PUMPED HYDRO STORAGE MARKET ANALYSIS

The Global Pumped Hydro Storage Market was valued at US$ 348.25 Bn in 2023, exhibiting a CAGR of 6.9% in terms of revenue, over the forecast period (2023 to 2030) to reach US$ 554.21 Bn by 2030. The market for pumped hydro storage systems is growing at a fast rate. The increasing demand for flexible energy sources is driving the installation of new projects. In addition, the demand for renewable energy is growing rapidly. As renewable energy sources become more prevalent, more governments are implementing programs to support them. Stringent government regulations are also driving the renewable energy market’s growth, which, in turn, augments PHS (Pumped hydro storage )market growth. Other factors contributing to the market’s growth include the implementation of new government targets that aim to reduce carbon emissions. These initiatives will further boost the market's adoption of PHS technology.

COVID-19 Impact on Global Pumped Hydro Storage Market

The COVID-19 outbreak has had an adverse impact on various industries around the globe. Due to the strict rules and regulations undertaken by the government to curb the spread of the infection, companies are looking to function remotely. Moreover, various companies are looking to implement strict measures to operate at minimum risk. Additionally, various companies shutdown their manufacturing units, which had an adverse impact on the pumped hydro storage market.

Global Pumped Hydro Storage Market- Drivers

• Increasing integration of renewable energy sources: Increasing integration of renewable energy sources and a growing focus on ensuring grid stability are prime factors augmenting growth of the global pump hydro storage market. According to the International Renewable Energy Agency, as of 2020, the global renewable energy capacity stood at 2799.09 GW, of which wind energy accounted for 733.27 GW (26.2%) and solar energy accounted for 713.97 GW (25.5%) of the total installed capacity. For instance, in February 2021, ANDRITZ received an order from TIWAG-Tiroler Wasserkraft AG to supply two 95 MVA motor-generators for the new Kuhtai 2 pumped storage power plant in Austria.

• Advancements in Technology: Advancements in technology are making pumped hydro storage more efficient and cost-effective than ever before. For example, new software and control systems are improving the performance and reliability of pumped hydro storage systems, while advances in materials science are making it possible to build larger and more efficient storage facilities. In 2022, the US Department of Energy announced a $2.5 million funding opportunity for research and development of advanced pumped hydro storage technologies, highlighting the importance of continued innovation in this field.

Global Pumped Hydro Storage Market- Restraints

• High Initial Investment Costs: Pumped hydro storage projects require substantial upfront investment, including the construction of reservoirs, tunnels, and powerhouses. These costs can be a significant barrier to entry for new projects, especially in regions with limited access to suitable topography and water resources. For instance, in 2020, the proposed Goldendale Energy Storage Project in Washington State, USA, was canceled due to financial challenges, highlighting the difficulties in securing funding for large-scale pumped hydro storage projects.

 Global Pumped Hydro Storage Market- Segmentation

Based on type, the market is segmented into open-loop and closed-loop. Out of which, 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.

Figure 1: Global Pumped Hydro Storage Market, By Application, 2023

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Global Pumped Hydro Storage Market- Opportunities

• Increasing development of novel PSH technologies: The increasing development of novel PSH technologies is projected to provide significant growth opportunities for the market over the forecast period. For instance, the development of seawater-based PSH projects is a major development opportunity for the PSH market. Seawater-based PSH systems use ocean saltwater for pumped storage plants, with the ocean as the lower reservoir, minimizing consumption of freshwater.

Global Pumped Hydro Storage Market- Trends

• Increasing number of renewable sources across developing region: The increasing number of renewable sources across developing regions is emerging as a major trend in the market. In 2020, the total renewable energy (including hydropower) in the Middle East and Africa region was 229 TWh, accounting for about 11% of the total region's electricity generation. It has witnessed a growth of 3% compared to 2019, mainly contributed by hydropower.

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 2022, 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. Europe is projected to hold the second-leading position in the global market over the forecast period owing to the increasing developments associated with pumped hydro storage in the region. Moreover, the 2022 years presented a key milestone toward decarbonization in the European Union, as all renewable sources together generated more electricity than conventional fuels for the first time.

Figure 2: Global Pumped Hydro Storage Market, By Region, 2023

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Global Pumped Hydro Storage Market- Key Developments

• In April 2020, Enel Green Power was awarded 68 MW of new renewable capacity for two wind projects and 38.3 MW of nominal capacity from the repowering of operational hydroelectric plants in the second renewable auction launched by Italian state-owned energy service company GSE (Gestore Servizi Energetici).
• The company participated in the 500-MW tender for new wind and solar projects and the 98.5-MW tender for renovations of renewable plants with a capacity exceeding 1 MW.
• In August 2021, Enel announced that it will acquire ERG’s hydropower plants in Italy for 1 billion euros. The acquisition included 19 hydroelectric plants, seven microhydroelectric plants, seven large dams, and four reservoirs.
• In October 2021, Electricite de France SA (EDF) and NTPC Ltd., India's largest energy integrated company, signed a Memorandum of Understanding (MoU) in collaboration to explore potential power project development opportunities in the Middle East, Asia, Europe, and Africa.
• In July 2020, GE Renewable Energy signed two hydropower contracts in the U. S., one for First Light’s Northfield Mountain project (design, supply, and installation of 4 x 292 MW pumped hydro storage stations).
• In August 2020, GE Renewable Energy signed an agreement with Walcha Energy to accelerate the 500 MW Dungowan pumped hydro storage project in New South Wales (NSW), Australia.
• In September 2020, GE Renewable Energy announced the supply and commissioning of four 125 MW fixed-speed pumped storage turbines for the new Kundah hydropower plant in India.

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)

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.