Small Hydropower Market Size, Share & Industry Analysis By Capacity (Below 1 MW, 1 - 10 MW) and Regional Forecast, 2019-2032

The global small hydropower market size was valued at 170 GW in 2018 and is projected to reach 275 GW by 2032, exhibiting a CAGR of 3.61% during the forecast period of 2019-2032. By capacity, below 1 MW segment has contributed 20.2% market share in 2018. The market is surging due to increasing demand for renewable energy sources and rural electrification, the applications in industrial and residential sectors, along with environmental concerns and support from the government, driving the market growth.

Energy is one of the most critical economic, environmental and development issues facing the world today. Clean energy generation and deployment of new facilities are recognized as a key factor to suffice electricity consumption globally. In both developing and developed countries, the need for green and ecological sources of energy is growing due to rising concerns over climate change and GHG emissions by traditional fossil fuels.

Such circumstances highlight the importance of diversification and non-renewable energy independence. According to the International Renewable Energy Agency (IRENA),  hydropower is the most utilized form of renewable energy and has an installed capacity of approximately 1.3 TW in 2018 and production of about 4.2 TWh in 2017. On the other hand, hydropower plants require adequate design and planning to counter adverse effects on the environment and ensure sustainable operation.

Small Hydropower provides economic, social, and environmental benefits, such as increasing industrial competitiveness, creating jobs for all and raising incomes. It is an established technology, which can efficiently be designed, operated, and maintained locally and has enormous untapped potential in various areas.

Small hydropower has comparatively lower electricity generation prices as compared to other off-grid technologies. It is flexible and can be adapted to various geographical and infrastructural circumstances. SHP has vastly increased rural electrification, improved living standards and production conditions, promoted rural economic development, alleviated poverty as well as reduced carbon emissions. Small hydropower is favored by developing countries as it possesses vast capability and is monetarily feasible & efficient technology.

There is no standard classification on the basis of capacity for ‘small’ hydropower & ‘large’ hydropower and definition of ‘small’ hydropower varies from country to country. However, the description of SHP systems of any given country is important because it can determine which hydropower plants are covered by support policies and environmental regulations according to their sizes. For the given report, small hydropower total market capacity capped below 10 MW.

Based on capacity small hydropower market is divided into below 1 MW and 1 – 10 MW.  SHP having a capacity between 100kW to 1MW also referred to as mini-hydro, are readily used either for stand-alone, mini-grid or grid-connected operations. Small hydropower having a capacity between 5 kW to 100 kW, also termed as micro-hydro, provides power for a small community or rural industry in away from the grid. SHP having a capacity from a few hundred watts to 5 kW, known as pico hydro, is often used in remote areas for off-grid applications. 1 MW – 10 MW small hydropower units are widely operated on small rivers or water reservoirs, and it feeds power into the grid to contribute for peak demand period.

"1 – 10 MW Small Hydro Power Segment to hold Substantial Share Across the Globe"

Small hydropower having a capacity between 1 – 10 MW dominates the small hydropower market size. This segment accounts for nearly 80% share of the production capacity of small hydropower. The investment costs per kW of 1 – 10 MW small hydropower plant projects tend to be lower than below 1 MW small hydropower. 1 – 10 MW small hydropower has a higher head and installed capacity.

The Levelised Cost of Electricity (LCOE) is lower for 1 – 10 MW small hydropower as compared to below 1 MW small hydropower. The operations and maintenance cost of 1 – 10 MW small hydropower is lower as compared to below 1 MW small hydropower. The 1 – 10 MW SHP market growth is more significant due to overall less cost when compared with below 1 MW small hydropower. 

Regional Analysis

"Asia Pacific is Likely to Hold Major Share Over the Forecast Period"

Asia-Pacific holds the lion's share in the global industry landscape of the SHP market. Over the last decade, China witnessed to lead the regional market share as the Chinese government has always attached great importance to the construction of small hydropower. SHP construction in China was initially aimed at supplying electricity for mountainous areas in collaboration with small-scale water conservancy projects. Our market analysis shows that, the Pacific region has the lowest share of installed capacity of small hydropower while Asia has the highest installed capacity of small hydropower. Combined Asia and Pacific region accost for more than 65% of the world’s installed capacity.

Japan and India have less developed small hydropower, with nearly only 35% and 18% of small hydropower potential. India is expected to witness the growth of small hydropower on account of government initiatives like Rajiv Gandhi Grameen Vidyutikaran Yojana and Small Hydro Power (SHP) Programme by the Ministry of New and Renewable Energy. Rajiv Gandhi Grameen Vidyutikaran Yojana in India is used for rural electrification and promotes utilization of renewable energy like small hydropower, solar, etc. for mini-grid or off-grid applications.

The Ministry of New and Renewable Energy of India is encouraging the development of small hydro projects both in public as well as the private sector. Equal attention is being paid to grid-interactive and decentralized projects. A number of small hydro projects have been set up in remote and isolated areas, mainly in Himalayan & Western Ghat region of India. While these projects are developed by various state agencies responsible for renewable energy, the projects are generally maintained by entrepreneurs or by the local community’s / Gram Panchayat / tea garden owners’ participation in India. The Asia-apcific region will have significant market size during the forecast period.

