Pumped Hydro Storage Market To Generate Revenue worth $643.9 Billion by 2030
- Published: February 2024
The global pumped hydro storage market is projected to generate USD 643.9 billion revenue by 2030, advancing at a CAGR of 9.2% during 2024–2030. This can be ascribed to the rising degree of urbanization and industrialization in various countries, which propels the electricity demand; growing adoption of renewable energy sources, and omnipotent need to keep the grid stable.
Globally, PHS is an established, proven, and cost-effective technology for storing electricity at times of high generation and/or low demand, which can then be released into peak demand periods. There is some 140GW of PHS capacity installed globally providing well over 95% of global electricity storage capacity.
Pumped hydro is the most extensively used bulk energy storage solution worldwide. Hydropower has been used for thousands of years, making it one of the most-established and tested technologies. It is based on gravity, a simple and basic law of nature. When there is energy surplus, water is pumped from a lower, often man-made reservoir, uphill to another reservoir. Further, water is then permitted to flow through turbines back downhill when needed, thereby producing energy. Therefore, pumped hydro systems are capable of providing reactive power when there is an imbalance in the grid, thus lowering the risk of blackouts.
In addition to this, it is a nature-based, large-scale energy storage solution due to the increasing demand for grid support services and storage. It provides all services, such as frequency control, synchronous or virtual inertia, reactive power support, and black-start capabilities. It provides support that power plants burning fossil fuels traditionally offered, but with swifter responses and sustainably, without CO2 emissions.
Due to their flexibility, large-scale storage possibilities and grid operations benefits, PHS systems will enable utilities to efficiently balance the grid and to develop their renewable energy portfolios. In fact the installation of intermittent renewable generation has added a new degree of uncertainty to the dispatch of interconnected power system. Pumped storage is therefore set to play a key role in enabling renewables’ grid integration while helping countries meet their ambitious targets of cutting GHG emissions and of building additional clean renewable energy capacity.
Asia-Pacific Revenue Contribution Growing Rapidly
Geographically, the Asia-Pacific region is expected to grow with a CAGR of about 13% during the forecast period. This is mainly due to the rapid economic growth and urbanization in China and India, which are leading to an increase in energy demand. PHS helps meet this growing demand by providing a flexible and scalable solution for grid balancing and peak load management. Moreover, the increasing penetration of renewable energy and government propel the market growth. China is the leading country in PHS development, with over 50 GW of installed capacity as of May 2023. China has been constructing pumped-storage hydroelectric projects to enhance power grid adaptability and accommodate the expanding use of solar and wind energy. The country’s pumped-storage potential is poised for further expansion, with 89 GW of capacity currently in the construction phase. Japan and South Korea also have significant PHS capacities.
North America holds a significant market share in the coming years. This is mainly due to the increasing construction of storage plants and the growing production of electricity from pumped hydro storage systems. According to the 2021 edition of the Hydropower Market Report, PHS accounts for 93% of all utility-scale energy storage in the U.S.. America currently has 43 PSH plants and has the potential to add enough new PSH plants to more than double its current PSH capacity.
The major players operating in the pump hydro storage market include Siemens AG, Enel S.p.A., Duke Energy Corporation, Voith GmbH & Co. KGaA, General Electric Company, Tokyo Electric Power Company Holdings Inc., Black & Veatch Holding Company, ANDRITZ AG, Stantec Inc., and ABSAROKA ENERGY LLC.