Pumped Hydro Storage Market Analysis & Forecast: 2025-2032

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

• Based on Type, Open- Loops segment is expected to dominate the global market over the forecast period with 66% market share.

• Asia Pacific is projected to hold a leading position in the global pump hydro storage market over the forecast period with 44% market share.

 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

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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

• Growing integration of renewable energy sources: Growing integration of renewable energy sources and rising emphasis on maintaining grid stability are key drivers driving growth of the global pump hydro storage market.

• Technology Advancements: Technological advances are increasingly making pumped hydro storage more efficient and economical than ever. A recent example of advances in pumped hydro storage (PHS) technology is the innovation of enhanced pump-turbine technology by GE Renewable Energy. In 2024, GE effectively incorporated innovative, more efficient turbine designs into the Jinzhai Pumped Hydro Storage Plant in China. The technology enhances the conversion efficiency of energy and enhances the flexibility of the plant operation.

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

• Temperature is increasing at twice the rate of increase in global temperature

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.

Segmental Analysis

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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

Global Pumped Hydro Storage Market- Key Developments

• In August 2024, China officially opened the globe's largest pumped storage power plant with a capacity of 3,600 MW. The power plant is in Fengning and is meant to increase the nation's capability for energy supply and demand balance as well as incorporating renewable energy into the grid.
• In 2024, SSE and Gilkes Energy signed a partnership to construct a pumped hydro storage project known as the Fearna Storage Project in Scotland's Highlands. The project will be 1.8 GW capacity, enabling Scotland to transition to renewable energy.

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

• The Pumped Hydro Storage (PHS) industry experiences revolutionary growth with rising global power demand and the compelling need for grid stability with the integration of renewable energy. One key driver is government policy alignment with decarbonization objectives, especially policies such as China's mid-term plan to increase PHS capacity, which reflects strategic investments in energy infrastructure. Technological advancements like geo-mechanical storage systems also speed up market potential by overcoming geographical constraints and minimizing efficiency.
• The capacity for long-duration storage and grid-balancing services makes PHS a key facilitator of the energy transition. North America stands out as the leading region, propelled by capacity additions and policy environments favoring storage technology, whereas Asia-Pacific, powered by China, emphasizes large-scale projects to satisfy increasing energy needs.
• Regional diversification is further emphasized by Europe's emphasis on renewable integration and energy security. The evolution of the market will depend on the bridging of financial hurdles via public-private partnerships and the development of modular technologies to lower deployment bottlenecks.

Market Segmentation

• Global Pumped Hydro Storage Market, By Type
• • Open-Loop
  • Closed-Loop
• Global Pumped Hydro Storage Market, Geography
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Company Profiles
  • Operators
    • Duke Energy Corporation
    • EON SE
    • Enel SPA
    • Electricite de France SA (EDF)
    • Iberdrola SA
  • Technology Providers
    • General Electric Company
    • Siemens AG
    • Andritz AG
    • Mitsubishi Heavy Industries, Ltd
    • Voith GmbH & Co. KGaA
    • Ansaldo Energia SpA

Sources

Primary Research Interviews:

• Quidnet Energy (geo-mechanical pumped-storage technology provider)
• National Energy Administration (NEA) of China (pumped storage policy architects)
• U.S. Department of Energy (energy storage infrastructure planners)
• Electric utilities integrating pumped hydro storage
• Others

Databases:

• Research Nester (hydropower market forecasts)
• Others

Magazines:

• International Energy Agency (IEA) Energy Storage Review
• Renewable Energy World (pumped hydro innovations)
• Hydro Review (hydropower industry trends)
• Others

Journals:

• Energy Policy (grid stability and storage solutions)
• Applied Energy (technological advancements in pumped hydro)
• Journal of Energy Storage (market dynamics analysis)
• Others

Newspapers:

• Globenewswire (U.S. energy storage market updates)
• The Business Research Company News (global market growth trends)
• Global Growth Insights (regional market forecasts)
• Others

Associations:

• National Energy Administration (NEA), China
• International Energy Agency (IEA)
• U.S. Energy Storage Association
• Others

Public Domain Sources:

• International Energy Agency (IEA) electricity demand reports
• U.S. Energy Information Administration (EIA) consumption data
• National Renewable Energy Laboratory (NREL) publications
• Others

Proprietary Elements:

• CMI Data Analytics Tool
• Proprietary CMI Existing Repository of information for last 8 years

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.