Pumped Hydro Storage Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By System (Open-Loop and Closed-Loop), By Application (Natural Reservoirs and Man-Made Reservoirs), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 50.25 Billion
CAGR (2026-2031)	9.28%
Fastest Growing Segment	Open-Loop
Largest Market	North America
Market Size (2031)	USD 85.58 Billion

Market Overview

The Global Pumped Hydro Storage Market will grow from USD 50.25 Billion in 2025 to USD 85.58 Billion by 2031 at a 9.28% CAGR. Pumped Hydro Storage is a mature grid-scale energy storage technology that utilizes two water reservoirs at different elevations to store and generate electricity based on gravitational potential energy. The market is primarily supported by the critical need for grid stability and the escalating requirement to integrate intermittent renewable energy sources such as wind and solar into national power networks. Furthermore, the growing demand for long-duration energy storage to manage peak electricity loads and ensure energy security acts as a fundamental catalyst for the expansion of these facilities globally.

However, the sector faces a significant challenge regarding the substantial upfront capital investment and extended construction timelines required for developing these large infrastructure projects. These financial and procedural hurdles can create funding gaps and delay project implementation, thereby impeding rapid market growth. According to the International Hydropower Association, in 2024, the global pumped storage hydropower capacity expanded by 8.4 gigawatts to reach a total installed capacity of 189 gigawatts.

Key Market Drivers

The exponential growth of variable renewable energy integration serves as the primary catalyst for the Global Pumped Hydro Storage Market. As nations rapidly scale up solar and wind generation, the inherent intermittency of these sources creates critical imbalances between supply and demand that threaten grid stability. Pumped hydro storage acts as a vital buffer, absorbing excess renewable output during periods of low demand and releasing it during peak consumption, thereby functioning as a giant rechargeable battery for national grids. This capability is essential for maintaining frequency control and preventing blackouts in high-penetration renewable scenarios. The urgency of this requirement is evident in recent projections; according to the International Energy Agency, October 2025, in the 'Renewables 2025' report, annual pumped storage capacity additions are forecasted to double to nearly 16.5 GW by 2030 to accommodate the surging levels of variable green energy.

Supportive government frameworks and aggressive decarbonization targets further accelerate market expansion by de-risking the substantial capital requirements of these infrastructure projects. Governments worldwide are implementing long-term policy mechanisms, such as capacity payments and streamlined permitting processes, to ensure sufficient energy storage supports their net-zero commitments. China, leading this policy-driven charge, has established rigorous mandates to bolster its energy security. According to the International Hydropower Association, June 2025, in the '2025 World Hydropower Outlook', China is on track to exceed its national targets, with installed pumped storage capacity potentially reaching 130 GW by 2030. This policy momentum is reflected globally, as developers rush to secure sites to meet future storage needs. According to the International Hydropower Association, in 2025, the total global development pipeline for pumped storage hydropower projects has swelled to approximately 600 GW, signaling robust long-term growth.

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Key Market Challenges

The substantial upfront capital investment and extended construction timelines required for pumped hydro storage projects act as a formidable barrier to market expansion. These facilities necessitate massive civil engineering works, including the construction of large reservoirs, dams, and complex underground tunneling, which drive initial costs into the billions of dollars. The magnitude of such infrastructure inevitably leads to lengthy development periods, often spanning a decade or more from planning to commissioning. This prolonged duration introduces significant financial uncertainty, as investors face delayed returns and risks associated with potential cost overruns or regulatory shifts, effectively deterring private capital and stalling project financial closure.

Consequently, a major disparity exists between the capacity under planning and the projects that successfully reach the construction phase, creating a bottleneck in market growth. The financial risks associated with these long lead times prevent many technically viable sites from progressing to execution. According to the International Hydropower Association, in 2025, the global development pipeline for pumped storage hydropower comprised around 600 gigawatts of capacity. This extensive backlog highlights how financial and procedural hurdles severely restrict the conversion of planned facilities into operational assets, thereby impeding the sector's ability to scale rapidly.

Key Market Trends

Repurposing Abandoned Mine Sites for Brownfield Development is gaining traction as a strategic trend to address land scarcity and reduce construction timelines. This approach utilizes disused open-pit mines or underground shafts as pre-existing reservoirs, significantly lowering the capital expenditure required for massive excavation works and minimizing the environmental impact compared to greenfield projects. Developers are increasingly capitalizing on these sites to leverage established grid connections and road infrastructure while providing economic revitalization to former mining regions. Highlighting this shift, according to Water Power & Dam Construction, December 2024, in the 'Reviving disused mines' report, the Kidston Pumped Storage Hydro Project in Australia is advancing with a capacity of 250 MW, transforming retired gold mining pits into a functional energy storage asset.

