Pumped storage hydropower passed a major milestone in 2025, with global installed capacity surpassing 200GW for the first time after a record year for new projects.
The 2026 World Hydropower Outlook, published by the International Hydropower Association (IHA), shows that 28GW of hydropower capacity was commissioned worldwide during the year, including a record 11.6GW of pumped storage. Total installed hydropower capacity reached 1,469GW by the end of 2025, cementing its position as the world’s largest source of renewable electricity.
The report argues that hydropower is moving to the centre of energy strategies worldwide as governments seek greater energy independence, grid stability and long-duration energy storage to complement growing shares of wind and solar generation.
Pumped storage capacity now stands at 201GW globally, with a further 243GW under construction and a development pipeline of 621GW. Overall, the global hydropower pipeline has reached 1,127GW.
Malcolm Turnbull, International Hydropower Association President, said countries are increasingly recognising the value of flexible, domestic electricity generation.
“As electricity systems become more dependent on variable renewables, and geopolitical tensions make reliance on imports more challenging, countries are increasingly recognising the importance of flexibility, long-duration storage and resilient domestic generation,” he said. “Hydropower and pumped storage are uniquely positioned to provide these services at scale.”
Regional growth gathers pace
China remained the dominant force in hydropower development during 2025, accounting for more than 40% of global capacity additions. The country has more than 300GW of hydropower under construction, including 218GW of pumped storage.
Construction also began on the Yarlung Zangbo River Hydropower Project, which is expected to become the world’s largest hydropower facility and generate around three times as much electricity as the Three Gorges Dam.
Elsewhere in Asia, hydropower development is accelerating. South and Central Asia now have a combined pipeline exceeding 300 GW, while India is planning a major expansion of pumped storage capacity, aiming to increase installed capacity from around 3.5-5 GW today to as much as 100 GW by 2035.
In Europe, record levels of renewable curtailment and periods of negative electricity pricing are driving interest in pumped storage and other long-duration energy storage technologies. Countries including the Netherlands, Germany, Spain, Belgium, Sweden and France recorded more than 500 hours of negative electricity prices during 2025, according to the report.
Africa remained one of the strongest regions for new conventional hydropower development, commissioning more than 4 GW of capacity for a second consecutive year. Major projects including Ethiopia’s Grand Ethiopian Renaissance Dam and Tanzania’s Julius Nyerere Hydropower Project expanded generation capacity and strengthened regional power systems.
Conventional hydropower is also regaining momentum in South America, supported by a development pipeline of around 70 GW. The report notes that more than half of the region’s hydropower fleet is now over 30 years old, making modernisation and digitalisation increasingly important.
North and Central America saw continued investment, with Canada completing commissioning of the 1.1GW Site C (John Horgan) project in British Columbia and the US advancing permitting reforms and new infrastructure programmes. More than 60 GW of pumped storage projects are now in development across the US.
The report also identifies rapidly rising electricity demand from data centres and digital infrastructure as a growing driver for hydropower investment. Technology companies including Google and Microsoft signed long-term hydropower supply agreements in North America during 2025 as they sought carbon-free electricity for expanding artificial intelligence and data centre operations.
Despite the growth, the Outlook warns that financing constraints, permitting delays, transmission bottlenecks, climate-related hydrological variability and regulatory uncertainty continue to slow deployment in many markets.
Eddie Rich, CEO at the International Hydropower Association, said the sector could expand much further if governments adopt supportive policies.
“This year’s Outlook tells a clear story. Pumped storage will double globally in next 15 years. But we can and must go further. If the right policy changes are made, it should triple and if governments treat water batteries and chemical batteries equally, the industry will quadruple capacity by 2040.”
Rory Connor, Partner – Co-Head of Power and Renewables at Addleshaw Goddard, said: “Hydropower is central to global energy security, stability and the energy transition. IHA’s World Hydropower Outlook is always a seminal report valued by the hydropower and wider energy industry year after year. We are delighted to help IHA launch the World Hydropower Outlook 2026.”
International Water Power & Dam Construction will examine the findings of the 2026 World Hydropower Outlook in more detail in forthcoming coverage.
