Hydropower, a stalwart of renewable energy, has reached new heights in 2024, with global capacity growing by 24.6 GW, according to the International Hydropower Association’s (IHA) “2025 World Hydropower Outlook.” This growth, driven largely by China and Europe, underscores hydropower’s critical role in stabilizing energy markets amid shifting policies and volatile conditions.
China, the world’s leader in hydropower development, added 14.4 GW of new capacity last year, including 7.75 GW of pumped storage hydro. The country’s dominance is evident in its operating capacity of over 354 GW, with an additional 577 GW of projects in various stages of development. Meanwhile, Europe experienced a 10-year high in hydroelectric power generation, reaching 680 TWh, thanks to exceptional rainfall. The continent’s total installed hydropower capacity now stands at 262.7 GW, with pumped storage projects gaining momentum.
The IHA report highlights hydropower’s unique advantages, including its ability to provide reliable, dispatchable electricity and support grid stability. Eddie Rich, CEO of IHA, emphasizes that hydropower remains the largest individual source of renewable electricity generation, accounting for 14.3% of global output, compared to solar (6.9%) and wind (8.1%). He notes that hydropower is crucial for balancing water and energy demands, particularly in water-stressed regions, and plays a key role in the transition from fossil fuels.
However, the report also identifies challenges, particularly in the U.S. While funding for hydropower projects continues, incentives for renewables face threats from policy shifts. The IHA notes that nearly 40% of the non-federal hydropower fleet must be relicensed by 2035, a process often hindered by complexity and cost. Moreover, the American Society of Civil Engineers’ 2025 Infrastructure Report Card highlights concerns about the age and resilience of U.S. dams.
Industry experts stress the importance of infrastructure planning and modernization. Charles Hunsucker, president of Power Systems at Rehlko, advocates for pairing legacy hydro assets with advanced controls and high-efficiency turbine runners. Mike Silvestrini, co-founder of Energea, underscores the challenges and importance of careful design and management for run-of-river hydro projects.
As the global energy landscape evolves, hydropower’s role in enabling net-zero targets and securing energy systems is set to increase. The IHA report calls for economic and regulatory levers to enable reinvestment, digital upgrades, and climate resilience. The growing share of variable renewable energy is reshaping the investment environment, influencing project bankability, risk appetite, and infrastructure planning.
In this dynamic context, hydropower’s reliability, flexibility, and storage capabilities make it an indispensable complement to variable renewable sources like wind and solar. As countries shift toward clean energy, hydropower’s ability to balance water and energy demands will be increasingly critical. The sector’s development will hinge on addressing licensing and policy challenges, modernizing infrastructure, and fostering collaboration across sectors.