Simultaneously, the Integration of Floating Solar Photovoltaics on Reservoirs is emerging as a key strategy to hybridize assets and enhance operational efficiency. By deploying solar panels directly on water surfaces, operators can generate supplementary renewable electricity while reducing reservoir evaporation, a critical advantage for maintaining water levels in arid regions. This configuration optimizes existing transmission infrastructure and improves solar panel performance through the cooling effect of the water, creating a synergistic energy system. Evidence of this growing adoption is clear; according to Rinnovabili, June 2025, in the '2025 World Hydropower Outlook', Brazil commenced the construction of the country's largest floating solar plant with a capacity of 54 MW at the Lajeado hydro reservoir, showcasing the scalability of this hybrid solution.

Segmental Insights

Based on industry analysis, the Open-Loop segment is identified as the fastest-growing category in the Global Pumped Hydro Storage Market. This accelerated expansion is primarily driven by the ability to retrofit existing hydroelectric dams and free-flowing water sources, which significantly reduces capital expenditures and construction timelines compared to greenfield projects. Developers are increasingly favoring this configuration to leverage established reservoirs, thereby minimizing civil engineering requirements and environmental assessments. Consequently, the urgent need for grid stabilization and the cost-effective modernization of aging infrastructure are propelling the rapid adoption of open-loop systems globally.

Regional Insights

North America dominates the Global Pumped Hydro Storage Market, driven by its extensive mature infrastructure and a critical focus on grid modernization. The region’s leadership is reinforced by strategic support from the U.S. Department of Energy, which actively promotes the refurbishment of aging assets to improve flexibility and accommodate intermittent renewable energy sources. Furthermore, the Federal Energy Regulatory Commission provides essential regulatory stability through streamlined licensing processes that encourage investment in capacity upgrades. This strong combination of governmental backing and the urgent need for reliable, long-duration energy storage secures North America's position as the leading regional market.

Recent Developments

• In June 2025, GE Vernova commissioned the first of four 250 MW variable speed units at the Tehri Pumped Storage Hydropower Plant in India. This milestone marked the deployment of the country's first variable speed pumped storage technology, designed to offer rapid response times to load changes and enhance grid flexibility. The project, executed for THDC India Limited, involved a full water-to-wire solution including generating equipment and power electronics. With this expansion, the complex was set to become one of the largest hydropower hubs in the region, significantly boosting the capability to integrate intermittent renewable energy sources.
• In September 2024, Queensland Hydro awarded major contracts valued at approximately AUD 80 million for the development of the Borumba Pumped Hydro Project in Australia. The company selected a joint venture comprising GHD, Mott MacDonald, and Stantec to provide dams design engineering services for the project's upper and lower reservoirs. Additionally, a contract for front-end engineering design was granted to a partnership between AFRY and Aurecon. These collaborations were established to advance the 2,000 MW renewable energy storage facility, which is intended to provide reliable dispatchable power and support the state's transition to a renewable energy grid.
• In July 2024, Voith Hydro was selected by a renewable energy developer to conduct a front-end engineering and design study for the Cruachan 2 pumped storage hydro scheme in Scotland. This project, located adjacent to an existing facility, was designed to add approximately 600 MW of capacity, playing a vital role in the United Kingdom's energy transition. The scope of the collaboration included creating detailed reports and models to define the project's design, cost, and timeline. The initiative underscored the growing importance of expanding long-duration energy storage infrastructure to support the integration of wind and solar power.
• In January 2024, Andritz received a contract from the construction branch of GEK Terna Group to supply electromechanical equipment for the Amfilochia pumped storage complex in Greece. The project, described as the largest grid energy storage investment in the country, involved the design, manufacturing, and installation of six reversible pump-turbine generator units. Once operational, the facility was expected to feature a total installed capacity of 680 MW for generation and 730 MW for pumping. This collaboration highlighted the role of advanced pumped storage technology in balancing power fluctuations from renewable sources and ensuring grid stability.

Key Market Players

• Electricite de France SA
• Iberdrola SA
• EON SE
• General Electric Company
• Voith GmbH & Co. KGaA
• Mitsubishi Heavy Industries Ltd
• Toshiba Energy Systems & Solutions Corporation
• Andritz Hydro GmbH
• Alstom SA
• Duke Energy Corporation

By System	By Application	By Region
Open-Loop and Closed-Loop	Natural Reservoirs and Man-Made Reservoirs	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Pumped Hydro Storage Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Pumped Hydro Storage Market, By System:

• Open-Loop and Closed-Loop

• Pumped Hydro Storage Market, By Application:

• Natural Reservoirs and Man-Made Reservoirs

• Pumped Hydro Storage Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE