Hydroelectric Power in the US Industry Market Research Report from IBISWorld Has Been Updated

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Severe droughts led to a decrease of water inflow to the Hydroelectric Power industry over the past five years, limiting its ability to generate electricity, however, in the five years to 2018, sustained economic growth will contribute to more robust demand for electricity generation and transmission, while investments will be used to increase the efficiency of existing facilities. For these reasons, industry research firm IBISWorld has updated a report on the Hydroelectric Power industry in its growing industry report collection.

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Stringent government regulations and a lack of suitable locations have hindered growth.

Severe droughts led to a decrease of water inflow to the Hydroelectric Power industry over the past five years, limiting its ability to generate electricity. These firms focused their attention on mitigating the effects of droughts by scaling back hydroelectricity operations. In turn, investment in hydroelectric infrastructure slowed and plans for upgrades to increase efficiency and output were delayed, as combating the droughts took center stage. Although other renewable power sources, such as biomass generation, experienced steady expansion, it was insufficient for sustaining industry growth. As a result, IBISWorld expects revenue for the Hydroelectric Power industry to fall at an annualized rate of 0.1% to $3.7 billion in the five years to 2013.

According to IBISWorld Industry Analyst David Yang, “Although hydroelectricity is a renewable energy source and is perceived as environmentally friendly, state governments have scrutinized it considerably due to the potential damages hydroelectric dams can cause to river resources.” Establishing new hydroelectric facilities has been difficult for industry players, due to stringent state and federal regulations and a lack of suitable locations where there is ample water near a steep-enough incline to produce electricity. Furthermore, the recession caused financing for large capital-intensive projects to dry up and, in turn, made it difficult for industry firms to find money to break ground. As a result, industry revenue is expected to fall another 3.2% in 2013. Profit margins have similarly declined over the past five years.

“Sustained economic growth in the next five years will contribute to more robust demand for electricity generation and transmission, while investments will be used to increase the efficiency of existing facilities,” says Yang. Additionally, in response to increased government environmental regulation and a lack of suitable locations for large projects, industry players will look to establish smaller hydroelectric facilities to expand their presence in the hydroelectric space. Geothermal and biomass generators that operate in this industry will benefit as well, due to favorable government regulations promoting clean energy.

The Hydroelectric Power industry is characterized by a low level of concentration, because most private electric utilities and independent power generators operate in regional markets. Over the past five years, market share concentration has remained relatively stable. Hydroelectric power infrastructure construction activity has been low, especially after North American natural gas prices plunged in 2008. Gas generation became cheaper, which provided competition for industry operators.

For more information, visit IBISWorld’s Hydroelectric Power in the US industry report page.

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IBISWorld industry Report Key Topics

Firms in this industry operate facilities that use water to generate hydroelectric and renewable electricity (other than wind power and solar power). Industry players also use renewable energy sources including wood, municipal waste, landfill gas, biomass and geothermal energy to generate electricity. Data is sourced from the Energy Information Administration and the US Census Bureau and does not include government-owned facilities.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
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Products & Services
Major Markets
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Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
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Key Statistics
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Annual Change
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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