Hydro Energy Trend

Hydro Energy Regional Trend Overview

Get the latest insights on price movement and trend analysis of Hydro Energy in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Hydro Energy Trend for the First Half of 2024

India's hydroelectricity output saw its steepest decline in at least 38 years, dropping 16.3% in the fiscal year ending March 31 due to erratic rainfall. This reduction in hydropower, the country's largest clean energy source, coincided with a slight decline in the share of renewables in the energy mix, marking the first drop since Prime Minister Modi's 2015 commitments to boost solar and wind capacity.
 

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With reservoir levels at a five-year low, hydro power's share in total energy production fell to a record low of 8.3%, while reliance on coal increased, with coal power generation rising 13.9% in 2023/24. India missed its 2022 renewable energy target, and its dependence on fossil fuels reached a five-year high amid a global decline in hydropower driven by lower rainfall and warmer temperatures linked to the El Nino weather pattern.

Analyst Insight

According to Procurement Resource, given the seasonal uncertainties with rampant climate change, the Hydro Energy output looks riddled for the upcoming quarters as well.
 

Hydro Energy Trend for the Second Half of 2024

In the second half of 2023, the hydropower sector continued to grapple with significant challenges as drought conditions persisted across key regions, particularly in China and the United States. China, which accounts for a significant share of global hydroelectricity, experienced a further decline in hydropower generation, with a production drop of about 7% for the entire year due to ongoing droughts affecting the southwestern regions. Similarly, in the United States, hydropower output in the northwest fell by 6%, driven by unusually dry conditions, although California saw a boost in hydroelectric generation due to improved rainfall.

Despite these difficulties, Brazil, the world's second-largest hydropower producer, maintained strong production levels, benefiting from favorable water reserves in its dams. The global slowdown in hydropower expansion was exacerbated by aging infrastructure, environmental concerns, and regulatory barriers, particularly in regions like China, Latin America, and Europe. This decline in hydropower output led many countries to increase reliance on fossil fuels, such as coal and gas, to meet their energy demands, underscoring the ongoing challenges in achieving a balanced and sustainable energy mix. As the sector faces these hurdles, the importance of modernizing infrastructure and addressing climate-related risks becomes increasingly evident for the future of hydropower.

Analyst Insight

According to Procurement Resource, the Hydro Energy sector is expected to strangle even more as the climatic conditions grow more and more dry and unpredictable.
 

Hydro Energy Trend for the First Half of 2023

In the first half of 2023, global hydropower generation faced significant challenges due to drought conditions and dry weather patterns, leading to an overall decline in output. China, the world's largest producer of hydroelectricity, experienced a severe 22% drop in hydropower generation compared to the same period in 2022, largely due to prolonged droughts since late 2022. This decline had a considerable impact on global hydropower production, given China's substantial share in the market. Similarly, Vietnam saw an 8% reduction in hydropower output due to ongoing droughts, further contributing to the global downturn.

In North America, the U.S. and Canada also reported reduced hydropower generation, with the U.S. experiencing a 7% decrease attributed to drier conditions in key hydro-producing states. Meanwhile, Europe saw below-average hydropower generation in most countries, except for Spain, which managed a significant recovery with a 37% year-on-year increase. Overall, the first half of 2023 highlighted the vulnerability of hydropower to changing weather patterns, raising concerns about energy security and increasing reliance on fossil fuels in some regions.

Analyst Insight

According to Procurement Resource, Global Hydro Energy generation is likely to remain challenged in the upcoming times as well. Changing weather patterns are not supporting hydropower generation desirably.
 

Hydro Energy Trend for the Second Half of 2022

The growth of the hydropower sector is crucial for meeting the net zero emissions target. The year 2021 witnessed the addition of many more hydro energy facilities, especially by China, but the pace fell slow in 2022 as the covid 19 reemerged and outdoor activities had to shut down completely. Still, Asia performed a lot better than America and Europe in terms of hydro energy installation.

European people faced the mightiest power bills in H2 2022. Since, the start of the Russia-Ukraine conflict, gas prices have risen sharply. The conventional gas-fired power plants led to a tremendous rise in electricity bills causing the producers to shift to other renewable forms.

Most EU countries like Austria had to rely on imports because hydroelectricity plants were producing less electricity than usual due to rivers drying up. The same cases were seen across many countries, thereby driving the prices of hydroelectricity/ hydro energy to an inclined trajectory during the concerned period.

Analyst Insight

According to Procurement Resource, the trend for hydro energy are expected to remain high in the coming quarter. Considering the growing demand for renewable sources amid unstable gas and oil prices are forcing many producers to entirely change from conventional gas-fired plants.
 

Hydro Energy Trend for the First Half of 2022

According to the International Hydropower Association, over the last 5 years, the world’s hydropower growth has averaged 22 gigawatts. This year saw a surge in the hydropower output in China due to record-breaking rainfall. The international coal prices raised the energy bills globally; however, the reduced demand from the industrial powerhouse China kept a lid on the crude oil and coal prices.

China received record rainfall during the first half of the said year, lifting the hydro energy generated by 18% Y-O-Y basis while the thermal production dropped by 4%. Hence, the trend of hydro energy remained afloat throughout the Chinese domestic market as the current economic and political conditions are causing the manufacturers to pivot to renewable energy sources rather than conventional coal.

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