Hydro Generators Market Trends

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.