Asia-Pacific ramping up hydropower, pumped storage capacities amid challenges: report - S&P Global
Published March 10, 2026
Asia-Pacific Increasing Hydropower and Pumped Storage Capacities Despite Challenges
The Asia-Pacific region is witnessing a significant expansion in its hydropower and pumped storage capacities, as highlighted in a recent report by S&P Global. This growth is driven by the need for renewable energy solutions amid rising energy demands and the ongoing transition towards sustainable energy sources. However, the region is also facing various challenges that could impact the pace and scale of this development.
According to the report, hydropower generation in the Asia-Pacific is projected to reach approximately 1,800 gigawatts (GW) by 2025, marking an increase from about 1,600 GW in 2020. This growth reflects a compound annual growth rate (CAGR) of approximately 2.5% over the five-year period. The report emphasizes that hydropower will continue to play a crucial role in the energy mix of several countries in the region, particularly in nations such as China, India, and Indonesia.
China remains the largest contributor to hydropower capacity in the Asia-Pacific, accounting for nearly 50% of the total installed capacity in the region. The country has been investing heavily in hydropower projects, with plans to add over 100 GW of new capacity by 2025. These developments are part of China's broader strategy to achieve carbon neutrality by 2060 and to enhance energy security through renewable sources.
India is also making strides in hydropower development, with an estimated capacity increase from around 50 GW in 2020 to approximately 70 GW by 2025. The Indian government has set ambitious targets for renewable energy, aiming for 500 GW of non-fossil fuel-based power generation capacity by 2030. Hydropower is expected to be a significant contributor to achieving this goal, alongside solar and wind energy.
Indonesia is another key player in the hydropower landscape, with plans to increase its capacity from about 5 GW in 2020 to over 10 GW by 2025. The Indonesian government is focusing on developing its vast hydropower potential, particularly in remote areas where access to electricity is limited. The expansion of hydropower projects is seen as a means to support economic growth and improve energy access for rural communities.
Despite the positive outlook for hydropower in the Asia-Pacific, the report outlines several challenges that could hinder progress. One major concern is the environmental impact of large-scale hydropower projects, which can disrupt local ecosystems and displace communities. There is also growing opposition from environmental groups and local populations who advocate for more sustainable and less intrusive energy solutions.
Moreover, the financing of new hydropower projects presents another challenge. Many countries in the Asia-Pacific are grappling with high levels of debt, making it difficult to secure funding for large infrastructure projects. This financial strain is compounded by the need for significant investment in renewable energy technologies to meet climate goals.
The report also highlights the increasing importance of pumped storage hydropower (PSH) in the region. Pumped storage facilities allow for the storage of energy generated during periods of low demand, which can then be released during peak demand times. This technology is particularly valuable as more intermittent renewable energy sources, such as solar and wind, are integrated into the grid.
By 2025, the Asia-Pacific is expected to have over 30 GW of new pumped storage capacity, with China leading the way. The country has ambitious plans to expand its pumped storage capabilities, aiming to add approximately 20 GW of new capacity by 2025. This expansion is crucial for balancing the grid and ensuring a stable supply of electricity as the share of renewable energy increases.
India is also investing in pumped storage, with several projects underway to enhance grid stability and support the integration of renewable energy sources. The Indian government recognizes the importance of pumped storage in achieving its renewable energy targets and is working to streamline the regulatory process to facilitate project development.
As the Asia-Pacific region continues to ramp up its hydropower and pumped storage capacities, collaboration among governments, private investors, and local communities will be essential. Engaging stakeholders early in the planning process can help address concerns related to environmental impact and social displacement, ultimately leading to more sustainable project outcomes.
In conclusion, the Asia-Pacific region is poised for significant growth in hydropower and pumped storage capacities over the next few years. While challenges remain, the commitment to renewable energy development and the integration of innovative technologies will play a vital role in shaping the future of the energy landscape in this dynamic region.