Pumped hydro storage to ‘turbocharge’ energy transition – IHA
A new industry report forecasts a significant increase in pumped hydropower storage capacity – but notes that inadequate funding models could hinder the technology’s expansion.
The International Hydropower Association (IHA) has predicted that existing pumped hydropower storage (PHS) capacity will increase by almost 50% by 2030 in a report: The World’s Water Battery.
The organisation reports that there are more than 100 PHS projects currently under construction worldwide. According to the study, these plants will take PHS capacity from 161 GW today to 239 GW in 2030. IHA also estimates that PHS projects now store up to 9,000 GWh of electricity globally.
‘Pumped hydropower storage accounts for over 94% of global energy storage capacity, ahead of lithium-ion and other forms of storage,’ says IHA Senior Analyst Nicholas Troja, one of the paper’s authors. ‘It will play a critical role in the clean energy transition by supporting variable renewable energy.’
The paper describes the benefits of pumped storage for balancing peaks and troughs in solar and wind energy production. It states that PHS provides reliable energy in bulk and on demand for sustained periods, which avoids the need to curtail renewables during periods of excess supply and further supports their continued deployment.
However, despite the projected growth in PHS capacity, the report’s authors note that existing regulatory frameworks don’t properly incentivise the services it provides. Troja adds: ‘Pumped storage technology and operations support the energy transition, however policies and market frameworks have struggled to catch up and are failing to adequately reward the flexibility provided by hydropower.’
While PHS is a proven technology, the report notes that projects face long payback periods and high upfront capital costs. IHA has found that the vast majority of PHS plants currently in operation were commissioned and financed under public ownership by utilities that enjoyed a monopoly status.
Many projects in the pipeline today are being executed under similar market conditions, which the report says points to: ‘deficiencies in how liberalised markets are incentivising development and rewarding their services.’ Ultimately, IHA believes that the failure to provide certainly and clarity in policy and market regulation will increase borrowing costs and deter investment in new PHS.