Pumped Hydro Storage Market Size and Forecast- 2025 to 2032
Pumped Hydro Storage Market is estimated to be valued at USD 397.97 Bn in 2025 and is expected to reach USD 634.88 Bn in 2032, exhibiting a compound annual growth rate (CAGR) of 6.9% from 2025 to 2032.
Key Takeaways
Market Overview
The global pumped hydro storage market is growing at a rapid pace fuelled by the increasing demand for energy storage technologies. Pumped hydro storage, which harnesses water reservoirs to store energy in the form of water being pumped to a higher altitude and released to produce electricity, is gaining popularity because it is efficient, can be used at a large scale, and can be used to ensure grid stability.
In 2024, a significant break came when the U.S. Department of Energy made a $15 billion funding program announcement for the development of pumped hydro storage facilities nationwide to aid in the transition towards cleaner sources of energy.
Current Events and Its Impact
Current Events |
Description and its impact |
Rise in Global Investments for Pumped Hydro Storage |
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Technological Improvements in Pumped Hydro Efficiency |
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Pricing Analysis for Pumped Hydro Storage Market
The pricing framework for the Pumped Hydro Storage (PHS) market is determined by several factors, such as capital expenditure (CAPEX), operational expenses, technology evolution, and government measures. PHS schemes tend to involve high initial investments owing to the development of reservoirs, turbines, and peripheral infrastructure, with initial CAPEX from USD 1,000 to 3,000 per kW. The investments vary with the site location, terrain, and size of the project.
Although the upfront cost is high, PPH is competitive when it comes to the levelized cost of storage (LCOS) with other storage options such as batteries. In the long run, the maintenance and operating expenses are quite low, so PPH is more cost-effective for long-term storage (10-40 years). Storing large quantities of energy and releasing it during peak hours contributes to its cost-effectiveness.
Technological innovations, including enhanced pump-turbine efficiency and automation systems, are reducing the cost of operation, further enhancing the viability of PHS. Further, subsidies and incentives by governments in most countries, particularly China, the U.S., and Europe, are fuelling the growth of the PHS market and also working towards reducing project costs.
Role of Ai in Pumped Hydro Storage Market
AI is critical in improving the efficiency, reliability, and performance of pumped hydro storage (PHS) systems. Through the utilization of machine learning algorithms, AI is capable of enhancing energy storage and release cycles to ensure that during periods of low demand, energy is stored, and when there is high demand, the energy is released, thereby better balancing the grid. Artificial intelligence devices dig into real-time data to forecast power demand, climate conditions, and hydrological components, enabling operators to more effectively determine when to pump and produce electricity.
AI also helps in the maintenance and surveillance of PHS facilities by applying predictive analytics to identify early indicators of equipment wear and failure. This minimizes downtime and maximizes the overall lifespan of infrastructure. AI-based optimization also assists in enhancing the efficiency of pump-turbine units by optimizing operations in accordance with real-time conditions, maximizing overall performance as well as energy conversion rates.
In grid-scale applications, AI algorithms also facilitate the integration of renewable energy sources such as wind and solar with PHS systems by forecasting renewable energy generation fluctuations, thus making the energy storage system more dynamic and responsive. This blend of real-time data analysis, predictive maintenance, and optimization makes AI a key driver towards the future of pumped hydro storage, and it assists in the transition to cleaner and more reliable energy systems.
Global Pumped Hydro Storage Market- Drivers
Global Pumped Hydro Storage Market- Opportunities
Development of new PSH technologies: The growing development of new PSH technologies is expected to give a great opportunity for growth in the market during the forecast period. For example, the construction of seawater-based PSH projects is one of the great development opportunities for the PSH market. Seawater-based PSH systems utilize ocean saltwater for pumped energy storage plants, where the ocean acts as the lower reservoir, reducing the consumption of freshwater.
Global Pumped Hydro Storage Market- Trends
The growing availability of more renewable sources throughout developing regions is becoming a top trend in the market. As of 2024, the capacity of Africa's hydropower keeps increasing and accounts for a substantial portion of the country's renewable energy. In 2023 alone, the continent increased its hydropower capacity by 2 GW, bringing the overall capacity to 42 GW, representing 40% of the electricity produced in sub-Saharan Africa. The expansion was mostly fueled by developments in the case of countries like Nigeria, Uganda, Democratic Republic of the Congo, and Tanzania.
Pumped Hydro Storage Market Insights, By type
Based on type, open-loop is expected to dominate the global market over the forecast period, and this is attributed to the high adoption of open-loop pump projects across developed countries. According to the International Hydropower Association, by the end of 2020, Europe had a significant number of open-loop pumped hydro storage projects, and India had a total of eight operational open-loop pumped hydro storage projects with a total power generation capacity of more than 2.5 GW. The closed-loop segment is also expected to witness significant growth in the near future, owing to its high reliability, flexibility, and power output.
Regional Insights
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Global Pumped Hydro Storage Market- Regional Insights
Asia Pacific is projected to hold a leading position in the global pump hydro storage market over the forecast period owing to the increasing installment of pumped hydro storage capacity in the region. According to the Coherent Market Insights analysis, as of 2025, North America has 23.03 GW of pumped hydro storage capacity, most of which is concentrated in the U.S. This is primarily attributed to the nation’s large hydropower capacity, around 102 GW as of 2022. Though Canada also sits on a massive 82 GW of hydropower capacity, the country has yet to fully utilize its pumped hydro storage capacity since it only has 117 MW of the discussed technology.
Global Pumped Hydro Storage Market Dominating Countries
China Pumped Hydro Storage Market Analysis and Trend
China is the world leader in pumped hydro storage in terms of installed capacity. The Fengning Pumped Storage Power Station, the world's largest, has a 3,600 MW capacity and is at the center of China's plans for stabilizing its grid and incorporating renewable energy technologies such as wind and solar. With its aggressive expansion plans, the country is a force to be reckoned with, and it is likely to lead the growth of PHS in the future as well.
United States Pumped Hydro Storage Market
The United States is present strongly in the pumped hydro storage industry, boasting a number of large-scale operations within its territory. In 2024, the United States expanded storage capacity by investing in both new and existing developments. The Bath County Pumped Storage Station in Virginia continues to be the largest North American PHS plant. The government of the United States is also encouraging the advancement of energy storage technologies, making the nation a primary market for PHS.
Market Report Scope
Pumped Hydro Storage Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2024 | Market Size in 2025: | USD 397.97 Bn |
Historical Data for: | 2020 To 2024 | Forecast Period: | 2025 To 2032 |
Forecast Period 2025 to 2032 CAGR: | 6.9% | 2032 Value Projection: | USD 634.88 Bn |
Geographies covered: |
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Segments covered: |
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Companies covered: |
Operators (Duke Energy Corporation, EON SE, Enel SPA, and Electricite de France SA, and Iberdrola SA) Technology Providers (General Electric Company, Siemens AG, Andritz AG, Mitsubishi Heavy Industries, Ltd, Voith GmbH & Co. KGaA, and Ansaldo Energia SpA) |
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Growth Drivers: |
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Restraints & Challenges: |
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Global Pumped Hydro Storage Market- Key Developments
Global Pumped Hydro Storage Market- Key Players
Major players operating in the global pumped hydro storage market are Operators (Duke Energy Corporation, EON SE, Enel SPA, and Electricite de France SA, and Iberdrola SA) Technology Providers (General Electric Company, Siemens AG, Andritz AG, Mitsubishi Heavy Industries, Ltd, Voith GmbH & Co. KGaA, and Ansaldo Energia SpA)
Analyst View
Market Segmentation
Sources
Primary Research Interviews:
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Proprietary Elements:
Definition: Pumped hydro storage uses water to store energy. A pumped hydro system's effective energy storage capacity is measured in GWh, or gigawatt hours. The volume of water required for a single GWh of energy storage is about a gigalitre. An off-river pumped hydro system can store as much as 20 GWh of energy.
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About Author
Sakshi Suryawanshi is a Research Consultant with 6 years of extensive experience in market research and consulting. She is proficient in market estimation, competitive analysis, and patent analysis. Sakshi excels in identifying market trends and evaluating competitive landscapes to provide actionable insights that drive strategic decision-making. Her expertise helps businesses navigate complex market dynamics and achieve their objectives effectively.
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