Global hydropower development is entering a new phase, with the latest IEA Renewables 2025 report forecasting both steady growth in conventional capacity and a sharp rise in pumped storage installations as systems adapt to record levels of variable renewable generation.

Between 2025 and 2030, hydropower electricity generation is expected to increase by about 7%, largely from new projects in emerging and developing economies. However, hydropower’s share of global electricity generation will edge down to 14% by 2030, and its share of renewable electricity will fall to 30%, continuing a long-term decline from over 80% two decades ago

Despite this relative decline, total hydropower capacity growth is projected to exceed 154 GW over 2025–2030 – slightly higher than in the previous five years.

The International Energy Agency highlights that hydropower remains critical for providing flexibility, with pumped storage hydropower (PSH) leading this new phase of expansion.

The report notes that annual PSH capacity additions are set to double, reaching 16.5 GW per year by 2030, while total new PSH installations could surpass 36 GW, marking a 40% increase over last year’s forecast. PSH capacity additions outpaced conventional hydropower for the first time in 2023 and 2024, a trend driven by the need to balance growing solar and wind output.

China will account for more than 60% of global PSH growth, supported by the rapid expansion of variable renewables and the build-out of grid infrastructure. In Europe, deployment is accelerating in Spain and Austria, while new PSH projects are also planned across India, the ASEAN region and Africa, where hydropower remains central to system development.

Large conventional projects continue to advance in developing regions. In sub-Saharan Africa, major schemes such as Ethiopia’s Grand Ethiopian Renaissance Dam, Tanzania’s Julius Nyerere Hydropower Station, and Angola’s Caculo-Cabaça project are boosting national capacity and enabling power exports. In Latin America, hydropower remains the dominant renewable source despite rising solar PV deployment, with Colombia’s 2.4GW Ituango project among the key developments.

The IEA concludes that hydropower – particularly pumped storage – will play a growing role in maintaining system stability as variable renewables rise to nearly two-thirds of renewable electricity generation by 2030.

Beyond hydropower, the report shows that solar PV will account for around 80% of new renewable capacity by 2030, driven by low costs and faster permitting. Wind power will also expand substantially despite supply chain challenges, with onshore installations rising 45% over the next five years. Bioenergy and geothermal continue to provide dispatchable capacity, with geothermal additions expected to triple by 2030, led by projects in the United States, Indonesia, Japan, Türkiye, Kenya and the Philippines. Together with hydropower, these technologies will underpin system flexibility as renewables’ share of global electricity generation climbs from 32% today to 43% by 2030