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Is the Green Investing Opportunity in Pumped Hydro Storage being overlooked

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Pumped Hydro Storage Introduction

Pumped Hydro Storage along with Compressed Air Energy Storage (CAES) are the less glamorous cousins of Energy Storage Approaches like Lithium Batteries,Flywheels and Capacitors .The Green Investing Limelight has been firmly taken over by startups like A123 Systems which have failed to perform to their initial hype.Pumped Hydro Storage on the other hand is already extensively used by Power Companies to store low cost electricity during off peak hours and then used during peak times to supply the high demand.There is 90 GW of Global Pumped Hydro Storage already existing in the world and with increasing Solar and Wind Energy  this Capacity is only going to grow.The main use of Pumped Hydro Storage is for Grid Energy Storage rather than Energy Storage for Automobiles and Electronic Products.The Electric Utilities are the main customers of this Technology using Pumped Hydro Storage for

  1. Load Balancing – Storing Power during Low Usage Periods and Generating Power at High Usage Periods
  2. Accommodation of Intermittent Sources of  Energy – Solar Energy and Wind Energy are  growing at a scorchingly fast rate of 50% and 30% CAGR over the last several years.Larger share of these forms of renewable energyin the Electricity Mix is driving the growth Grid Storage.
  3. Reducing Capital Investments as Peak Power plants like Natural Gas Combined Cycle Plants are much more expensive to run than normal Thermal and Nuclear Energy Plants

Advantages and Disadvantages of Pumped Hydro Storage

This form of Energy Storage also leads to losses of between 15 – 30% due to inefficiency.There are also minor problems of environmental impact of large hydro plants and availability of  favorable sites. However Hydro power storage is quite inexpensive with  with estimates ranging from $500-$1500/kW power and $50-$150/kWh energy storage capacity; which is about 1/10th the cost of energy storage like Lithium Batteries.The main advantages are that it uses existing infrastructure of Hydro Power which has a large global installed base.In the 1930s technology was developed for building Turbines which could generate Electricity and also serve as Motors allowing Storage of Hydro Power.Also Pumped Hydro Storage has High Reliability of >99% and  relatively Long Cycle times which means that the stored electricity can be used in a few hours to a few days.

Why Invest in Pumped Hydro Storage

The trend towards Pumped Hydro Storage  is increasing with countries like China,Scotland,USA and Australia proposing massive new capacities.While USA has 21 GW and Europe 38 MW ,China has around 14.55 GW of Pumped Hydro Storage Capacity.China intends to increase this to 41 GW by 2020, which at $300,000/MW would mean an investment of ~7.5  BillionDollar by China alone over the next 10 years.

How to Invest in Pumped Hydro Storage

There are not a lot of glamorous startups in this form of Energy Storage unlike other segment of Green Industry like A123 Systems,Solyndra and Tesla.Most of the companies that can used to invest in this space are large global industrial companies like Toshiba and Emerson Control Systems.While a pure play is difficult to find,Investing in these Conglomerates is also a Less Risky Green Investment.

China State Grid to up pumped storage hydropower capacity – Reuters

The State Grid Corp of China, China’s dominant grid operator, plans to raise its pumped storage hydropower generating capacity to 21 gigawatts (GW) by 2015 and 41 GW by 2020, complementing the fast development of irregular renewable energy sources such as wind and solar power.On Sunday, the State Grid started building a 1.2 GW pumped storage hydropower plant in southern Jiangxi province, the first phase of a planned 2.4 GW capacity expansion that will have a total cost of about 5 billion yuan ($732.3 million).China had only 14.55 GW of pumped storage hydropower capacity at the end of 2009, according to the State Grid.China’s total power generating capacity was 874 GW at the end of 2009


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

6 Responses so far | Have Your Say!

  1. glenn2ns

    Nice write up on storage. What does $305k/MW get? Reservoir via dam? Turbines/generators? Or just secondary pumps?

    In any event, opportunities for GW fluid storage are well within the state of present commercial technology -just not exploited.

  2. Abhishek

    Most of the source that I looked at mentioned the costs to be $500-$2000 range per KwH of storage.Lithium Ion Batteries cost around $1000/Kwh.Am not sure whether these costs are standalone in terms of building a pure hydro storage facility?

  3. Peter Lang

    The article above states:

    “Hydro Power Storage is quite expensive with estimates ranging from $500-$1500/KwH which is comparable to the most expensive forms of Energy Storage like Lithium Batteries.”

    There is an important error which highlights the frequent confusion between power, energy, and energy storage capacity.

    This should be restated as follows:

    “Pumped-Hydro Storage is the cheapest energy storage technology with estimates ranging from $500-$1500/kW power and $50-$150/kWh energy storage capacity; which is about 1/10th the cost of energy storage like Lithium Batteries.”
    Ref. Electricity Storage Association

  4. Abhishek

    Thank you for pointing that out.

  5. Vinay


    Nice Write up.

    I am seeking information on following.

    1. Factors considered for Hydro Potential Estimation
    2. Feasiblity of Pumped Strorage Plants in India

  6. Matthew Shapiro

    Your article poses an important question. Gridflex Energy is one of a new generation of firms focusing specifically on the development of pumped storage (and CAES as well). While Gridflex doesn’t argue whether pumped storage is itself green or not, its primary focus is the integration of renewable resources. Most new sites being proposed today – at least in the U.S. – are “closed loop” projects that don’t involve natural waterways, so in that sense they are in and of themselves much greener than some those built in the past. Finding investment dollars is key.