South America |


South America’s hydropower enters transition


Hydropower remains central to electricity systems across Brazil, Chile, Argentina and Peru, but


its role is evolving as renewable diversification accelerates, environmental licensing tightens and investment priorities shift. Market outlook reports for the four countries to 2035 from GlobalData indicate that while hydro continues to underpin grid stability and seasonal balancing, new


project development is becoming more selective, with smaller schemes, pumped storage and flexibility services gaining prominence alongside established large dam fleets


Above: Chaglla hydropower plant (456MW) on the Huallaga River is one of Peru’s largest recent hydro developments, contributing significantly to the country’s hydropower- dominated generation mix. Image courtesy of Dextra Group.


HYDROPOWER REMAINS A defining feature of South America’s power systems, but across Brazil, Chile, Argentina and Peru the market outlook to 2035 points to a more selective development cycle. Four country reports from IWP&DC parent company GlobalData show hydro still carrying major weight in generation, system balancing and long-term capacity planning, yet its relative position is being reshaped by faster growth in solar and wind, tighter permitting regimes, transmission constraints, storage deployment and changing auction structures. Brazil remains the region’s largest hydro market by far. In 2024, large conventional hydropower accounted for 41.7% of installed capacity, while annual generation from large hydro and pumped storage kept hydro as the dominant source in the generation mix with 52.4%. Total installed capacity rose from 180GW in 2020 to 246.9GW in 2024, and the report forecasts total system capacity growth at a 4.9% CAGR through 2035, alongside annual generation rising to 1,031.9TWh. Even so, hydro’s relative weight will decline. The Brazil report projects large hydropower’s installed-capacity share falling from 41.8% in 2024 to 24.8% in 2035, while renewable capacity overall rises from 45% to 64.3%. That shift reflects the changing function of hydro in the Brazilian system. The report states that large hydropower capacity remained broadly flat at around 103GW during 2020-2024 and is expected to reach only 103.1GW by 2035, while pumped storage stays at 0.2GW through the forecast period. Hydro generation rises only marginally, from 397.8TWh in 2024 to


22 | April 2026 | www.waterpowermagazine.com


403.6TWh in 2035. In other words, the country is not building out another major wave of conventional hydro at the same pace as in previous decades; rather, hydro is expected to remain a huge inherited asset base while new growth comes much more rapidly from wind, solar PV and other renewables. Brazil’s active hydro fleet underlines the scale of that installed base. The report lists Itaipu-Brazil at 7,000MW, Tucurui at 4,245MW and 4,125MW, Belo Monte in multiple stages at 3,667MW, 3,056MW, 2,444MW and 1,833MW, Santo Antonio at 3,568MW, Xingo at 3,162MW, Jirau at 3,150MW, Paulo Afonso IV at 2,462MW, Itumbiara at 2,082MW, Sao Simao at 1,710MW and Foz do Areia at 1,676MW. The upcoming hydro list is much thinner by comparison, led by Jatoba at 1,649MW, Jamanxim at 881MW, Cachoeira do Cai at 802MW, Itapiranga at 725MW, Bem Querer at 650MW and Cachoeira dos Patos at 528MW, with smaller projects such as Itaocara at 200MW and Ribeiro Goncalves at 174MW also included. The project-status data reinforces that selective


expansion profile. Between 2025 and 2035, Brazil has 385MW of hydropower under construction, 939MW at permitting stage and 1,800MW announced. The report also notes that the principal challenge for the power sector remains overdependence on hydropower, particularly in drought years when reservoir depletion raises the need for higher-cost thermal generation. On the policy side, the country’s auction structure continues to shape new-build economics, and the report highlights that small hydro remains supported within the broader renewable


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