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Rising Demand for Sustainable Energy to Boost Market Growth

On the basis of the scale of the project, hydropower projects are typically classified into large and small hydropower projects. Although the criteria are likely to vary in different regions of the world, hydro projects with a capacity ranging from 10 MW to 50 MW are considered to be small hydropower projects. Due to increasing environmental concerns and demand for sustainable energy production, governments across the world are primarily focusing on increasing investments toward the development of sustainable energy generation projects. In addition, governments in both developed as well developing regions are encouraging small hydropower projects by offering lucrative incentives and project renewal plans– a factor that is expected to aid the growth of the global small hydropower market during the forecast period.

At present, stakeholders operating in the current small hydropower market landscape are highly inclined toward investing in mitigation and research projects to minimize the negative environmental effects of damns on the river flow, fish habitat, and quality of water. In addition, the favorable financial framework is enabling more number of private sector companies to participate in the renewable energy production ecosystem– another factor that is expected to bolster the growth of the global small hydropower market during the assessment period.

At the back of these factors, along with the rise in the number of small hydropower projects in several regions of the world, the global small hydropower market is expected to reach a net capacity of 171 GW by the end of 2030.

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Small Hydropower Plants Gain Popularity as Large-scale Projects Continue to Attract Criticism

One of the primary factors that are likely to shape the overall development of the global small hydropower market is climate change. In addition, advancements in technology are also likely to have a strong influence on the overall adoption of small hydropower systems in the upcoming years. Over the past few decades, the environmental damage and social displacement linked with large-scale hydropower projects is a major cause of concern due to which, small hydropower projects have garnered considerable attention. For instance, the development of the Three Gorges dam in China caused the displacement of 1.5 million people and led to the submersion of multiple factories, waste dumps, and mines. Similarly, large-scale hydropower projects in Brazil, Turkey, and Ethiopia, among others, have received opposition for displacing a large number of people.

Although the global push for renewable energy production continues to shift gears at a rapid pace, players operating in the current small hydropower market are seeking innovative ways to minimize the impact of hydropower projects on the surrounding environment. Due to the negative impact on the surrounding environment, governments are also exploring the potential of hydropower to shift from large-scale dams toward the more natural approach leveraging the natural flow of rivers. At present, run-of-the-river plants are gaining considerable traction and the trend is likely to continue during the assessment period. Novel technologies, including the Industrial Internet of Things (IIoT) are likely to provide a boost to the hydropower industry in the upcoming years. Stakeholders operating in the current small hydropower market landscape are of the opinion that the digitalization of hydropower could play a key role in minimizing carbon emissions and increase the overall output– saving operational and overhead costs. The tectonic shift toward implementing new technologies is likely to pave the way for smarter and efficient small hydropower plants in the future due to which, the demand for small hydropower is moving in the upward trajectory.

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Project Completion and Maintenance Deadlines to Extend amid COVID-19 Pandemic

The COVID-19 pandemic is expected to have a strong impact on the overall growth of the global small hydropower market, especially in 2020. Due to stringent lockdown measures imposed by governments in the second quarter of 2020, the transportation of raw materials and components was largely affected. The repair and maintenance of existing projects and the construction of new projects are expected to witness delays due to the COVID-19 situation. In addition, investments toward small hydropower projects are likely to take a hit in 2020, due to the uncertainty of the market and fluctuating global economy and prices of raw materials. While the demand for sustainable energy is expected to remain high worldwide in the upcoming years, the global small hydropower market is expected to show signs of recovery toward the last two quarters of 2020, as governments continue to lift the lockdown restrictions.

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Analysts’ Viewpoint

The global small hydropower market is expected to grow at a moderate CAGR of ~3% during the forecast period. The market growth will be largely driven by the ascending demand for sustainable energy, mounting environmental concerns, rising pollution levels around the world, and benefits of hydropower over other alternatives. Moreover, an increase in government as well as private investments toward the development of small hydropower projects is another major factor that will provide a boost to the growth of the small hydropower market during the assessment period. However, market players should focus on minimizing the impact of small hydropower projects on the surrounding environment and seek new ways to reduce the displacement of large human population.

