The 2025 Infrastructure Report Card from the American Society of Civil Engineers (ASCE) has sent a stark warning to the U.S. hydropower sector. The nation’s dams, a critical component of hydropower generation, received a alarming grade of D+, indicating an urgent need for substantial upgrades and modernization. This revelation comes despite recent federal investments, suggesting a deeper issue at play.
The report highlights the staggering number of dams across the United States—over 92,000—many of which are integral to hydropower generation, flood control, and drinking water supply. However, the aging infrastructure poses a significant threat. By 2025, nearly 70% of these dams will be over 50 years old, raising serious questions about their ability to meet modern safety standards and withstand increasing climate-related threats.
The Infrastructure Investment and Jobs Act (IIJA) of 2021 allocated approximately $3 billion to dam safety and rehabilitation, including hydropower infrastructure upgrades. However, the redirection of $364 million of those funds, along with insufficient overall appropriations, has left a substantial funding gap. This gap threatens energy security and grid reliability, especially considering that hydropower facilities account for 6.2% of total U.S. electricity generation. Aging infrastructure in this sector can lead to reduced energy output and increased operational hazards, compounding the problem.
Climate change exacerbates these issues. Increased flooding, extreme weather events, and shifting precipitation patterns pose significant threats to dam safety and the long-term viability of hydroelectric plants. The report emphasizes the need for modernized dam designs that incorporate climate resilience measures. Innovations such as improved spillway capacity and enhanced monitoring systems are crucial. Additionally, there is a growing interest in pumped storage hydropower (PSH) to provide grid stability, especially as the adoption of intermittent renewable energy sources like wind and solar increases.
ASCE’s report calls for sustained federal investment and stronger state and local initiatives to ensure the safety and efficiency of the nation’s hydropower infrastructure. Recommendations include increased federal funding for dam rehabilitation and hydropower upgrades, implementation of resilience-focused designs, improved data collection on dam conditions, and public-private partnerships to attract additional investment.
The implications for markets are profound. The hydropower sector’s current state could significantly impact renewable energy markets and grid stability. With over 17,000 dams classified as high-hazard potential, the stakes are high. Failure to address these infrastructure gaps could lead to severe consequences for public safety and the nation’s renewable energy future.
For investors, this presents both risks and opportunities. The need for modernization and climate resilience could drive demand for innovative technologies and engineering solutions. Companies specializing in dam rehabilitation, climate-resilient designs, and hydropower upgrades could see increased market demand. However, the funding gap and potential regulatory changes add layers of uncertainty.
Policymakers face a critical decision point. Continued investment and modernization efforts are essential to secure hydropower’s role in the clean energy transition and safeguard communities dependent on these infrastructure assets. The report serves as a wake-up call, underscoring the urgency of addressing these infrastructure challenges to ensure a sustainable and secure energy future.
The hydropower sector’s development will likely hinge on how effectively these recommendations are implemented. The market will be watching closely as policymakers and industry leaders navigate this complex landscape. The future of hydropower, and by extension, a significant portion of the U.S. renewable energy portfolio, hangs in the balance.
