The hydro generators market is estimated to be valued at USD 156.22 billion in 2024 and is expected to reach USD 247.55 billion by 2031. It is projected to grow at a compound annual growth rate (CAGR) of 6.8% from 2024 to 2031. The hydro generators market has seen consistent growth with increasing global efforts to reduce carbon emissions and transition to more sustainable energy sources.

Market Driver - Global Shift Towards Renewable Energy Sources

The world is increasingly moving towards sustainable energy sources as many countries aim to reduce carbon emissions and fight against climate change. International organizations like the UN are strongly advocating greater investments in renewable energy infrastructure across the world.

The reliability and operational flexibility of hydropower makes it a viable long-term solution to meet this energy demand from a sustainability perspective. Developed economies in Europe and North America which already have sizable hydropower capacities are now looking to maximize the potential of pumped storage schemes and modernize aging hydro generator plants. Developing countries in Asia, Latin America, and Africa see hydropower as an integral part of their electrification programs to boost economic development in a low-carbon manner.

Countries are formulating policies and providing incentives to developers to harness their untapped hydropower potential through large and small hydro generators. The transition to a greener growth trajectory worldwide is presenting substantial opportunities for expansion of the global hydro generators market.

Market Driver - Expansion of Hydropower Capacity to Meet Rising Electricity Demands

There is a pressing need for increased power generation capacity in many regions worldwide to meet the fast growing demand for electricity resulting from industrialization, urbanization and higher living standards. Nations are recognising the benefits of hydropower such as the ability to provide dispatchable, flexible, and highly efficient baseload electricity generation.

Countries with untapped hydropower potential are making efforts to harness their rivers and harness hydropower potential through construction of new dams, reservoirs, and plants. Pumped storage plants that support integration of variable renewable power like solar and wind into the grid are also gaining relevance.

The industrial sector is increasingly seeking out hydropower to take advantage of competitive tariffs and ensure security of power supply for their energy-intensive operations. Utilities too are investing in hydro assets to diversify their generation portfolio and as a complementary technology to variable renewables in their portfolio. Overall, rising power needs provides significant opportunities for growth of the global hydro generators market to meet this demand through environment-friendly means.

Market Challenge - Environmental Impact on Aquatic Ecosystems and Local Communities

One of the key challenges faced by the hydro generators market is the environmental impact on aquatic ecosystems and local communities. Construction and operation of hydroelectric dams can disrupt natural water flows and negatively impact river habitats. Dams block migration routes for various fish species which are important for the local ecosystem. The reservoirs created by dams also submerge large areas of lands and foliage. Local communities near such projects also often have to be resettled resulting in loss of livelihoods and cultural disruption.

There are also concerns about emissions of greenhouse gases like methane from reservoirs of large hydroelectric projects. Addressing such environmental and social costs presents a complex challenge for the industry. Suitable mitigation strategies need to be planned during project design and consenting stages in consultation with environmental experts and local stakeholders.

Continued monitoring is also important during operations. Finding the right balance between development priorities and protection of environment and communities will be a key factor for success and further growth of the hydro generator market.

Market Opportunity - Retrofitting Aging Hydropower Facilities for Efficiency Upgrade

One of the major opportunities for the hydro generators market is retrofitting aging hydropower facilities for efficiency upgrades. Many hydropower plants across the world have been operational for several decades and their equipment is becoming outdated and inefficient.

Retrofitting such facilities by replacing or refurbishing turbines, generators and other electro-mechanical components provides a good opportunity to boost power output from existing infrastructure. This can help augment power generation capacity without requiring setting up entirely new projects. Retrofitting often allows 10-20% increase in output. It also results in reduced maintenance costs and extending life of the facilities.

With rising energy demands, retrofitting of aging hydropower assets can help bridge the supply-demand gap in a sustainable manner till newer projects are setup. Leading turbine and equipment manufacturers are coming up with specialized solutions tailored for retrofit needs. The retrofitting segment is expected to witness significant investments in coming years as many hydro generator plants worldwide approach end of their useful lifespan.

Focus on innovation and new product development: Continuous innovation has helped top players gain an edge over competitors and capture more market share.

Target emerging markets: With saturation in developed markets, players have focused on high growth emerging economies in Asia Pacific and Latin America.

Strategic acquisitions: Acquisitions have helped players expand their geographic footprint, technology capabilities and service offerings. In 2018, Voith acquired hydro generator portfolio of Spain-based hidroàguila to expand in the Iberian market. This expanded Voith's addressable market and recurring revenue from services.

Focus on services and maintenance: As hydro assets operate for 30-50 years, focus on services is a significant and consistent revenue stream. For instance, Voith's service business accounts for nearly 30% of its hydro revenues and helps maintain strong customer relationships over equipment life cycle.

Insights, By Capacity: Reliability and Cost-Effectiveness Drive Demand for 101 to 250 W Hydro Generators

101 to 250 W capacity segment accounts for 38.4% share of the hydro generators market in 2024. This is due to its reliability and cost-effectiveness for mini-grid and off-grid applications. Generators in this wattage range can continuously power essential loads for homes, villages, remote facilities and island communities with just a small waterway providing the renewable energy source. Not requiring fuel makes these hydro systems immune to price volatility and supply disruptions that plague diesel generators.

Reliability is further increased through the redundancy of having multiple 101 to 250 W turbines that can seamlessly pick up load if one needs maintenance. The total lifetime cost of ownership is substantially lower for 101 to 250 W hydro generators relative to alternatives due to minimal operating and fuel expenses. For remote communities and businesses especially, the 101 to 250 W capacity tier strikes an optimal balance of reliability, economic feasibility, and expandability. This cements its role as a renewable energy workhorse driving the segment's dominance in the hydro generators market.

Insights, By Type: On-Site Generation Captures the Largest Share Due to Grid Independence

The on-site generation segment accounts for 63.5% share of the hydro generators market in 2024, owing to increased demand for energy independence and resilience. Installing a hydro turbine directly at the point of consumption eliminates reliance on transmission and distribution infrastructure that is vulnerable to disruption during natural disasters or sociopolitical instability.

Siting generation on premises allows optimization of output to exactly match customer load profiles. Excess power can be stored in batteries for use when water flows subside such as during dry seasons, further increasing energy security. On-site systems are also amenable to modular capacity expansion over time to maintain an adequate power reserve surplus.

With their self-contained operation independent of third-party infrastructure, on-site hydro generators are the most resilient long-term solution for backup and primary power. This grid independence drives the bulk of customer demand concentrating the segment’s share in the hydro generators market.

• Asia-Pacific's significant investment in small and micro hydropower projects.
• Europe's resurgence in offshore hydropower projects and emphasis on digitalization.
• North America's focus on upgrading existing hydropower facilities.
• Asia-Pacific holds 38% of the revenue share of the global hydro generators market in 2023. Europe is forecasted to expand at the fastest CAGR during the period.
• The portable segment is growing at a CAGR of 7.8% in the global hydro generators market between 2024 and 2031.

The major players operating in the hydro generators market include General Electric Company, Siemens AG, Andritz AG, Voith Group, Toshiba Corporation, Bharat Heavy Electricals Limited (BHEL), Mitsubishi Heavy Industries, Ltd., Harbin Electric Company Limited, Alstom Hydro, The Columbia Machine Works, Inc., Flovel Energy Private Limited, Canyon Hydro, CKD Blansko Engineering, a.s., Toshiba Hydro Power (Hangzhou) Co., Ltd., and WWS Wasserkraft GmbH.

• In January 2022, GE Renewable Energy signed a service contract with Avista Utilities to refurbish four generator units at the Long Lake Hydropower Plant on the Spokane River in Washington State. The primary goal of this refurbishment is to enhance the reliability and efficiency of the plant's equipment, thereby extending its operational life by an additional 50 years.

• By Capacity
  • 101 to 250 W
  • 251 to 500 W
  • 501 to 750 W
  • 751 W and above
  • Up to 100 W
• By Type
  • On-Site Generation
  • Portable