by Pumped hydro storage or PHS is a type of grid energy storage that conserves energy in the form of gravitational potential energy of water to balance electricity supply and demand. It works by moving water between a reservoir at a higher elevation and a reservoir at a lower elevation during periods of excess energy availability. It allows the potential energy from the stored water to be converted back into electricity during peak demand periods. Pumped hydro storage significantly helps in integrating renewable energy sources like wind and solar into the grid by storing excess energy generated during non-peak periods.
The global Pumped Hydro Storage Market is estimated to be valued at US$ 348.25 Bn in 2023 and is expected to exhibit a CAGR of 6.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Growing investments towards renewable energy resources is a major trend witnessed in the pumped hydro storage market. With renewable energy generation increasing substantially, there is a pressing need to store excess energy generated during non-peak periods to meet demand during peak hours. Pumped hydro storage helps fulfill this need by shifting excess renewable energy into potential energy of water reserves which can be released on demand. The European Commission has announced funding of €1 billion for demonstration projects focussing on renewable energy storage including pumped hydro storage. Countries like China and India are also focusing on expanding their renewable energy capacities which will necessitate greater energy storage capabilities including pumped hydro storage. Technological advancements are also being made to enhance the efficiency and performance of pumped hydro storage systems through innovations in reservoir design, turbines and pumping mechanisms.
Porter’s Analysis
Threat of new entrants: The pumped hydro storage market requires significant investments and operational expertise, thus acting as a barrier for new players to enter this market.
Bargaining power of buyers: The presence of numerous operators providing storage facilities to power producers and transmission system operators limits the bargaining power of buyers in this market.
Bargaining power of suppliers: Given the concentrated nature of technology providers for pumped hydro storage facilities, suppliers enjoy a higher bargaining power.
Threat of new substitutes: Alternatives like compressed air energy storage and lithium-ion batteries are emerging but pumped hydro storage currently offers the largest storage capacity at low costs.
Competitive rivalry: Due to the different geographical locations having varying capacity for hydro storage projects, head-to-head competition is low. However, operators compete on offering competitive tariffs.
Key Takeaways
The Global Pumped Hydro Storage Market Demand is expected to witness high growth, exhibiting CAGR of 6.9% over the forecast period 2023 to 2030, due to increasing deployment of renewable energy sources. Asia Pacific dominated the market in 2023 with a share of over 35%, with China accounting for the major demand on account of rapid capacity additions of hydro projects in the country.
Europe is anticipated to exhibit lucrative growth on account of strong policy support for deployment of energy storage systems to balance power grids and enable higher renewable energy penetration levels. Countries like Italy, Switzerland, and Austria are major contributors to the European pumped hydro storage market owing to extensive hydropower infrastructure.
Key players operating in the pumped hydro storage market are Duke Energy Corporation, EON SE, Enel SPA, Electricite de France SA, and Iberdrola SA along with technology providers General Electric Company, Siemens AG, Andritz AG, Mitsubishi Heavy Industries, Ltd, Voith GmbH & Co. KGaA, and Ansaldo Energia SpA. Strategic partnerships and investments in research & development of advanced hydro storage solutions are some of the key strategies adopted by market players.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
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