Hydropower Generation Market Size, Share and Trends 2025 to 2034

Hydropower Generation Market Size and Forecast 2025 to 2034

The global hydropower generation market size was worth around USD 296.13 billion in 2024 and is anticipated to reach around USD 431.64 billion by 2034, growing at a CAGR of 3.84% from 2025 to 2034.

Hydropower Generation Market Key Takeaways

• Asia Pacific dominated the global market with the largest market share of 39% in 2024.
• Europe is projected to expand at the notable CAGR during the forecast period.
• By capacity , the large hydro power segment contributed the highest market share in 2024.
• By capacity, the small hydro power segment is expected to grow at a significant CAGR from 2025 to 2034.

How Can AI Improve the Hydropower Generation Industry?

The artificial intelligence integration helps in analyzing data from sensors and equipment to predict potential failures and maintenance needs, minimizing downtime and maintenance costs. AI algorithms helps in optimization of the operation of turbines and generators by adjusting parameters in real-time to maximize efficiency and energy output.

AI assists in improving weather and water flow forecasting, allowing operators to better predict and manage water resources and electricity generation. The integration of artificial intelligence helps in analyzing patterns in energy consumption and adjust hydropower generation accordingly, balancing supply and demand more effectively.

The artificial intelligence has ability to monitor environmental factors such as water quality, fish migration, and ecological impacts, helping to ensure compliance with environmental regulations. By improving efficiency, reducing maintenance costs, and optimizing resource use, AI can lower the overall cost of hydropower generation.

AI assists in developing customized solutions for specific hydropower plants based on unique geographical, environmental, and operational conditions. Overall, AI integration improving the reliability, efficiency, and sustainability of hydropower generation, contributing to a more resilient and cost-effective energy system

Asia Pacific Hydropower Generation Market Size and Growth 2025 to 2034

The Asia Pacific hydropower generation market size was exhibited at USD 115.49 billion in 2024 and is projected to be worth around USD 170.50 billion by 2034, growing at a CAGR of 3.97% from 2025 to 2034.

Asia Pacific dominated hydropower generation market in 2024. Countries like China, India, and Vietnam are leading the way in hydropower capacity expansion, investing heavily in new plants and refurbishing existing ones to boost generation. As part of their carbon neutrality goals, countries in the APAC region are increasingly relying on hydropower as a clean and renewable energy source to reduce carbon emissions. Investments in smart grid technologies and energy storage solutions are also contributing to better integration of hydropower into the grid, improving the stability of energy supply across the region.

Europe is projected to expand at the fastest CAGR during the forecast period. The UK dominated the hydropower generation market in Europe region. The stringent and favorable government regulations led down by the European Union and government is propelling the growth of the hydropower generation market in the region. The rapid urbanization and industrialization are resulting into the growing demand for hydropower generation in the Europe. Moreover, the surge in demand for renewable energy is also paving new way for the growth and development of the Europe hydropower generation market. The government is also taking active participation in approvals of power generation projects. Thus, this factor is boosting the growth of the hydropower generation market in Europe region over the forecast period.

Hydropower Generation Market Growth Factors

The hydropower is one of the renewable energies that is used in the generation of electricity. The surge in demand for renewable energy is resulting into the growing need for hydropower generation. One of the key factors propelling the growth of the global hydropower generation market is the increasing population all around the globe. The growing population requires lot of electricity which is possible due to hydro power generation. Thus, the growth of the global hydropower generation market is expected in the near future.

The hydropower generation process does not emit any type of toxic gases such as greenhouse gases. This factor is augmenting the growth of the global hydropower generation market over the forecast period. The hydro power generation is suitable option for the energy generation for long term as well as short term. Moreover, the hydro power is considered as cost effective and efficient in nature. The hydro power can be used in many ways such as for agricultural and recreational activities. In addition, the government is heavily investing in the energy projects, which is boosting the growth of the global hydropower generation market.

The COVID-19 pandemic had impacted every vertical and areas of industry globally. This is attributed to the supply chain disruption and halt of all manufacturing and production processes all around the world. In addition, due to coronavirus outbreak, the government approvals on certain energy and power projects were also delayed which directly impacted the growth and development of the global hydropower generation market during 2020.

