Small Hydropower (SHP) Market Size, Share, Business Outlook, Current and Future Growth by 2023-2030
In a world rapidly shifting towards sustainable energy solutions, small hydropower (SHP) emerges as a pivotal player in the transformation of the global energy sector. As part of the ongoing efforts to reduce carbon emissions and increase renewable energy adoption, SHP has witnessed remarkable growth and offers a promising path to cleaner electricity generation.
Shaping the Future of Renewable Energy
Over the past decade, global initiatives to combat climate change have spurred the adoption of renewable energy policies worldwide. These policies have been instrumental in driving the growth of the hydropower market, making it the leading source of renewable electricity generation, supplying an impressive 71% of all renewable electricity. In 2019 alone, clean electricity generation from hydropower reached an astounding 4,306 terawatt hours (TWh), marking the single greatest contribution from any renewable energy source.
The Rise of Small Hydropower
One of the most significant developments in the hydropower industry over the last two decades has been the shift towards small and run-of-river hydropower projects, with capacities under 25 MW. Small hydropower projects are gaining traction due to their ability to generate clean energy without the need to flood large areas of land or disrupt river flows, making them more environmentally and socially acceptable.
Currently, small hydropower represents approximately 1.5% of the world’s total electricity installed capacity, 4.5% of the total renewable energy capacity, and 7.5% (for < 10 MW) of the total hydropower capacity.
Government Support Fuels Adoption of Small Hydropower
Governments around the world are actively supporting the harnessing of renewable electricity, with an expected renewable energy share of 20-22% in the global energy mix by 2030. Small hydropower is set to play a pivotal role in maximizing renewable energy-based power generation. The COVID-19 pandemic underscored the flexibility and critical role of the hydropower sector in delivering clean, reliable, and affordable energy, especially during crises.
Despite the numerous benefits of SHP, a significant portion of its global potential, approximately 65%, remains untapped. Efforts are underway to promote SHP financing through favorable policy frameworks and process optimization strategies, but more needs to be done to fully exploit its available potential.
Off-Grid Small Hydropower’s Rapid Growth
Small hydropower plants have relatively lower power delivery limits, making them suitable for individual requirements and often deployed off-grid. Globally, off-grid SHP solutions have emerged as a core option to expand access to renewable energy in remote areas not connected to central grid networks.
In remote regions with low energy demand, SHP is particularly viable, offering scalability to meet specific local needs and community requirements. These include providing reliable lighting, improved information and communication infrastructure, enhanced security, increased productivity, and advanced product processing.
Asia Pacific Leads the Way
In 2020, Asia Pacific dominated the global small hydropower market. The top five countries, including China, the US, Japan, Italy, Norway, and Turkey, collectively accounted for more than 65% of the world’s total SHP installed capacity. China, in particular, continues to dominate the global SHP landscape, while India overtook Japan as the fifth largest hydropower producer in 2019, with an installed capacity exceeding 50 GW.
Global Small Hydropower Market: Competitive Landscape
Key players in the small hydropower market include Voith GmbH & Co. KGaA, Velcan Energy, Marubeni Corporation, GE, Siemens AG, ANDRITZ, Toshiba Corporation, Gilbert Gilkes & Gordon Ltd, BHEL, and Natel Energy. Voith GmbH & Co. KGaA, for instance, recently secured a contract for the 8.6MW Vallabrègues small hydro plant in France, set to be operational within the next four years with a power grid connection planned for 2024.
Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2023-2030 – By Product, Technology, Grade, Application, End-user, Region: (North America, Europe, Asia Pacific, Latin America and Middle East and Africa)
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