Running Smoothly: Hydroelectric Power in the US Industry Market Research Report from IBISWorld has Been Updated

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Although hydroelectricity is a renewable energy source and perceived as environmentally friendly, establishing new hydroelectric facilities has been difficult for industry players because of stringent state and federal regulations and a lack of suitable locations; furthermore, the recession caused financing for large projects to dry up, making it hard for industry firms to break ground. 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 less water flowing into the Hydroelectric Power industry during the past five years, limiting its ability to create electricity. "Many firms in the industry are government agencies that also oversee water-management operations," IBISWorld industry analyst Deonta Smith says. 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. As a result, industry revenue is expected to fall at an annualized rate of 1.3% to $6.3 billion in the five years to 2013.

"Although hydroelectricity is a renewable energy source and is perceived as environmentally friendly, state governments have scrutinized it considerably due to the potential damage it could cause to river resources," Smith says. Establishing new hydroelectric facilities has been difficult for players in the Hydroelectric Power industry because of stringent state and federal regulations along with a lack of suitable locations where there is enough water and 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 hard for industry firms to find money to break ground. Nonetheless, industry players have remained busy, and plans for upgrades are already in the works, with industry players upgrading facilities during 2013 as demand for electricity climbs. These upgrades are expected to boost industry revenue 0.6% in 2013.

The US Hydroelectric Power industry has a moderate level of concentration. The four largest industry participants include US Army Corps of Engineers, Bureau of Reclamation, New York Power Authority and Pacific Gas and Electric Company. Moderate industry concentration reflects the historical development of the industry in which the federal government and, to a lesser extent, state governments built and operated major hydroelectric facilities. These entities continue to be major players in this industry.

Sustained economic growth during the next five years will contribute to more robust demand for electricity generation and transmission, and investments will be used to increase the efficiency of existing facilities. 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. Other types of renewable energy generators that operate in this industry will benefit as well, due to favorable government regulations promoting clean energy. As a result of these positive trends, industry revenue is forecast to increase in the five years to 2018. 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.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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 or call 1-800-330-3772.

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Gavin Smith
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