Small Hydropower Market: Overview

  • Small hydropower plant (SHP) generates electricity by utilizing moving water. The categorization of hydropower plant differs from country to country, as there is no standard consensus among nations and regions. For instance, in the European Union, France, Norway, France, Italy, and Spain accept 10 MW as the upper limit for SHP installed capacity, while countries such as China and Canada consider 50 MW as the maximum capacity.
  • The small hydropower plant offers a several benefits such as eco-friendly, cost effective, reliable, and long lifespan. Moreover, setting up these plants require low capital investment, as they require minimum reservoirs and construction facilities. Transparency Market Research (TMR) adds that operational and maintenance cost incurred in any small hydropower plant is seldom over 2% to 3% of the overall capital cost.

Increase in Demand for Clean Fuel to Drive Small Hydropower Market

  • Primary energy consumption has increased significantly across the globe over the past few years due to rapid industrialization and urbanization. According to the BP Statistical Review 2019, primary energy consumption increased by 1.6% since 2008. Power generation accounted for a major share of primary energy mix in 2019. Fossil fuels such as oil, gas, and coal are employed in majority of power generation.
  • Depleting crude oil reserves and increase in level of GHG emission have propelled the demand for clean energy resources such as small hydropower
  • Small hydropower plant is an environment-friendly, reliable, economical, and renewable source of energy. Increase in utilization of small hydropower and other renewable sources of energy is estimated to considerably reduce carbon dioxide emissions. The Government of India has set a target to reduce carbon emission by 33% to 35% by 2030, as compared to the levels in 2005.
  • Thus, an increase in the demand for renewable energy is projected to drive the small hydropower market during the forecast period

Low Generation Cost to Boost Small Hydropower Market

  • Small hydropower is also a highly clean and environment-friendly form of renewable energy. It has no fuel cost and low operational & maintenance cost, which makes it a significantly cost-effective source of energy
  • SHPs possess an efficiency over 90%, which make them highly efficient and preferable among other renewable sources of energy
  • Small hydropower plants have a longer lifespan of up to 50 years, which make them reliable and cost-effective source of energy conversion
  • SHPs can be operated continuously at any temperature and wind conditions, which also makes them economical and flexible

Recent Developments, Expansions, Acquisitions, and New Contracts

  • In June 2019, Voith GmbH & Co. won an order to design, manufacture, and supply electromechanical equipment for the small hydropower plant Kabu 16 in Burundi, Africa. Voith’s scope covers generators, valves, two vertical Francis turbines with a capacity of 10 MW each, the governor and automation system as well as the mechanical and electrical balance of plant systems. The company is also expected to supervise the installation and commissioning of the plant.
  • In June 2019, VolgaHydro, a subsidiary of Voith GmbH & Co., inaugurated new production plant in Balakovo, Russia, worth US$ 39.38 Mn. The new facility is estimated to produce and assemble components for hydropower plant turbines. The company is also likely to offer maintenance services and supply equipment to small and large hydropower plants.
  • In January 2017, Aquila Capital, a Germany-based entrepreneurial firm, inaugurated its office in Oslo, Norway. The inauguration is expected to coordinate investment and transaction management as well as operations in the hydropower sector.
  • In January 2017, Andritz Hydro, a subsidiary of international technology Group ANDRITZ, won a contract from the Government utility SNEL (Société Nationale d’Électricité) for rehabilitation of the existing Mwadingusha hydropower plant in the Democratic Republic of the Congo and from Eidsiva Vannkraft AS to supply electromechanical equipment for the new Nedre Otta hydropower plant in Norway.

