The hydropower market is expected to register a CAGR of more than 2.5% over the period of 2020 - 2025.
- Factors, such as efforts to reduce reliance on fossil fuel-based power generation, coupled with a large number of upcoming projects particularly in the Asia-Pacific region, are expected to drive the market during the forecast.
- However, factors, such as requirement of high capital and operational expenditures, along with long gestation periods, are expected to hinder the growth of the hydropower market in the coming years.
- The large hydropower segment is expected to hold the major market share in 2019, and it is likely to dominate the market during the forecast period.
- More than 81% of the large dams across the globe are single-purpose dams. Converting these dams into hydropower dams is expected to create a huge opportunity for the EPC and hydropower plant operators in the near future. Many countries, such as Canada, Vietnam, and others, have placed hydropower at the forefront of their energy transformation. This, in turn, is likely to create a significant amount of opportunities for the players engaged in the hydropower market in the near future.
- Asia-Pacific has dominated the hydropower market, with the majority of the demand coming from China, India, Japan, and other Southeast Asian countries.
Key Market Trends
Large Hydropower to Dominate the Market
- In 2018, large hydropower installed capacity accounted for more than 50% of the total hydropower installed capacity across the world.
- In line with the hydropower master plan, the Government of Uganda is fast-tracking the development of the identified hydropower sites. The country is currently implementing two flagship hydropower projects including Isimba (183.2 MW) and Karuma (600 MW). Other large hydropower plants being developed include Ayago (840 MW), Orianga (392 MW), Uhuru (350 MW), and Kiba (290 MW). These projects are expected to boost the large hydropower capacity in the region in the coming years.
- Another major project under development is the 1,800 MW Grand Eweng project which is expected to be the fourth largest hydropower plant in Africa following its completion in 2024. Other planned projects include Kpep (485 MW) and Makay (365 MW). With these projects, Cameroon is expected to have added about 3,000 MW of hydropower capacity by 2025.
- Adding to this, the South American region is undergoing the rehabilitation and expansion of some major hydropower projects in Brazil, Paraguay, and Argentina. Itaipu, the world’s largest dam by electricity generation, owned jointly by the governments of Brazil and Paraguay, began a 10-year global modernization project. Such projects are also expected to create a significant demand for equipments and service providers during the forecast period.
- Therefore, factors, such as upcoming large hydropower projects, along with plans to modernize the existing hydropower infrastructure are expected to create an impetus demand for the market studied.
Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to dominat the hydropower market in 2019 in terms of installed capacity and is expected to continue its dominance in the coming years as well.
- Hydropower installed capacity grew by 3.96 GW across South and Central Asia in 2018, continuing a similar growth trend from last year. Similarly, the East Asia and Pacific region continued to be the leader of the world’s hydropower sector in 2018, having added 9.2 GW of installed capacity, more than any other region.
- In 2018, India announced a major new energy policy, formally recognizing large hydropower projects above 25 MW as renewable and setting hydropower purchase obligations for utilities. This, in turn, is expected to drive the hydropower installed capacity in India, as the country plans to increase the share of renewable energy in the coming years.
- Adding to this, there has also been increasing attention on cross-border electricity trade in the subcontinent between several countries in South Asia’s Association for Regional Cooperation (SAARC). For example, Nepal and Bhutan have each signed agreements with India to sell power generated from upcoming hydropower projects, and in 2018, Bangladesh agreed to a new power deal with Nepal.
- Factors, such as upcoming hydropower projects, along with plans to modernize the hydropower infrastructure across the region are expected to drive the market studied during the forecast period.
The hydropower market is partially consolidated. Some of the key hydropower plant operators include Duke Energy Corp., China Yangtze Power Co. Ltd, and Statkraft AS. Similarly, some of the key EPC companies include Bechtel Corporation, and Worley Parsons Limited.
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