Small Hydropower Market

Market Overview:

The global small hydropower market size reached US$ 2.3 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 2.8 Billion by 2032, exhibiting a growth rate (CAGR) of 2.43% during 2024-2032. The growing demand for renewable energy, increasing rural electrification and off-grid application, and rising environmental awareness among the masses to prevent the occurrence of pollution are some of the major factors propelling the market.

Small Hydropower Market Analysis:

• Market Growth and Size: The market is witnessing steady growth, which can be attributed to the rising utilization of small hydropower to enhance energy security by diversifying the energy mix and reducing dependence on imported fossil fuels.
• Major Market Drivers: The increasing demand for renewable energy sources and the growing emphasis on reducing carbon emissions are propelling the growth of the market. Additionally, government initiatives and incentives to promote clean energy solutions are further impelling the small hydropower market growth.
• Key Market Trends: Technological advancements, such as innovations in turbine design and efficiency improvements, are driving the adoption of small hydropower systems. Moreover, rapid digitalization and the integration of smart grid technologies are enhancing operational efficiency and reliability in small hydropower plants.
• Geographical Trends: Asia Pacific leads the market, with countries like China, India, and Vietnam leading in installations due to their vast river networks and supportive government policies. However, North America is emerging as a fast-growing market, driven by the need to upgrade aging infrastructure and meet renewable energy targets.
• Competitive Landscape: The market is characterized by the presence of several key players. These companies are focusing on strategic partnerships and mergers and acquisitions (M&A) to expand their market presence and enhance their product portfolios.
• Challenges and Opportunities: While the market faces challenges, such as environmental concerns, regulatory hurdles, and high initial investment, it also encounters opportunities in technological advancements, particularly in the development of micro-hydropower systems, which can cater to remote and off-grid areas.
   

Small Hydropower Market Trends:

Growing demand for renewable energy

At present, the increasing demand for renewable energy sources is creating a notable and positive transformation within the small hydropower market. Besides this, governments, businesses, and individuals are striving to adopt cleaner energy sources and are actively supporting the development and expansion of small hydropower projects. This influx of capital not only facilitates the construction of new facilities but also promotes the rehabilitation and modernization of existing ones. Moreover, the growing demand for renewable energy is encouraging technological innovation within the small hydropower sector. Furthermore, advancements in turbine design, fish-friendly technologies, and water management systems are minimizing the ecological impact of small hydropower installations and increasing their overall efficiency and reliability.

Rising decentralization of energy generation

At present, the rising decentralization of energy generation is profoundly impacting the small hydropower market in a multitude of positive ways. In addition, as communities and industries are increasingly seeking sustainable and resilient energy solutions, small hydropower is emerging as a frontrunner due to its compatibility with decentralized generation models. Unlike large-scale hydropower projects, which often involve extensive environmental and social impacts, small hydropower projects have a comparatively lower ecological footprint and can be designed to harmonize with local ecosystems. The decentralization movement empowers local stakeholders, enabling them to harness the energy potential of nearby rivers and waterways, thus fostering greater energy self-sufficiency. Moreover, energy generation allows for streamlined grid integration, reducing transmission losses and enhancing overall energy system stability. This trend also spurs economic growth by creating opportunities for local job creation, as specialized expertise is required for the design, construction, and maintenance of these smaller-scale facilities.

Increasing rural electrification and off-grid applications

Presently, the increasing focus on rural electrification and off-grid applications is significantly contributing to the positive growth and expansion of the small hydropower market. Moreover, as countries are striving to bridge the energy gap and provide access to reliable electricity in remote and inaccessible rural areas, small hydropower is emerging as a key player due to its suitability for decentralized energy generation. Off-grid communities, often situated far from centralized power grids, benefit from the adaptability and scalability of small hydropower systems, which can harness energy from local water sources like rivers or streams. This localized approach ensures a consistent power supply for essential needs, including lighting, cooking, and communication, and fosters socio-economic development by enabling the establishment of small-scale industries and improving overall quality of life.

Small Hydropower Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global small hydropower market report, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on capacity and component.

Breakup by Capacity:

• Up to 1 MW
• 1–10 MW
   

Up to 1 MW dominates the market

The report has provided a detailed breakup and analysis of the market based on the capacity. This includes up to 1 MW and 1-10 MW. According to the report, up to 1 MW represented the largest segment.