Europe is expected to witness substantial growth as a result of favorable government regulations. The 2009 Renewable Energy Directive of the European Union states that all member nations should increase the share of renewable energy to 20%. European Small Hydropower Association has been set-up to define a clear and consistent Stream Map for the small hydropower sector in Europe, applicable to the prospects of the EU Energy and Climate Packet regulations based on the real situation of the SHP sector at present and the recommendations for the future.

Latin America and North America have the third and fourth-largest installed capacity.  Africa and Middle-East have the least installed capacity of small hydropower. Europe has substantial utilization of small hydropower, with nearly more than 45% of overall market potential installed. The USA has developed more than 50% of its small hydropower potential but installed capacity has remained stagnant in the past few years. The USA is expected to utilize the untapped small hydropower potential in the coming years. Hydropower Regulatory Efficiency Act of 2013 in the USA makes it easier to set-up hydropower up to 50 MW.

Several refurbishment and upgradation of small hydro projects in going in the USA. Brazil has greatly undeveloped small hydropower potential reaching around 30%.  Less than 5% of the small hydropower potential of Middle-East and Africa has been developed. In 2014, the United Nations Development Programme was implementing a project to promote investment SHP based mini-grids for rural electrification in the Democratic Republic of Congo, and this project is funded by the GEF Trust Fund.

South Africa has a 5 times bigger potential of SHP as compared to presently installed small hydropower capacity. SHP plants in South Africa can either be standalone or in a hybrid combination with other renewable energy sources like solar energy. SHP has a large size of unexplored capabilities, and approximately less than only 40% of its total market potential has been developed globally.

Key Market Drivers 

Some of the leading companies in small hydropower market are Innergex, Blue World Power Energy and Resources, Gravity Renewables, Pernix Group, Inc., Dulas Ltd, Voltalia, Velcan Energy, SN Aboitiz Power, Inc., Green Highland Renewables Ltd, Voith Group, Mavel a.s., RusHydro, Marubeni Corporation, PNOC Renewables Corporation, Statkraft, Renewable First Ltd, Energy Eastern Europe Power GmBH, Him Urja Private Limited, and Vindhyachal Hydro Power Pvt. Ltd.

LIST OF KEY COMPANIES PROFILED :

• Innergex


• Blue World Power Energy and Resources


• Gravity Renewables


• Pernix Group, Inc.


• Dulas Ltd


• Voltalia


• Velcan Energy


• SN Aboitiz Power, Inc.


• Green Highland Renewables Ltd


• Voith Group


• Mavel a.s.


• RusHydro


• Marubeni Corporation


• PNOC Renewables Corporation


• Statkraft


• Renewable First Ltd


• Energy Eastern Europe Power GmBH


• Him Urja Private Limited


• Vindhyachal Hydro Power Pvt. Ltd.

Report Coverage

The deployment of small hydropower has been mainly in the utility segment for increased electricity generation. Small hydropower is majorly used for rural electrification. Small hydropower either feeds power in the grid or connected with a mini-grid. Some of the small hydropower has been used for off-grid applications. With more number of international organizations promoting the use of small hydropower and it has spread in countries all over the world, the opportunity for the small hydropower market has also increased. The current market trends ensure the growth of the small hydropower market at a reasonable rate all over the world.

The report provides qualitative and quantitative insights on the small hydropower industry and detailed analysis of market size, market growth rate & market trends for all possible segments in the small hydropower market. The market is segmented by capacity and geography. On the basis of capacity, the global small hydropower market is segmented into below 1 MW and 1-10 MW. Geographically, the global small hydropower market is segmented into five major regions, namely, North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. The regions are further categorized into countries.

Along with this, the report provides elaborative analysis of the market dynamics and competitive landscape. Various key insights presented in the report are the recent industry developments such as mergers & acquisitions, the regulatory scenario in key countries, investment scenario, technological advancement, and key industry & market trends.

Segmentation

Key Industry Developments

• In July 2021, KONČAR, a Croatian transport, electrical, and energy company, announced its first-ever contract in Japan to manufacture, supervise, and design three generator assemblies for two small hydropower plants (SHPPs). The project will complete its first stage after the synchronous generator with nominal power of 5.2 MVA will be commissioned, while the second stage will be completed after the synchronous generator with nominal power of 5.2 MVA will designate, according to the firm.


• In March 2021, Zarchob small hydropower plant has been successfully commissioned in Uzbekistan, according to the developer of Uzbekistan’s state hydropower. The project is a part of the national energy strategy of Uzbekistan to produce electricity from renewable sources by 2030. The project further aims to produce 5GW of solar energy, 3.8GW of hydro energy, and 3GW of wind energy.


• In February 2021, Isagen SA, a Colombian power company, secured a contract to acquire two 19.9-MW small hydropower plants (HPPs) based in the department of Antioquia. With this project, Isagen is expanding its footprint in non-conventional renewables, and the total investment of the project is around COP 700 billion or about USD 194.8 million.


• In January 2021, A three-year business plan has been adopted by Elektroprivreda Bosne i Hercegovine (EPBiH), an state power utility. The plan is having investments of some EUR 850 million or around USD 1009.4 million and electricity output around 18,433 GWh. The project involves small hydropower plants (SHPPs) construction on the Neretvica river, continuing the hydropower plant (HPP) work, and creating new opportunities on the Vlašić wind farm.