growth, creating a symbiotic energy generation model. By co-locating solar arrays with hydropower dams, utilities can effectively balance the seasonal variability of water flows with solar output, ensuring a more consistent and reliable power supply. The magnitude of this opportunity is significant; according to the National Renewable Energy Laboratory, January 2025, in the 'Floating Solar on US Reservoirs Could Generate Over 1 TW of Power' report, federally controlled reservoirs in the United States alone possess the technical potential to host between 861 and 1,042 GW of floating solar capacity.

Simultaneously, coupling hydropower facilities with green hydrogen production is emerging as a transformative pathway to decarbonize hard-to-abate industrial sectors. This trend involves utilizing reliable, low-carbon baseload power from hydro turbines to drive electrolyzers, converting excess or off-peak electricity into a versatile chemical energy carrier. This synergy not only diversifies revenue streams for plant owners but also provides a chemical storage mechanism that complements traditional grid balancing efforts. Highlighting this industrial shift, according to Andritz, March 2025, in the press release regarding the Rostock EnergyPort cooperation, the company received an order to engineer a 100 MW green hydrogen plant, demonstrating the increasing commercial scale of hydrogen projects facilitated by major hydropower technology providers.

Segmental Insights

The Utility segment is projected to witness the fastest growth within the Global Hydropower Market, driven by increasing mandates for reliable and large-scale renewable energy integration. Governments and major energy providers are prioritizing utility-scale projects to stabilize national grids and complement intermittent sources like wind and solar. According to the International Energy Agency, significant investment is being directed toward modernizing infrastructure and expanding capacity to meet net-zero goals. This focus on centralized power generation ensures consistent electricity supply for industrial and residential consumption, thereby fueling the rapid expansion of the utility sector.

Regional Insights

Asia Pacific maintains a leading position in the global hydropower market, driven by rapid industrialization and rising electricity demand in major economies such as China and India. Governments across the region are prioritizing renewable infrastructure to reduce dependence on fossil fuels and achieve decarbonization objectives. As noted by the International Hydropower Association, these nations consistently contribute the largest share of new capacity additions to the global grid. This sustained commitment to infrastructure development ensures the region remains the primary driver of market expansion.

Recent Developments

• In July 2025, Voith Hydro and the German Aerospace Center (DLR) announced initial successes from their "AutoOpti" research collaboration, which applied artificial intelligence to hydropower turbine development. The partnership demonstrated how intelligent optimization algorithms, originally derived from aerospace research, could significantly refine the design process for hydro components to boost efficiency and performance. This breakthrough highlighted the potential of cross-industry technology transfer in modernizing the hydropower sector. The initiative was positioned as a strategic move to leverage digitalization for creating more customized and effective solutions for power plant operators worldwide.
• In July 2025, Andritz secured a major contract from Hidroeléctrica de Cahora Bassa to rehabilitate the Cahora Bassa hydropower plant in Mozambique, one of the largest generation facilities in Africa. The agreement, valued in the mid-three-digit million-euro range, entailed the supply of five new generators, Francis turbine runners, and associated control systems. The modernization project was designed to increase the capacity of each unit to 433 MW while improving the plant's overall reliability and maintainability. This collaboration reaffirmed the company's leading position in the service and rehabilitation market, supporting the long-term sustainability of the region's energy supply.
• In June 2025, GE Vernova commissioned the first of four 250 MW variable speed units at the Tehri Pumped Storage Hydropower Plant in India. This milestone marked a significant step in the project's expansion, which aims to increase the complex's total generating capacity to 2.4 GW, making it the largest hydropower complex in the country. The deployment of variable speed technology allows for enhanced operational flexibility, enabling the plant to better manage load fluctuations and support grid stability. The successful commissioning underscored the company's commitment to advancing renewable energy infrastructure and delivering large-scale hydropower solutions in key global markets.
• In May 2025, Toshiba Energy Systems & Solutions Corporation announced the completion of the delivery and installation of hydropower generation equipment at the Ninghai Pumped-Storage Power Plant in China. The project involved the supply of four 350 MW hydro turbines and related balance-of-plant systems, which contributed to the facility becoming fully operational. This achievement marked the second pumped-storage plant in the country to utilize the company's technology, following a previous successful installation. The project's completion demonstrated the company's capacity to execute complex, large-scale energy infrastructure projects that are essential for balancing supply and demand in modern electrical grids.

Key Market Players

• China Three Gorges Corporation
• Statkraft AS.
• GE Renewable Energy
• Voith Group
• Andritz AG
• Siemens Energy AG
• ALSTOM Holdings
• ABB Ltd
• Hitachi Ltd
• Toshiba Corporation

By Type	By Capacity	By Component	By End-User	By Region
Mini Hydropower Micro Hydropower	Above 100 MW Under 10 MW Others	Civil Construction Electromechanical Equipment Electric Power Infrastructure Others	Industrial Utility Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Hydropower Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Hydropower Market, By Type:

• Mini Hydropower
• Micro Hydropower

• Hydropower Market, By Capacity:

• Above 100 MW
• Under 10 MW
• Others

• Hydropower Market, By Component:

• Civil Construction
• Electromechanical Equipment
• Electric
• Power Infrastructure
• Others

• Hydropower Market, By End-User:

• Industrial
• Utility
• Others

• Hydropower Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE