HomeBusiness NewsPumped Hydro Storage Market Will Reach USD 643.9 Billion By 2030

Pumped Hydro Storage Market Will Reach USD 643.9 Billion By 2030

In 2023, the worldwide pumped hydro storage market had a value of USD 353.8 billion. It is forecasted to grow to USD 643.9 billion by 2030, with a compound annual growth rate (CAGR) of 9.2% from 2024 to 2030.

This growth of the market can be credited to the growing deployment of alternating renewable power sources, like solar and wind power; the increasing need for grid steadiness and dependability; and severe government guidelines that target to decrease carbon emissions. Also, the lengthy operational lifetimes and a comparatively low ecological impact in comparison to other power storage techs make them a better option for power grids.

Market Drivers

  • Hydropower, a sustainable and traditional renewable energy source that has been around for a while, is important for the transition to a clean and resilient grid, and pumped storage hydropower (PSH) is playing a key role.
  • Pumped storage hydropower provides a green technology that assists communities dealing with water shortage and the problem of accessing power by transforming the flowing water into electricity without affecting its quality or the amount.
  • The need for energy in the world has skyrocketed due to city development and the rising population; the global population is projected to reach 9.8 billion by 2050 and currently stands at 8.0 billion as per a UN report.
  • The largest energy source globally is fossil fuels; thus, subsequent GHG emission occurs through combustion.
  • In their report, the International Energy Agency (IEA) states that global electricity consumption will grow at an average rate of 2.1% by 2040.
  • In the situation of a rapid surge in electricity requirement or unpredicted power plant outages, such storage services can quickly supply power to stabilize the grid.

The closed Loop Category Is Set to Advance with a Higher CAGR

The closed-loop category is expected to grow rapidly at a 12% CAGR during the forecast period, driven by its high flexibility, reliability, and power output. This technology has a lower environmental impact since it does not consume water from natural sources like rivers or lakes. Its flexibility allows for installation in areas without nearby water bodies, making it ideal for grid support.

Additionally, closed-loop systems are more efficient as they eliminate the need to evaporate water from the lower reservoir. According to NREL, closed-loop pumped storage has the lowest Global Warming Potential.

  • Closed-loop pumped hydro storage does not need a link to a natural body of water.
  • Instead, closed-loop pumped storage systems utilize two artificial reservoirs, with one situated at a higher elevation than the other, for water storage.
  • Excess energy or surplus power is used to pump water from the lower reservoir to the upper reservoir in these systems.
  • By 2030, the open-loop hydro storage systems category is projected to attain a larger share.
  • This is primarily because of the constant government steps for renewable power generation.
  • Open-loop systems include guiding a stream of water to either the lower or upper reservoir.

Asia-Pacific Is Dominating the Market  

In 2023, the APAC region generated the largest revenue share in the industry, of approximately 45%. This can be credited to the growing fitting of pumped hydro storage capacity. Besides this, the rapid economic growth now causes high energy consumption for generating electricity as well as promotion of industrial growth for industries which PHS can supply for this purpose and help industrial development.

The reason is that this type of power storage technology is the most scalable among all other kinds of energy storage solutions, including battery storage, fuel cell storage with hydrogen, and gravity battery storage.

Competition Analysis

  • Market players are leveraging strategic initiatives such as mergers, collaborations, and acquisitions to strengthen their market positions.
  • Tata Power has signed an agreement with the Government of Maharashtra for the development of two pumped hydro storage projects totaling 2,800 MW in capacity.

Source: P&S Intelligence