Pumped hydro storage involves using surplus electricity to pump water between reservoirs at different elevations or artificial lakes. The stored water is released through turbines to generate electricity during peak demand periods. Pumped hydro storage has the advantage of providing large-scale, long-duration energy storage and helps accommodate increasing amounts of intermittent renewable energy resources like solar and wind on electric grids. The rising deployment of renewable energy is necessitating large-scale energy storage solutions to manage variability in power supply, thereby driving the growth of the pumped hydro storage market.
Global pumped hydro storage market is estimated to be valued at US$ 401.19 Bn in 2024 and is expected to exhibit a CAGR of 7.6% over the forecast period 2024 to 2031.
Key Takeaways
There is significant potential for development of new Pumped Hydro Storage Market Size projects globally. Major opportunities lie in countries aiming to increase the share of renewables in their energy mix like the US, China, India, and countries in Europe. For instance, the US Department of Energy has identified over $250 billion of potential investments in new pumped storage hydropower capacity.
Key players operating in the pumped hydro storage are AbbVie Inc. (Allergan), Terumo Corporation, GlaxoSmithKline PLC, Novartis AG, Medtronic PLC, Abbott Laboratories, Boston Scientific Corp., W L Gore and Associates Inc., Stryker Corporation, and Becton, Dickinson and Company. These players are focusing on capacity expansion and upgrades to existing hydroelectric pumped storage power plants.
Global expansion of key players in the market is expected through partnerships, acquisitions, and strategic investments. For example, in 2021, Iberdrola partnered with EDF Renewables to develop a 2.3 GW pumped hydro storage project in the US. In 2022, Doosan Heavy Industries completed the acquisition of GE’s hydro business to expand its global footprint.
Market Drivers
Rising share of variable renewable energy in the electricity mix is the key driver as pumped hydro storage effectively balances the intermittency of solar and wind power. The target of achieving 50% electricity from renewables by 2030 set by numerous countries will drive significant investments in large-scale energy storage solutions like pumped hydro.
An aging fleet of conventional hydroelectric power plants provides opportunities for efficiency upgrades and capacity enhancements using pumped storage technology. For example, over 200 hydro upgrades have been identified by the US Department of Energy with potential to double existing storage capacity.
Market Restraints
High upfront capital costs associated with construction of new pumped hydro storage plants act as a major barrier. Developing suitable geographies with differences in elevation further limit potential sites for new projects.
Environmental concerns over destruction of landscapes and impacts on local biodiversity need to be thoroughly addressed during the development approvals process, which can potentially delay projects. Restrictive permitting regulations in some regions pose challenges to the growth of the industry.
Segment Analysis
Energy storage segment dominates the pumped hydro storage market as it accounts for the major share in overall capacity installation across various regions. Rising demand for reliable power supply and need to balance the grid during peak demand hours favors the growth of this segment. Other segments including frequency regulation, transmission network support etc are also expected to grow in coming years, however energy storage will maintain its dominance throughout the forecast period due to ongoing capacity addition of pumped hydro plants for utility scale energy storage applications.
Global Analysis
Regionally, Asia Pacific holds the largest share in global pumped hydro storage market owing to active investments across developing markets of China and India. China dominates the regional as well as global market led by continuous capacity additions each year. Presence of favorable geographical conditions and ongoing reservoir based projects drives the APAC market. Europe is another substantial regional market favored by resurgence of pumped hydro capacity to support renewables-based energy transition. Countries including Germany, France, Norway, Switzerland are at forefront adopting this large scale energy storage technology to balance their power grids.
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