Run of river (ROR) power market size is expected to gain notable proceeds from 2021 to 2027 with the higher demand for hydropower to meet renewable, indigenous, reliable, and climate-friendly requirements on account of the growing emphasis on the reduction of carbon footprints. According to Axpo, hydropower accounts for close to 60% of the energy production in Switzerland. This increasing penetration of hydropower will boost the market demand as nearly half of the hydroelectric power comes from the run-of-river power stations.
Run of river power systems are renewable, small, and fit as suitable low-impact alternatives to the existing large-scale plants. They are mainly built on rivers and generate hydropower by making use of kinetic energy created from natural flow of the river. On account of the rush of several hundred tons of water per second, these power stations can bear large capacities of various megawatts.
The increasing adoption of ROR systems by numerous provincial utilities to replace inefficient and polluting diesel-electric generators, and to offer clean power to isolated and small communities, will further contribute to shaping the industry growth curve.
However, the intermittent approach of power generation along with the higher operation and maintenance costs may hamper the market expansion size to some extent.
In terms of regional segmentation, the North America run of river power market will garner substantial traction with high hydropower production and increasing focus towards replacing polluting diesel generators. The increased reliability on hydropower and the advent of various renewable energy technologies have made way for the surge in run of river power projects in the region.
Asia Pacific is set to emerge as a profitable revenue pocket for the run of river power market given the world-leading production of hydropower in the continent. As per statistics by Our World in Data, China ranked first in global hydropower generation, producing beyond 1,200 TW in annual valuation in 2020. The significant jump in the number of renewable projects through hydropower across India, Australia, Thailand, Japan, Indonesia, and the Philippines will also enhance the regional growth outlook.
Innergex Renewable Energy, Duke Energy, China Yangtze Power (China Three Gorges), and Ontario Power Generation are some major players in ROR market.
These firms are consistently focused on inorganic and partnership-oriented strategies, including mergers and partnerships, and initiatives like facility upgradations and capacity expansions to enhance their offerings while increasing sales.
For instance, HydroLand, in February 2021, bought a 25-MW portfolio of hydroelectric plants, constituting 13 ROR facilities throughout the Mid-Atlantic, as well as South and Western U.S. for expanding its hydropower capacities with modern equipment and operating systems.
In another instance, Statkraft, in November 2020, struck a deal to acquire Solarcentury, the largest solar PV firm based in the U.K. to widen its portfolio to sustain increasing competition while catering to the higher demands for research and distribution investments in the new solar market.
The ongoing COVID-19 pandemic triggered a backtracking impact on the global economy and contributed to major social and lifestyle changes considering the regulation of stringent lockdown policies and trade limitations. Its effects were also felt on the hydropower industry as it brought disrupted supply chains and potential delays in a number of projects, which in turn plummeted the run of river power market share.
However, the incessant need for power supply across many countries to deliver essential health and other services in the present day has sustained the demand for the ROR systems. The advent of new approaches to reconsider the critical infrastructure and interconnections between the countries will also act as a booster for the industry forecast in the post-pandemic era.