The development of energy prices over time has depended on several factors. Difficulties and disruptions in local and global energy markets caused by climate change, pandemics and wars have accelerated the transition to clean energy. The overview of electricity generation in four countries (e.g. Lithuania, Italy, Iceland and Austria) is examined. The energy policy outlined in the REPowerEU program focuses on saving energy, producing clean energy and diversifying the energy supply at EU level and in the member states. However, more electricity production from non-dispatchable renewable energy sources has introduced a phenomenon of negative electricity prices, highlighting importance of energy storage. This paper focuses on the contribution that hydropower can bring to the energy market. Two contributions of hydropower assets are crucial in the European energy market for the regulation of the power grid. The flexibility and storage capabilities of reservoir and pumped storage power plants are unmatched by any other technology. These contributions of the hydropower sector to the energy market and the new challenges in the operation of hydropower plants are discussed involving critical analysis of four countries.