Small hydropower projects with a capacity of up to 1 MW are suitable for powering local communities, small industries, farms, or remote areas. They are often built on rivers, streams, or other water bodies with relatively modest water flow rates. They have a minimal environmental impact compared to large dams and hydropower plants. They usually involve smaller reservoirs, less alteration of natural watercourses, and reduced disruption to aquatic ecosystems. They produce minimal greenhouse gas emissions and have a smaller ecological footprint compared to larger hydroelectric facilities. Additionally, they often have a smaller reservoir size, which reduces the impact on local ecosystems and aquatic life. Furthermore, they offer a sustainable means of electricity generation that balances environmental impact with local energy production and rural development.

Breakup by Component:

• Turbine
• Generator
• Electric Infrastructure
• Intake Valves and Penstock
• Others
   

Turbine holds the largest share in the market

A detailed breakup and analysis of the market based on the component has also been provided in the report. This includes turbine, generator, electric infrastructure, intake valves and penstock, and others. According to the report, turbine accounted for the largest market share. Turbines are mechanical devices designed to convert various forms of energy, typically fluid or gas flow, into mechanical power. They play a vital part in a wide range of applications, including generating electricity and powering aircraft and propulsion systems. Turbines operate on the principle of fluid dynamics, utilizing the kinetic energy of moving fluids to rotate blades or a rotor, which in turn generates mechanical energy. Hydroelectric power plants utilize the energy of flowing water to turn turbines, where water from a reservoir is channeled through the turbine, causing it to spin and generate electricity.

A generator plays a central role in converting the mechanical energy generated by the flowing water into electrical energy. It is designed to harness the power of moving water in streams or rivers to produce electricity for local communities or specific applications. It consists of coils of wire that are placed within a magnetic field.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific exhibits a clear dominance, accounting for the largest small hydropower market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounted for the largest market share.

Asia Pacific held the biggest market share due to the increasing focus on generating renewable sources of energy to fulfill energy demands. Besides this, the rising awareness about the harmful impacts of climate change is contributing to the growth of the market. Besides this, the abundant availability of water resources, including rivers and lakes, which provide suitable sites for small hydropower installations, is supporting the growth of the market. In addition, the rising installation of various heavy machinery in the industries to improve operational efficiency is propelling the growth of the market.

Leading Key Players in the Small Hydropower Industry:

Key market players are investing in research operations to enhance the efficiency and performance of small hydropower systems by developing more advanced turbines, control systems, and monitoring technologies. They are also identifying new project opportunities, especially in regions with untapped hydropower potential. Top companies are focusing on streamlining the project development process, including permitting, environmental assessments, and community engagement. They are also employing predictive maintenance technologies, remote monitoring, and data analytics for the maintenance of existing small hydropower facilities. Leading companies are designing fish-friendly turbines, implementing fish passage systems, and conducting thorough environmental impact assessments to mitigate the ecological impact of hydropower projects. They are also focusing on stabilizing the grid and making renewable energy more reliable by integrating energy storage solutions, such as batteries with small hydropower systems, to meet small hydropower market demand.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• ANDRITZ
• BHEL
• Canyon Hydro
• GE Renewable Energy
• Gilbert Gilkes & Gordon Ltd.
• HNAC Technology
• Mavel
• Siemens
• SNC-Lavalin
• Toshiba
• Voith

Recent Developments:

• In 2022, ANDRITZ announced that it has received an order from HH. Karnchang (Lao) Company Ltd. to provide the electro-mechanical equipment for the Luang Prabang run-of-river hydropower plant.
• In 2020, BHEL announced that it bagged significant orders, valued at INR 3,200 crore, for electro-mechanical work for a hydro-electric project set up in Andhra Pradesh and PumpMotor sets designed for lift irrigation schemes (LIS) in Telangana.
• In 2023, GE Renewable Energy announced that it has signed a rehabilitation contract with PGE Odnawialna S.A. to restore the four 125 MW pumped generators and turbines of the Porabka Zar pumped hydro storage plant in Poland which is expected to start its commercial operations in 2028.

Small Hydropower Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the small hydropower market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global small hydropower market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the small hydropower industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.