Can Pumped Hydropower Rescue the Renewable Revolution?
- July 2, 2026
Table of Contents
Across power systems worldwide, a growing paradox is emerging: the more renewable energy (RE) is generated, the more of it is being wasted. Grid operators are increasingly forced into “energy dumping” or curtailment when supply overwhelms the system’s ability to absorb it, turning green electricity into unused excess.
The scale of the issue is already becoming difficult to ignore. In Brazil, roughly 20% of solar output was curtailed in 2025, while across the Netherlands, France, and Germany, an estimated 3.9 terawatt hours (TWh) of RE had to be cut from the grid. In the UK, over £1 billion ($1.32 billion) was lost in 2025 as wind turbines were curtailed due to insufficient grid demand.
As renewable capacity continues to expand faster than grid flexibility, the question facing energy planners is no longer just how to generate more clean power, but how to ensure it is not lost when it is needed.
For the International Hydropower Association (IHA), the unprecedented curtailment levels recorded in 2025 serve as a stark warning for power systems worldwide. “The world is building clean generation at a rapid rate … but now that rate must be matched by building the infrastructure needed to use it or to store it,” stated IHA Chief Executive Eddie Rich.
(Also read: NPC Ramps Up Solar-Diesel Projects As Global Oil Price Risks Persist)
Enter, Pumped Storage Hydropower (PSH)
Lithium-ion batteries are used to store renewable energy for short periods and help balance daily peaks in electricity demand, but they typically only last four hours. For longer gaps when solar or wind output drops, more durable storage is needed to keep the grid stable.
Pumped-storage hydropower acts like a large-scale battery, where excess electricity during low demand is used to pump water from a lower reservoir to a higher one, storing energy as gravitational potential. When demand rises, the stored water is released back downhill through turbines to generate electricity on demand, helping balance variable renewable sources.
PSH is widely regarded as one of the most efficient and durable large-scale energy storage technologies. It offers relatively high round-trip efficiency, typically around 70 to 85%, which compares favorably with alternative long-duration storage pathways such as hydrogen or ammonia, where multiple energy conversion steps significantly reduce overall efficiency.
In addition to its efficiency advantage, PSH also stands out for its long operational life and minimal degradation. Unlike battery energy storage systems (BESS), which also achieve high round-trip efficiencies but experience gradual capacity loss over time due to chemical ageing and cycling stress, PSH infrastructure is primarily mechanical and therefore far less prone to energy degradation. As a result, BESS typically requires replacement or major augmentation within roughly 10 to 15 years, whereas PSH facilities often operate reliably for multiple decades, commonly 50 years or more, with performance maintained through routine maintenance and component refurbishment rather than full system replacement.
According to the IHA, PSH already dominates long-duration energy storage, with nearly 200 gigawatts (GW) of installed capacity accounting for around 90% of global supply. Early figures ahead of its 2026 World Hydropower Outlook also indicate strong momentum, with about 570 GW of additional PSH capacity currently under development worldwide.
The technology dates back to the late 19th century and saw major expansion in countries such as the US and UK in the following decades, before slowing by the 1990s. Originally developed to optimize excess output from fossil fuel plants, it is now being revalued by grid operators as a flexible tool for balancing variable wind and solar generation. The system can quickly absorb surplus electricity or supply power during shortfalls, storing energy for use over both short and extended periods.
Experts note that PSH is a proven and reliable technology that helps reduce reliance on fossil fuels, strengthens grid stability, and helps protect power systems from blackouts and disruptions caused by extreme weather events.
PH Turns to Pumped Hydro
In 2025, the Department of Energy (DOE) announced the list of bidders under the Third Round of the Green Energy Auction (GEA-3), highlighting a strong pipeline of PSH projects.
Among these, Pan Pacific Renewable Power Phils. Corp. is committed to the 2,000-megawatt (MW) Maton Pumped-Storage Hydropower Project in Apayao, alongside other hydro developments. Coheco Badeo Corporation accepted the 500-MW Kibungan Pumped-Storage project in Benguet.
Affiliates of Prime Infrastructure also moved forward with major investments, including the 600-MW Wawa Pumped-Storage project in Rizal and the 1,400-MW Pakil Pumped-Storage facility in Laguna. In addition, San Roque Hydropower, Inc. backed multiple projects, including the 800-MW San Roque Lower East and 800-MW San Roque West pumped-storage developments in Benguet, as well as the 250-MW Aklan Pumped-Storage project in Malay.
In February 2026, Lopez-led First Gen Corporation announced plans to acquire a 40% equity stake in Prime Infrastructure’s PSH assets. The deal covers the two pumped-storage facilities in Wawa and Pakil, backed by a combined committed capital of around P62 billion.
First Gen President Francis Giles Puno said PSH is well-suited to the Philippines’ next energy transition phase, offering long-duration storage for up to 10 hours. He added that with rising solar and wind capacity, the ability to store excess power and dispatch it when needed is becoming essential to grid reliability.
At the Pakil PSH project, water will be pumped from Laguna de Bay through a canal when electricity supply exceeds demand. During peak periods, it will be released to generate up to 1,400 MW of power—enough to serve more than half of the Visayas. Once operational, the facility is expected to supply electricity to over 2.3 million households annually and reduce coal use by about 3.1 million tons each year.
Both the Wawa and Pakil projects were designated by the national government as “Energy Projects of National Significance.”
