Pumped Hydro Storage Market Size & Analysis for North America, Europe, APAC, South America, Middle East and Africa - US, UK, France, Germany, China – 2025-2029

Pumped Hydro Storage Market Size 2025-2029

The pumped hydro storage (PHS) market is projected to grow by USD 50-80 billion at a compound annual growth rate (CAGR) of 12%-15% from 2025 to 2029, driven by the increasing demand for energy storage solutions and the integration of renewable energy sources into power grids. The global pumped hydro storage market is anticipated to witness significant expansion, driven by the increased adoption of both open and closed-loop PHS systems. By 2030, nearly 240 GW of pumped hydro storage projects are expected to come online, with the APAC region, particularly China, leading the charge and experiencing the highest annual increase in capacity. Several pumped hydro storage companies are focusing on advancing pumped hydro storage technology to enhance the efficiency and environmental sustainability of these systems. In line with this growth, pumped hydro storage systems are being deployed to improve grid stability, manage renewable energy fluctuations, and provide reliable energy storage solutions. The diverse pumped hydro storage applications span across utilities, grid balancing, and energy security. 

As the industry continues to evolve, pumped hydro storage innovations are focused on improving energy efficiency, reducing operational costs, and addressing environmental concerns. Increased pumped hydro storage investments are expected to fund the expansion of pumped hydro storage infrastructure, including the construction of new facilities and retrofitting of existing plants. The pumped hydro storage benefits include long-duration storage, high efficiency, and low operational costs, making it a critical component of the energy transition. As a result, the pumped hydro storage deployment is set to accelerate, offering promising opportunities for developers and stakeholders across the globe.

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How Is This Market Segmented?

Type

• Open-loop
• Closed-loop

Geography

• North America
• Europe
• APAC
• South America
• Middle East and Africa

The pumped hydro storage market is primarily segmented into two types: open-loop and closed-loop systems. The closed-loop segment is expected to dominate the market during the forecast period. Closed-loop systems, which do not rely on natural water inflows, offer better environmental benefits and regulatory advantages, making them more appealing for new installations. This segment’s growth is further fueled by the rising number of permits and licensing applications, particularly in the US, as they are easier to approve compared to open-loop systems.

Regional Analysis

The APAC region is expected to hold the largest market share, with China driving the majority of growth. Countries like Indonesia are also making significant strides, with large-scale projects such as the 500 MW Sumatera Pump Storage project in West Sumatra, Indonesia, set to enter construction in 2024.

Market Dynamics

Market Growth and Key Drivers

The PHS market is experiencing growth due to several factors, including the rising need to stabilize power grids amid the growth of variable renewable energy sources, such as wind and solar. Additionally, government initiatives to phase out fossil fuels are accelerating the demand for sustainable and efficient energy storage technologies. The market is also benefiting from the development of closed-loop pumped hydro storage systems, which offer enhanced environmental and operational advantages over traditional open-loop systems. These systems are expected to gain significant traction due to their ability to provide flexibility and support to the grid without impacting natural water sources.

Market Trends

Several trends are shaping the pumped hydro storage market:

• Renewable Energy Integration: The push towards renewable energy integration is a primary driver for the adoption of PHS systems as they provide a reliable and flexible means to store excess energy.
• Government Support: Government policies aimed at reducing carbon emissions and phasing out fossil fuels are creating a favorable environment for pumped hydro storage technologies.
• Technological Innovations: The development of closed-loop PHS systems with reduced environmental impacts is accelerating market growth.

Challenges and Opportunities

Despite the growth potential, the PHS market faces challenges related to environmental and social impacts of large-scale projects, as well as competition from alternative energy storage technologies like lithium-ion batteries. However, ongoing advancements in PHS technology, including reduced environmental footprints and cost-effective solutions, offer significant growth opportunities for market players.

Competitive Landscape

Key players in the pumped hydro storage market include international utilities, renewable energy developers, and technology providers working on innovative PHS solutions. Companies are expanding their portfolios through strategic partnerships, mergers, and project developments to capitalize on growing energy storage demands. Companies operating in this market include:

• General Electric Company
• Siemens AG
• Andritz AG
• Mitsubishi Heavy Industries Ltd
• Duke Energy Corporation
• EON SE
• Enel SpA
• Electricite de France SA (EDF)
• Iberdrola SA

Market Scope

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Table of Contents

1. Executive Summary
2. Scope of the Report
3. Market Landscape
3.1 Market Ecosystem
3.2 Market Characteristics
3.3 Market Segmentation Analysis
4. Market Sizing
4.1 Market Definition
4.2 Market Sizing 2023
4.3 Market Size and Forecast 2024-2028
4.4 Historic Market Size (2018-2022)
5. Impact of Technology
6. Five Forces Analysis
6.1 Bargaining power of buyers
6.2 Bargaining power of suppliers
6.3 Threat of new entrants
6.4 Threat of substitutes
7. Rivalry among competitors
8. Market Segmentation by Type
9. Customer Landscape
10. Drivers and Challenges
11. Market Trends
12. Competitive Landscape
13. Appendix
13.1 Research Methodology
13.2 List of Abbreviations