01 Growing Role of Hydropower in Grid Flexibility and Energy Security Hydropower is increasingly being valued not only for renewable electricity generation but also for its ability to provide dispatchable power, balancing services, and system flexibility. Reservoir and pumped-storage facilities can respond to changes in electricity demand and help grids accommodate increasing shares of variable solar and wind generation. In June 2026, the International Hydropower Association reported that global hydropower capacity reached 1,469 GW at the end of 2025, while pumped-storage capacity surpassed 200 GW as demand for grid flexibility increased.
02 Increasing Investment in Pumped-Storage Hydropower Pumped-storage hydropower is gaining importance as a long-duration energy-storage technology for electricity systems with growing renewable penetration. Its ability to store electricity and release it when needed positions it as a complementary technology to intermittent renewable generation and conventional battery storage. In June 2026, the International Hydropower Association reported a global pumped-storage development pipeline of 621 GW, including 243 GW under construction.
01 Rising Electricity Demand and Expansion of Renewable Power Support Hydropower Development Growing electricity consumption from industrial activity, electrification, digital infrastructure, and data centers is increasing the need for reliable low-carbon electricity. Hydropower can provide firm renewable generation while also balancing variable renewable sources, strengthening its role in electricity-system expansion.
01 High Capital Requirements and Long Project Development Periods Limit New Capacity Large hydropower projects require substantial upfront investment and typically involve lengthy planning, permitting, construction, and environmental-assessment processes. These requirements can increase project risks and delay commissioning, particularly where financing conditions and regulatory approvals are uncertain.
01 Modernization of Aging Hydropower Plants Creates Expansion Opportunities Modernizing existing hydropower facilities provides an opportunity to increase generation efficiency, extend plant operating life, improve reliability, and add greater grid-flexibility capabilities without relying entirely on new large-scale projects. Replacement of aging turbines and generators is becoming particularly important across mature hydropower markets.
01 Climate Variability and Extreme Weather Threaten Hydropower Reliability Hydropower generation depends directly on water availability, making plants vulnerable to droughts, changing rainfall patterns, floods, landslides, and shifting seasonal river flows. Climate-related changes can reduce generation during periods of low water availability while extreme weather can damage infrastructure and disrupt plant operations.
June 2026 June 2026: Voith Hydro received a follow-on contract from Iberdrola Generación S.A. to modernize the remaining two pump-turbines at the Torrejón Pumped Storage Power Plant in Spain. The modernization upgrades the units for variable-speed operation, improving grid flexibility and plant efficiency.
June 2025 GE Vernova commissioned India's first variable-speed pumped storage unit at THDC India Limited's Tehri Pumped Storage Hydropower Plant. The project includes four 250 MW variable-speed units, expanding the Tehri Hydropower Complex to 2.4 GW and making it India's largest hydropower complex.
June 2025 ANDRITZ received an order from Adani Green Energy Limited (AGEL) to supply the electromechanical equipment for the Tarali Pumped Storage Project in Maharashtra, India. The contract strengthens ANDRITZ's presence in India's growing pumped-storage hydropower sector.