The small hydropower market includes power generation facilities that produce electricity through conversion of kinetic energy of flowing water at low head and small scale. Utilization of hydropower resources at smaller scales has several advantages such as reliable source, no fuel cost, and lower carbon footprint as compared to fossil fuel based power generation. Rising concerns over environmental pollution and need to shift from non-renewable energy sources have prompted global efforts to develop renewable energy sources including small hydropower.



The Global Small Hydropower Market is estimated to be valued at US$15.5 billion in 2024 and is expected to exhibit a CAGR of 2.8% over the forecast period 2024-2031.



Key Takeaways

Key players operating in the small hydropower market are Voith GmbH, Andritz Hydro, GE, Siemens, Agder Energi, 24H – Hydro Power, Lanco Group, Derwent Hydroelectric Power, StatKraft, and RusHydro.



Growing global energy Small Hydropower Market Demand along with strong policy support for renewable power sources in many countries is fueling adoption of small hydropower plants. Counties like China, Brazil, and India are actively investing in small hydro projects to meet their renewable energy targets.



Technological advancements including improvements in turbine design have enhanced efficiency and power generation capacity of small hydropower units. Adoption of automatic monitoring and control systems is also helping improve plant performance.



Market Trends

Growing focus on distributed power generation to boost investments - In developing economies with inadequate power transmission infrastructure, deployment of distributed hydropower helps meet localized demand more efficiently. This emerging trend is attracting more private sector investments in small hydropower projects.



Adoption of modular design approach to ease project implementation - Modular equipment design allows small hydropower plants to be assembled from prefabricated components at the project site. This helps speed up construction and commissioning of hydropower projects.



Market Opportunities

Off-grid and remote area electrification in developing nations - Small hydropower can effectively support off-grid electrification in rural and remote areas that lack access to centralized power infrastructure. This presents significant market potential, especially across Asia Pacific and Africa.



Renovation and upgrade of aging hydropower infrastructure - Many countries are undertaking renovation and modernization programs to upgrade the performance of existing aging hydropower infrastructure. This is opening up opportunities to replace obsolete equipment with advanced small hydro solutions.



Impact of COVID-19 on Small Hydropower Market Growth

The COVID-19 pandemic has significantly impacted the small hydropower market across the globe. The imposition of lockdowns and transportation restrictions led to delays in ongoing projects and disruptions in the supply chain. This hampered the market growth in 2020. Some of the key impacts of the pandemic include:



- Delayed construction schedules: The lockdowns led to shortage of workforce and disruption in obtaining raw materials at project sites. This caused delays in the commissioning of under-construction small hydropower projects around the world.



- Disrupted supply chain: Movement restrictions affected the transportation of critical components between manufacturing units and project sites. This created shortages and increased the procurement costs for small hydropower developers.



- Decline in power demand: With reduced industrial and commercial operations during the lockdowns, the overall power demand witnessed a steep fall. This lowered the offtake from recently installed small hydropower capacities.



However, with vaccine rollout programs underway, major economies are gradually lifting lockdown curbs to restart economic activities from 2021. This is expected to boost the small hydropower sector in the coming years. Developers are also focusing on automation and digital technologies to enhance efficiency while maintaining social distancing norms on project sites. Financial aid packages announced by different governments will further support capacity additions and help the market recover lost growth.



Geographical Regions with High Concentration of Small Hydropower Market

In terms of value, the small hydropower market is highly concentrated in Asia Pacific region. China dominates the global installed small hydropower capacity, followed by other Asian countries such as India, Japan, Vietnam etc. Favorable hydrological conditions and government incentives have led to large-scale development of run-of-river and mini hydel projects in Himalayan regions and other parts of Asia. Africa is also emerging as a major market, driven by growing off-grid rural electrification needs.



Fastest Growing Regional Market for Small Hydropower

Central and South America regions are expected to be the fastest growing markets for small hydropower over the forecast period. Countries like Brazil, Peru, Ecuador and Chile have enormous untapped hydropower potential due to the presence of Andean mountain ranges and abundant river networks. Governments in these nations are promoting renewable energy development to reduce fossil fuel imports and carbon footprint. Growing infrastructure activities and focus on universal electrification will further accelerate capacity additions from small hydropower sources across Central and South America in the coming years.

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Author Bio:

Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights.

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