The technological developments and adoption of innovative technologies is creating growth prospects for the hydropower generation market. The developed regions such as Europe and North America are constantly working and implementing favorable policies for the growth of the global hydropower generation market over the projected period. Another factor contributing towards the growth of the hydropower generation market is the growing need and demand for electricity. According to International Energy Agency (IEA), since a decade, the demand for electricity has increased significantly. As a result, this factor is contributing towards the hydropower generation market growth. In addition, the key market players are contributing towards the growth of the market by adopting numerous strategies such as joint venture, partnership, merger, and acquisition.

Report Scope

Key Factors Driving Hydropower Generation Market Growth

• Rising demand for clean and renewable energy sources to minimizing greenhouse gas emissions and combat climate change is a significant driver of the hydropower generation market
• Increasing supportive government policies, subsidies, and incentives for renewable energy projects encourage investment in hydropower
• Innovations in hydropower technology, including improvements in turbine efficiency and the development of small and micro-hydropower systems, boost hydropower generation market growth
• Hydropower contributes to energy security by providing a stable and reliable source of electricity, minimizing dependence on fossil fuels, hence due to rising demand for energy security the hydropower generation market grows at fastest rate in the near future
• Hydropower projects can stimulate economic growth by creating employment opportunity, improving infrastructure, and providing energy for industrial and agricultural activities.
• Rising global electrification has pushed for electrification, especially in developing regions, drives the requirement for accessible and sustainable energy sources like hydropower.
• Hydropower can enhance climate resilience by providing a consistent energy supply even during extreme weather conditions.
• Hydropower plants can quickly adjust their output to meet fluctuating electricity demand, contributing to grid stability and flexibility.
• Many hydropower projects also serve purposes like irrigation, flood control, and water supply, adding to their value.
• Financial support from international organizations and private investors for renewable energy projects, including hydropower, fuels hydropower generation market growth.

Opportunity

Micro and Small Hydropower Development & Expansion of Manufacturing Capabilities

There is significant potential for small and micro-hydropower projects, especially in remote or rural areas, where they can provide localized, off-grid energy solutions. As the demand for energy storage solutions increases, pumped storage hydropower offers an opportunity for large-scale energy storage, balancing supply and demand, and supporting the integration of intermittent renewable sources like solar and wind. Developing countries with abundant water resources and growing energy requirements present significant opportunities for hydropower development, driven by increasing electrification efforts. Growing emphasis on sustainable hydropower projects that minimize environmental impacts, such as fish-friendly turbines and sediment management technologies, opening up new avenues for eco-friendly innovations.

Capacity Insights

The large hydro power segment dominated the hydropower generation market in 2024. The large hydro power is regarded as a hydro power plant whose capacity is more than 10 MW. The power generated with the help of large hydro power plants can be used for the long period of time. This type of plant requires low cost for operation and maintenance. The growing number of hydro power generation projects is supporting the growth of the segment. In addition, the large amount of electricity is generated with the help of large hydro power, which can be used for industrial and commercial purposes. The developed and developing countries such as Brazil, China, and the U.S. are deploying large hydro power on a large scale. Thus, this factor is boosting the growth of the segment over the forecast period.

The small hydro power segment is fastest growing segment of the hydropower generation market in 2024. Energy has become one of the critical need and requirement in today’s era. The growing trend of clean and green energy is driving the demand for small hydro power. The growing concerns for the greenhouse gas emissions and carbon emissions are supporting the growth and development of the segment. The small hydro power is of low cost as compared to other types of hydro power plants. The small hydro power is applicable in diverse sectors mainly for electricity generation. Thus, the demand for small hydro power is growing due to all of these aforementioned factors.

Hydropower Generation Market Companies

• 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.
• Tata Power Corporation

Recent Developments

• In June 2024, Wärtsilä, manufacturing company, revealed the introduction of the large-scale 100% hydrogen-ready engine power plant, which allows the net-zero power systems. According to the IEA World Energy Outlook 2031, hydrogen will be a crucial part of our power systems in the future. The paper states that in order to achieve net zero emissions by 2050, electricity generation must use 17 million tons of hydrogen in 2030, increasing to 51 million tons by that time. By the end of this decade, global renewable energy deployment is expected to quadruple, paving the way for the generation of hydrogen-based, carbon-neutral fuels and the implementation of 100% renewable power systems using excess clean electricity.

Segments Covered in the Report

By Capacity

• Small Hydro Power Plant (Up to 1MW)
• Medium Hydro Power Plant (1MW - 10MW)
• Large Hydro Power Plant (Above 10MW)

By Application

• Commercial
• Industrial
• Residential

By Geography

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)