Europe Small Hydropower Market - Growth, Trends, and Forecasts (2023-2028)

The Europe small hydropower market is expected to register a CAGR of over 4% during the forecast period.

The market was negatively impacted by COVID-19 in 2020. Presently, the market reached pre-pandemic levels.

Key Highlights

• Over the medium term, increased investments and ambitious hydropower targets are expected to drive the market's growth.
• On the other hand, technical drawbacks of the string inverters are expected to hamper the growth of Europe's small hydropower market during the forecast period.
• Nevertheless, in the forecast period, an increasing number of new small hydropower projects backed by government support will likely create lucrative growth opportunities for the Europe small hydropower market.
• Norway dominates the market and would likely witness the highest CAGR during the forecast period. This growth is attributed to the increasing investments, coupled with supportive government policies in the country.

Europe Small Hydropower Market Trends

1-10 MW Capacity Segment to Dominate the Market

• The 1-10 MW capacity segment is projected to be the most abundant small hydropower market during the forecast period. This is attributed to the small-scale decentralized projects deployed in Europe for electrification.
• In 2021, Europe's hydropower installed capacity recorded 224 GW. The total hydropower installed capacity includes hydropower generated for small, medium, and large-scale hydropower projects.
• Europe has witnessed significant growth in the 1-10 MW segment of the small hydropower market, with most installations coming from countries like Norway, France, and Italy. The demand for small hydropower is driven by increasing investments in rural electrification in these countries.
• In November 2021, the European Investment Bank (EIB) announced the funding of EUR49 million to Iniziative Bresciane SpA (INBRE) to construct 12 small run-of-river hydroelectric plants for the enhancement and restoration of 13 river weirs on the Arno river in Tuscany, Italy. INBRE will lend the EIB funds to Iniziative Toscane (Intos) for the project.
• Moreover, in September 2022, Voltalia announced plans to develop a 2.9MW run-of-river hydroelectric power station in the commune of Maripa-Soula in French Guiana. The company signed a 30-year contract with EDF SEI for the sale of electricity, and the contract due to start with the commissioning of the project is scheduled for 2026. The French Energy Regulation Commission (CRE) authorized the deal.
• Therefore, based on the factors mentioned above, the 1-10 MW capacity segment is expected to dominate the Europe small hydropower market during the forecast period.

Norway to Dominate the Market

• Norway has the largest installed hydropower fleet in Europe, which increased its capacity by 396 MW in 2021 including around 70 MW from upgrades at existing plants. About 50 new projects commissioned were small-scale hydro below 10 MW in size, in addition to the 62 MW Jølstra, 42 MW Tolga and 22 MW Herand larger hydropower stations.
• Norway's small hydropower plants were completed on time to meet the deadline for green electricity certificates, a national subsidy scheme covering all renewable energy sources that ended in December 2021.
• In 2021, Norway was the largest hydropower-producing country in Europe, with some 144 terawatt-hours generated. Norway is also the leading European country in terms of installed hydropower capacity. Sweden ranked second in hydropower generation in the region, with 71 terawatt-hours.
• In May 2022, Statkraft, Europe’s largest renewable energy company, commenced the two small-scale hydropower power plants, Vesle Kjela and Storlia, located on opposite sides of the Hardanger mountain plateau. The plants produce enough electricity to power around 4,000 Norwegian households annually.
• Therefore, based on the above-mentioned factors, Norway is expected to dominate the Europe small hydropower market during the forecast period.

Europe Small Hydropower Market Competitor Analysis

Europe's small hydropower market is moderately fragmented in nature. Some of the major players in the market (in no particular order) include Voith GmbH & Co. KGaA, Siemens Energy AG, Andritz AG, GE Renewable Energy, and Electricite de France SA (EDF).

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