Hydropower’s resurgence in 2024, marked by a 10-year high in Europe and significant growth in China, signals a pivotal moment for the global energy sector. The International Hydropower Association’s (IHA) 2025 World Hydropower Outlook reveals a technology stabilizing power supplies amid volatile markets and shifting policies, particularly in the U.S. With global hydropower capacity growing by 24.6 GW last year, the sector’s development pipeline now exceeds 1,075 GW, underscoring its critical role in the energy transition.
China’s dominance in hydropower development, adding 14.4 GW in 2024, highlights the country’s strategic focus on renewable energy. Meanwhile, Africa’s more than doubling of hydropower development in 2024 demonstrates the continent’s growing commitment to renewable energy. The IHA’s report emphasizes hydropower’s unique ability to provide reliable, dispatchable electricity and support grid stability, making it indispensable in the transition from fossil fuels.
However, the U.S. hydropower sector faces challenges, with funding for projects continuing but incentives under threat from recent policy shifts. The IHA notes that nearly 40% of the non-federal hydropower fleet must be relicensed by 2035, a process often hindered by complex and costly regulations. This situation underscores the need for government support and streamlined policies to ensure the sector’s growth and modernization.
The report also highlights the importance of infrastructure planning and upgrades, as the American Society of Civil Engineers’ 2025 Infrastructure Report Card points out that about 70% of U.S. dams are over 50 years old. This raises concerns about meeting modern safety standards and withstanding climate-related threats. Industry experts emphasize the need for collaboration across sectors, integrating advanced grid technology and digital controls to build a more resilient energy infrastructure.
Europe’s hydropower generation reached a decade high in 2024, thanks to exceptional rainfall and policy measures driving momentum for pumped storage. The continent’s energy system is shifting towards a more flexible, renewable-based future, with hydropower playing a crucial role in balancing wind and solar and reducing reliance on fossil fuels.
The implications for markets are profound. Hydropower’s reliability, flexibility, and storage capabilities are crucial for integrating variable renewables like wind and solar, ensuring grid reliability, and supporting the energy transition. As countries shift towards clean energy, hydropower’s role in balancing water and energy demands, particularly in water-stressed regions, becomes increasingly critical. The sector’s modernization and the alignment of legacy assets with emerging innovations will be key to building a resilient and secure backbone for tomorrow’s electrified economy. The 2024 trends in hydropower development and generation underscore the technology’s vital role in shaping the future of global energy markets.