Hydropower Market growing at a CAGR of 1.5% from 2025 to 2030

The global hydropower market size was estimated at USD 257.1 billion in 2024 and is projected to reach USD 280.20 billion by 2030, growing at a CAGR of 1.5% from 2025 to 2030. Depleting reserves of fossil fuels have prompted industry to shift to renewable sources.

Depleting fossil fuels used in power generation, such as petroleum and coal, has presented an alarming need for a growing emphasis on energy solutions derived from renewable sources. Rising urbanization, increasing automation, technological advancements, and increasing dependability of critical infrastructures on energy supply, such as transport, water utility, healthcare, and others, have developed a growing demand for uninterrupted power supply. These aspects are expected to drive growth for the hydropower industry in the approaching years.

Concerns regarding climate change and the environmental footprint of multiple industries, including energy and power, are growing rapidly, as is the demand for energy solutions developed through renewable sources. Increasing awareness regarding the lasting impacts caused by processes and operations related to other forms of power generation and the scarcity of multiple resources has also contributed to the growing inclination towards renewable energy.

Governments are offering incentives, such as tax credits, grants, and feed-in tariffs, to encourage the development of new hydropower projects. For instance, in February 2024, the U.S. Department of Energy (DOE) selected 46 hydroelectric projects from 19 states to receive a Hydroelectric Efficiency Improvement Incentive up to USD 71.5 million. In 2023, the U.S. DOE announced a similar incentive for 66 facilities throughout the country.

Component Insights

Based on components, the civil construction segment dominated the hydropower industry and accounted for a revenue share of 33.24% in 2024. The demand for civil construction is driven by the need for robust infrastructure capable of withstanding natural forces and ensuring long-term operational stability. The physical structures essential for hydropower plants, such as dams, reservoirs, and tunnels, play a crucial role in the foundational stages of the projects. Small power projects contribute substantially to the total cost of the civil construction sector. Setting up the entire system requires specific arrangements to allow water to enter the turbines properly, ensuring optimal results.

The electromechanical equipment is expected to experience the fastest CAGR during the forecast period. Electromechanical equipment, including generators, turbines, and transformers, plays a crucial role in converting hydropower into usable electrical energy. As the demand for renewable energy sources rises owing to global environmental concerns and the push towards sustainability, the importance of this equipment has grown substantially.

Capacity Insights

The large and medium capacity hydropower segment accounted for the largest revenue share in 2024, driven by the continued demand for reliable and sustainable energy solutions. Large and medium hydropower plants, typically generating more than 10 MW of power, remain a critical component of national energy grids, providing a stable source of electricity for both urban and industrial needs. These plants are particularly well-suited to meet the increasing demand for renewable energy and support the transition away from fossil fuels.

The expansion of large and medium capacity hydropower is further supported by strong government policies that focus on reducing carbon emissions and advancing sustainable power generation. Additionally, significant investments in infrastructure and technology are enhancing the efficiency and scalability of these projects, making them more viable even in challenging geographical locations.

Regional Insights

The North America hydropower market is expected to experience of CAGR 1.3% during the forecast period. The growth is driven by increasing demand for renewable energy, the presence of established large hydropower infrastructure in the U.S. and Canada, rising climate concerns, and growing focus on developing enhanced energy generation solutions based on renewable resources. The governments in the region are supporting the hydropower industry to meet goals related to reduced carbon footprint and minimized dependency on the availability of depleting fossil fuels.

Hydropower Market Report Scope

Report Attribute	Details
Market size value in 2025	USD 259.51 billion
Revenue Forecast in 2030	USD 280.20 billion
Growth rate	CAGR of 1.5% from 2025 to 2030
Base year for estimation	2024
Historical data	2018 – 2023
Forecast period	2025 – 2030
Quantitative units	Revenue in USD million and CAGR from 2025 to 2030
Report Coverage	Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Segments Covered	Component, capacity, region
Regional scope	North America; Europe; Asia Pacific; Latin America; MEA
Country scope	U.S.; Canada; Mexico; UK; Spain; Russia; France; Netherlands; Germany; China; Japan; South Korea; India; Australia; Brazil; Argentina; Saudi Arabia; UAE; South Africa
Key companies profiled	Siemens; Stakraft Sweden; ANDRITZ; China Three Gorges Corporation; Voith GmbH & Co. KGaA; ALFA LAVAL; ABB; ENGIE; Tata Power; Norsk Hydro ASA
Customization scope	Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope.
Pricing and purchase options	Avail customized purchase options to meet your exact research needs. Explore purchase options