Small hydropower, also known as run-of-water hydropower, harnesses the energy of flowing water to generate electricity. The main advantages of small hydropower projects include low operation and maintenance costs, reliable power generation, and an environmentally friendly renewable energy source. Small hydropower projects, with capacities ranging from 1 MW to 25 MW, are located near bodies of water with sufficient flow to run turbines. The global demand for clean and renewable energy has increased the need for small hydropower projects that can supplement the power supply from large hydropower projects and other renewable energy sources. The
global small hydropower market is estimated to be worth USD 2.77 billion in 2024 and is projected to reach USD 3.44 billion in 2031, at a compound annual growth rate (CAGR) of 3.1% from 2024 to 2031.
Key HighlightsThe
major players in the small hydropower market are GE Renewable Energy, Voith GmbH, Andritz Hydro, Siemens, and Agder Energi Kraftproduksjon AS.
Key opportunities for the growth of the small hydropower market include development of small hydropower projects suitable for rural electrification and off-grid applications, as well as integration into existing hydropower systems. Governments of countries such as China, India, and Brazil are offering subsidies and feed-in tariffs to encourage small hydropower development.
The small hydropower market is experiencing high growth in the Asia-Pacific region due to supportive policies and subsidies from governments such as China, India, Japan, and the Philippines. North America and Europe are mature markets, where there is active renovation and upgrading of existing small hydro infrastructure.
Market Drivers
Increasing support from governments around the world in the form of subsidies, tax incentives, and feed-in tariff incentives for clean energy projects is a major market driver. Small hydropower development is seen as an economical means to achieve renewable energy targets set by countries. For example, the Indian government aims to install 5 GW of new small hydropower capacity by 2022 to promote rural electrification through the SAUBHAGYA scheme. Rising environmental awareness and efforts to reduce carbon emissions will further increase the demand for small hydropower plants during the forecast period.
PEST Analysis
Political: Government policies encourage the development of renewable energy sources as it reduces dependency on fossil fuels and helps in achieving the Sustainable Development Goals. Tax breaks and subsidies are provided to small hydropower plant developers.
Economics Small hydropower is economically viable as the electricity generated can be fed directly into the grid or used locally. It reduces electricity bills and also helps in electrifying remote areas. Social:
The installation of small hydropower plants does not require relocation of residents, unlike large hydropower projects. Therefore, it is more socially acceptable. A reliable supply of electricity improves the quality of life in rural areas.
Technological: Advances in turbine technology are improving turbine efficiency and power generation capacity. Latest turbine designs minimize environmental damage. Remote monitoring of plants through IoT reduces operational costs.
Regions of focus
In terms of value, the Asia-Pacific region, led by China, India, Japan, and Southeast Asian countries, accounts for the largest share of the small hydropower market. This is because Asia-Pacific holds more than two-thirds of the world's renewable small hydropower potential due to its numerous rivers and geographical conditions with varying elevations. The
fastest growing region,
Africa, is expected to grow at the fastest pace during the forecast period, driven by governments' desire to achieve universal electricity access through renewable energy. Sub-Saharan Africa, in particular, offers great potential for the development of off-grid and mini-grid systems to provide access to remote rural areas where grid expansion is not possible. Increasing investment and adoption of small hydropower will drive the market in the African region.
Small Scale Hydropower Market Detailed InformationRead this Report in Korean About the AuthorPriya Pandey is a dynamic and passionate editor with over three years of expertise in content editing and proofreading. With a bachelor's degree in Biotechnology, Priya has a knack for making content engaging. She has edited documents across various industries including Food & Beverage, Information & Technology, Healthcare, and Chemical & Materials. Priya's meticulous attention to detail and commitment to excellence make her a valuable asset in the world of content creation and polishing. (LinkedIn - https://www.linkedin.com/in/priya-pandey-8417a8173/)