(Also read: Government Ramps Up Waste-To-Energy Drive With Bigger Auction)
How Other Countries Are Scaling Pumped Storage
Across continents, pumped-storage hydropower (PSH) is rapidly re-emerging as a cornerstone of the global energy transition, driven by the rising share of variable RE.
China remains the undisputed leader, accounting for roughly 40% of global PSH capacity with more than 50 GW installed. Its flagship Fengning Pumped Storage Power Station in Hebei province—operated by the State Grid Corporation of China—is the world’s largest, with 3.6 GW of capacity built in two phases and completed in 2024.
Beyond scale, China is accelerating further, with more than 200 GW of projects under construction and a potential trajectory toward 130 GW by 2030. Policy support, rising peak tariffs, and rapid wind and solar expansion are all reinforcing the economics of storage.
Europe is also scaling aggressively. In Spain, the Aguayo II expansion in Cantabria will add 1.4 GW of capacity using underground infrastructure and reversible turbines, making it one of the continent’s largest hydro assets. The European Union has backed such projects with major funding, including €180 million (US$207 million) for Aguayo II under its cross-border energy infrastructure program, alongside upgrades to existing PSH facilities in Slovakia.
Elsewhere, Morocco is advancing PSH as a stabilizing backbone for a grid targeting 52% RE by 2030. The Abdelmoumen plant (350 MW) demonstrates how storage is being used to manage solar and wind variability while supporting industrial growth and peak demand.
In Germany, the Goldisthal plant (1.06 GW) showcases PSH flexibility, capable of switching from pumping to generation within minutes and providing up to nine hours of dispatchable power.
Australia is building Snowy 2.0, a massive 350 GWh storage expansion due by 2028.
Meanwhile, the United Kingdom is targeting up to 10 GW of PSH capacity by the mid-2030s, with major projects such as Coire Glas (1.3 GW) and Earba (up to 1.8 GW) positioned near wind assets to capture surplus generation. Policy mechanisms like cap-and-floor regulation are being introduced to improve investment certainty.
Together, these developments reflect a clear global pattern: as renewable penetration deepens, pumped-storage hydropower is becoming a critical infrastructure layer for balancing, storing, and dispatching clean electricity at scale.
Barriers to Pumped-Storage Adoption
Despite growing momentum for PSH, expansion outside China, particularly in the East Asia and Pacific region, continues to face major financial and structural barriers. High upfront capital requirements, long payback periods, and limited private sector participation remain key constraints.
Regulatory complexity is also slowing progress in countries such as Vietnam, Indonesia, and Australia, where permitting delays, land rights disputes, and environmental assessments add uncertainty to project development timelines. Industry players are expanding investments, but entry barriers remain high, with construction costs estimated at $1,500 to $2,500 per kilowatt hour.
Environmental constraints further narrow viable sites, with research indicating that up to 60% of proposed locations are ruled out due to ecological sensitivity or local opposition. Even flagship projects have struggled: Australia’s Snowy 2.0 has faced significant delays and cost overruns, including environmental compliance concerns linked to construction activity.
In the Philippines, similar concerns have emerged around the Pakil PHS project, where local opposition has grown alongside its clean energy ambitions. Critics have raised concerns over potential impacts on nearby communities, ecosystems, water resources, and culturally significant areas.
The Department of Environment and Natural Resources (DENR) has noted that more than 3,000 trees may be cleared for the project, fueling fears of increased disaster risks linked to large-scale deforestation in the area.
Local farmers have also expressed concern over around 69 hectares of agricultural land that could be affected, much of it registered under the Registry System for Basic Sector in Agriculture and vital for rice production in Pakil.
A Transition With No Easy Wins
As PHS and other large-scale balancing solutions scale up to prevent curtailment and stabilize grids, the energy transition is increasingly exposing its own environmental and social trade-offs. Land use changes, ecological disruption, and community displacement concerns underscore that even technologies designed to enable “clean” power are not without cost.
This is the uneasy paradox at the heart of the transition. While renewable energy remains essential to addressing the climate crisis, its deployment is not inherently benign. The pursuit of decarbonization, if not carefully planned and inclusively managed, risks creating new pressures on ecosystems and communities in the very places meant to benefit from it.
In the end, the shift to RE is not a simple trade-off between good and bad, but a complex balancing act. The challenge ahead is not only to accelerate renewable deployment, but to ensure it is done thoughtfully enough that the solutions do not unintentionally undermine the environments and societies they aim to protect.
Sources:
https://www.wired.com/story/pumped-hydro-energy-storage-is-having-a-renaissance
https://www.energy.gov/cmei/water/pumped-storage-hydropower
https://pia.gov.ph/press-release/doe-announces-award-acceptances-under-gea-3
https://pcij.org/2026/06/23/tycoons-swoop-in-clean-energy-boom
https://businessmirror.com.ph/2026/05/28/wawa-pakil-hydro-projects-to-prop-up-first-gen-profits
https://primeinfra.com/sectors/ahunan-power-inc
https://www.ess-news.com/2026/02/03/spain-secures-major-eu-grant-for-1-gw-pumped-storage-project/
https://pinoyweekly.org/2025/08/muog-laban-sa-dambuhalang-dam/
https://www.linkedin.com/pulse/pumped-hydro-storage-vs-battery-energy-system-prakash-chaganty-lmdnc
