Pumped Storage Projects are large-scale energy storage systems that use the gravitational potential of water to store and generate electricity. They operate by pumping water from a lower reservoir to an upper reservoir during periods of low electricity demand or surplus renewable generation, and releasing it back through turbines to produce power during peak demand. PSPs provide highly reliable, flexible and fast-responding balancing support to the grid, making them essential for integrating variable renewable energy sources such as solar and wind. With long life cycles, proven technology, and the ability to deliver gigawatt-scale, long-duration storage, PSPs play a critical role in ensuring grid stability, energy security, and efficient utilisation of existing power infrastructure.
PSPs are essential for ensuring the smooth integration of the rapidly growing share of renewable energy sources – particularly variable and intermittent solar and wind—into the grid, alongside emerging technologies such as Electric Vehicles (EVs), thereby enabling a quality, reliable and secure power supply. Globally, PSPs account for over 95% of installed energy storage capacity, storing nearly 9,000 GWh of electricity, underscoring their proven effectiveness as large-scale storage solutions. They are capable of providing gigawatt-scale storage with long duration discharge of up to about eight hours a day, and offer operational flexibility through frequent start–stop operations and fast ramping capabilities.
With a long life cycle of around 100 years (with periodic R&M of electro-mechanical systems), PSPs remain a durable and sustainable asset. PSPs play a vital role in meeting peak demand, providing balancing and firm dispatchable power, and maximising utilisation of existing transmission and distribution infrastructure by deferring the need for additional investments.
Advantages of Pumped Storage Projects
(a) Ecologically friendly: PSPs would have minimal impact on the environment in their vicinity as they are mainly being developed as off-the-river projects. All components of PSPs would be connected, operated, and maintained in an environmentally friendly manner. There are no residual environmental impacts in the case of PSPs.
(b) Tested Technology: The PSPs operate on time-tested technology thereby infusing confidence in the lending institutions for a longer duration of loans. Additionally, the cost of technologies involved in the construction has reduced rendering PSPs a viable proposition. The technological surety associated with PSPs has opened the possibility for the developers to claim a higher debt-equity ratio in the projects.
(c) Local development: The development of PSPs is highly capital intensive and involves the development of local transport infrastructure for the mobilization of men and materials. Local industries such as cement and steel also get impetus and drive job creation in the economy. This in turn will have a salutary effect on local area development. PSPs are an ideal investment for socio-economic and regional development considerations like infrastructure up-gradation and employment generation.
(d) Longer and reliable duration of storage: PSPs are generally designed for a longer duration of discharge of more than 6 hours to meet the peak demand or for compensating the variability in the grid due to VRES. Currently, Battery Energy Storage Systems are designed for up to 4 hours of discharge. The firm capacity of PSPs during peak hours is guaranteed.
(e) Inertia: For stability of the grid, resilience of grid is of paramount importance and the same is dependent on Inertia. Inertia can be provided by a rotating mass. As thermal units will get retired on one side and VREs get increasingly added in the grid and combined with slow pace of addition of Hydro Storage Projects, PSPs stand out as a ray of hope. Artificial inertia (synthetic/virtual inertia) by fast acting electronics has its limitations.
(f) Last but not the least, PSPs improve CUF of solar projects by utilising the excess solar energy in the grid when grid does not require it. Without PSPs, solar projects will increasingly see backdown in generation.
Types of PSPs:
Pumped Storage Schemes may be classified into following three types:
(a) On-stream pumped storage scheme– Both reservoirs are located on any river/ stream.
(b) Off-stream open loop pumped storage scheme– One reservoir is located on river/ stream. The other reservoir (off-stream reservoir) is not located on any river/ perennial stream. If off-stream reservoir is located on any non-perennial stream, then
(c) Off-stream closed loop pumped storage scheme– None of the reservoirs is located on any river/ perennial stream. If any reservoir is located on a non-perennial stream, then
Efforts are being made to identify off-stream PSPs located away from rivers, for faster execution and minimal environmental impact. Off-stream PSPs offer several significant advantages, as they are located away from natural water bodies and river systems, thereby minimizing impacts on aquatic ecology and surrounding environment. With typically lower land-use conflicts, off-stream PSPs facilitate smoother project development and community acceptance. Additionally, their siting away from active river course leads to reduced issues of erosion and sedimentation, contributing to better long-term sustainability and operational reliability.
Global Pumped Storage Hydropower: Status and Outlook (2025)
PSP remains the world’s dominant grid‑scale storage technology, with global installed capacity reaching ~189 GW in 2024, according to the International Hydropower Association’s 2025 World Hydropower Outlook. In 2024 alone, about 8.4 GW of new PSP capacity was added globally. The global PSP development pipeline now exceeds 600 GW, with more than 105 GW under construction, of which over 90 GW is in China. IHA estimates that existing PSP plants can store up to ~9,000 GWh of electricity, providing critical inertia, frequency regulation, and long‑duration storage for high‑renewables grids. With China targeting 120–130 GW of PSP by 2030 and system operators projecting 129 GW in their regions, IHA expects around 70 GW of China’s under‑construction capacity to be commissioned by 2030. Globally, an estimated ~90 GW of new PSP could be added by 2030, raising total capacity to about 280 GW, a nearly 50% increase from today’s base. This implies an average build rate of ~18 GW/year, roughly 5–10 times the 2–4 GW/year added annually over the past two decades.
Global PSP Capacity and Pipeline (2025)
Country-wise PSP Overview (Operational + Pipeline)
China: The Global Leader
China dominates global pumped storage power (PSP) with ~53 GW of operational capacity and over 90 GW under construction as of 2025, making it by far the largest PSP market in the world. The National Energy Administration has set a national target of 120 GW of PSP by 2030, and system operators China State Grid and Southern State Grid project a combined 129 GW in their regions by that date. The International Hydropower Association (IHA) estimates that around 70 GW of China’s under‑construction capacity could be commissioned by 2030, contributing significantly to the global PSP build‑out. China has recently (December 2025) commissioned a 425 MW capacity PSP unit in Tiantai PSP, Zhejiang East China.
United States: Storage for a Clean Grid
The US has 22.2 GW of operational PSP capacity and about 102 GW of total hydropower as of 2024. For the first time, battery storage (27 GW) has surpassed PSP as the largest source of utility‑scale energy storage capacity, but PSP remains essential for long‑duration storage (8–12 hours), grid stability, and renewable integration, especially in regions with high wind and solar penetration.
Japan: Stability and Innovation
Japan has ~21.8 GW of PSP across more than 40 plants, making it the third‑largest PSP country globally. It has a long history of PSP and is a leader in innovative technologies, including seawater PSP (Okinawa Yanbaru) and large‑scale reversible plants like Kannagawa, which is partially operational and will reach 2.82 GW when complete.
Europe: Flexibility for the Energy Transition
Europe’s PSP capacity is 56 GW, with 201 MW added in 2024, and the development pipeline now stands at 52.9 GW, supported by EU‑level reforms and national mechanisms designed to ensure long‑term grid flexibility. The EU’s 2024 electricity market reform and national mechanisms (e.g., capacity markets in Italy and Spain, Cap & Floor in the UK) are driving renewed interest in PSP as the most proven large‑scale electricity storage technology. Regional pipelines:
• UK: Over 13 GW of PSP projects announced and in development.
• Austria: Around 1.3 GW under construction, with 2.8 GW in early development.
• Italy: Pipeline nearing 4 GW.
• Greece: Over 3 GW of PSP in development.
This is an extract from a recent report “Roadmap to 100 GW of Hydro Pumped Storage Projects (PSPs) by 2035-36” published by Central Electricity Authority of India. Access the report here