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Motion Estimation (ME) is the most computationally intensive and most power consuming part of video compression and video enhancement systems. In this paper, we propose a novel dynamic power estimation technique for ME hardware. We estimated the power consumption of a full search ME hardware implementation on a Xilinx Virtex II FPGA using several existing high and low level dynamic power estimation techniques and our technique. Gate-level timing simulation based power estimation of full search ME hardware for an average frame using Xilinx XPower tool takes 6 - 18 hours in a state-of-the-art PC, whereas estimating the power consumption of the same ME hardware for the same frame takes a few seconds using our technique. The average and maximum difference between the power consumptions estimated by our technique and the power consumptions estimated by XPower tool for four different video sequences are 3% and 13% respectively.