Asia Pacific to Dominate Small Hydropower Market

  • Asia Pacific dominated the global small hydropower market in 2019. China held a leading share of the small hydropower market in the region in the same year. Expansion of the small hydropower market in China can be primarily ascribed to the abundant availability of hydropower resources and consistent rise in the demand for electricity across the nation supported by rapid urbanization. Furthermore, introduction of favorable initiatives across emerging economies are also boosting the small hydropower market. For instance, the Government of India introduced the Rajiv Gandhi Grameen Vidyutikaran Yogjna (RGGVY) to promote technologies such as small hydropower, which can supply off-grid power to areas experiencing electricity deficit.
  • The small hydropower market in North America is anticipated to expand during the forecast period. The U.S. accounted for a major share of the small hydropower market in the region in 2019. Expansion of the small hydropower market in the U.S. can be attributed to ongoing investments in the development of run of river projects to cater to the rise in the demand for electricity.

Highly Competitive Small Hydropower Market

  • The global small hydropower market is dominated by large number of global players. Key players operating in the small hydropower market include -
    • Alstom S.A.
    • Voith GmbH
    • BC Hydro
    • StatKraft AS
    • Agder Energi AS
    • Ontario Power Generation Inc.
    • Alstom
    • Siemens AG
    • BC Hydro
    • Fortum Oyj.

Small Hydropower Market – Scope of the Report

The latest study collated and published by Transparency Market Research (TMR) analyzes the historical and present-day scenario of the global small hydropower market to accurately gauge its potential development. The study presents detailed information about the important growth factors, restraints, and key trends that are creating the landscape for the growth of the small hydropower market to identify the opportunistic avenues of the business potential for stakeholders. The report also provides insightful information about how the small hydropower market will progress during the forecast period of 2020 to 2030.

The report offers intricate dynamics about the different aspects of the small hydropower market that aid companies operating in the market in making strategic development decisions. TMR’s study also elaborates on the significant changes that are anticipated to configure the growth of the small hydropower market during the forecast period. It also includes a key indicator assessment to highlight the growth prospects of the small hydropower market, and estimate statistics related to the market progress in terms of value (US$ Bn) and volume (GW).

This study covers a detailed segmentation of the small hydropower market, along with key information and a competitive outlook. The report mentions the company profiles of key players that are currently dominating the small hydropower market, wherein various developments, expansions, and winning strategies practiced and executed by leading players have been presented in detail.

Key Questions Answered in TMR’s Report on Small Hydropower Market

The report provides detailed information about the small hydropower market on the basis of a comprehensive research on various factors that are playing a key role in accelerating the growth potential of the market. Information mentioned in the report answers path-breaking questions for companies that are currently functioning in the market and are looking for innovative ways to create a unique benchmark in small hydropower, so as to help them make successful strategies and take target-driven decisions.

  • Which capacity of small hydropower market will emerge as a major revenue generator for the market during the forecast period?
  • How are key market players successfully earning revenues in the competitive global small hydropower market?
  • What will be the Y-o-Y growth of the small hydropower market between 2020 and 2030?
  • What are the winning imperatives of market frontrunners in the small hydropower market?

Research Methodology – Small Hydropower Market

The research methodology adopted by analysts for combining the small hydropower market report is based on detailed primary as well as secondary research. With the help of in-depth insights of the industry-affiliated information that is obtained and legitimated by market-admissible resources, analysts have offered riveting observations and authentic forecasts of the small hydropower market.

During the primary research phase, analysts interviewed industry stakeholders, investors, brand managers, vice presidents, and sales and marketing managers. Based on data obtained through the interviews of genuine resources, analysts have emphasized the changing scenario of the small hydropower market.

For secondary research, analysts scrutinized numerous annual report publications, white papers, industry association publications, and company websites to obtain the necessary understanding of the small hydropower market.

Small Hydropower Market – Segmentation

TMR’s research study assesses the global small hydropower market based on capacity and region. This report presents extensive market dynamics and progressive trends associated with different segments, and how they are influencing the growth prospects of the small hydropower market.


  • 0-10 MW
  • Above 10 MW


  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East & Africa

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Small Hydropower Market

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