Pumped Hydro Storage Market Analysis by Type (Open-Loop Closed-Loop); Source (Natural Reservoirs, Man-Made Reservoirs); End User (Government Agency, Grid Operators, Electricity Utilities) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4909 | Published Date: May 02, 2023
The global pumped hydro storage market size is estimated to reach ~USD 650 Billion by the end of 2035 by growing at a CAGR of ~10% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of pumped hydro storage was ~USD 330 Billion. The growth of the market can be attributed to the rising initiatives to increase the pumped hydro storage capacity. The National Energy Administration (NEA) of China announced a mid-term and long-term plan for pumped storage development from 2021 to 2035. According to this proposal, installed pumped storage hydropower capacity in China would be at least 62 GW in 2025, and over 120 GW in 2030. China's existing pumped storage capacity is expected to reach 50 GW by the end of November 2022.
In addition to these, factors that are believed to fuel the market growth of pumped hydro storage include the rise in the rising use of renewable energy resources for producing electricity. The fast expansion of variable renewable energy (VRE) sources such as solar and wind is driving up the demand for stable, dependable storage solutions that can function at the functionality scale. Moreover, the degree of versatility that pumped hydro provides through storage and related grid services is becoming increasingly vital in ensuring reliable electricity supplies. Besides this, the growing need for reducing carbon emissions is also expected to drive market growth. Pumped Storage International Forum Hydropower is a consortium of 13 governments led by the United States Department of Energy that launched a proposal in September 2021, with the objective to meet the critical demand for green, long-duration energy storage in the transition to clean energy.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~10% |
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Base Year Market Size (2022) |
~ USD 330 Billion |
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Forecast Year Market Size (2035) |
~ USD 650 Billion |
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Regional Scope |
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Growth Drivers
Challenges
The global pumped hydro storage market is segmented and analyzed for demand and supply end user into government agency, grid operators, electricity utilities and others. Out of the four end users of pumped hydro storage, the electricity utilities segment is estimated to gain the largest market share of about ~38% in the year 2035. The growth of the segment can be attributed to the growing capacity of pumped hydro storage for producing more electricity. The building of the Lower Sesan II project in Stung Treng province is going to give a further boost to hydropower. The USD 800 million-dollar project is designed to generate 400 megawatts of electricity when fully operational, making it the largest hydroelectric station in the country. When the dam's floodgates were closed in September 2017, water levels began to climb. The first turbine began producing electricity in November 2017. All eight turbines are operational in October 2018. Moreover, the rising demand for electricity all across the world is also expected to drive the growth of the segment.
The global market is also segmented and analyzed for demand and supply by type into open-loop, and closed-loop. Amongst these two segments, the closed-loop segment is expected to garner a significant share of around ~46% in the year 2035. Closed-loop pumped hydro storage is more flexible than open-loop and this is the primary reason for the segment’s growth. Closed-loop systems do not require a nearby natural water source, such as a river or lake, as the water is stored and reused within the system. This makes a closed loop suitable for a wider range of locations, including areas that are not in proximity of water bodies, this makes closed-loop easier to implement. Moreover, closed-loop systems are generally more environmentally friendly than open-loop systems. As these systems do not require natural sources hence, less impact is imposed on aquatic environments.
Our in-depth analysis of the global pumped hydro storage market includes the following segments:
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By Type |
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By Source |
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By End User |
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The market share of pumped hydro storage in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~35% by the end of 2035. The growth of the market can be attributed majorly to the rising production of electricity from pumped hydro storage. Pumped storage hydropower (PSH) is a well-established and widely used form of energy storage system, accounting for 93% of all utility-scale energy storage capacity in the United States. Moreover, the present-day hydropower plant pumped storage fleet in the United States contains around 22 gigatonnes of electricity-generating capacity and 550 gigatonnes of energy storage, with plants in every area of the country. Moreover, a rise in the number of pumped storage hydropower plants is also expected to drive market growth in the region. According to the statistics from the Office of Energy Efficiency & Renewable Energy, America presently has 43 PSH plants and has the capacity to more than double its existing PSH capacity by adding enough additional PSH plants.
The Asia Pacific pumped hydro storage market is estimated to be the second largest, registering a share of about ~28% by the end of 2035. The growth of the market can be attributed majorly to the rising production of hydroelectricity and higher construction of storage plant. Since the beginning of the century, the installed hydroelectric capacity in China has quadrupled, representing more than half of global expansion. According to the IHA's 2022 Hydropower Status Report, overall hydropower capacity reached 391 GW in 2021, following large additions in China such as the 3,400 MW Wudongde, 2,500MW Lianghekou, and 1,500 MW Yangfanggou. Moreover, the Union Ministry of Power announced plans to generate more than 18 gigatonnes (GW) of electricity by 2032 in order to stabilize systems and fulfill peak power demand. Furthermore, in India, there are currently, 8 projects in operation, around 4 projects are under construction, and nearly 24 projects have been allocated by states at various stages of development.
Further, the market in Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the rising initiative to boost the capacity of hydro storage. For instance, Germany has announced plans to build a new pumped hydro storage plant in the eastern part of the country. Moreover, France has announced plans to develop new pumped hydro storage projects in the Pyrenees Mountains. In addition to this, the European Union has set a goal of increasing its energy storage capacity to at least 10% of its total electricity consumption by 2030.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Payel Roy, Dhruv Bhatia
Ans: Increasing demand for electricity, rising capacity of hydro storage, and the need to minimize carbon emission are the major factors driving the market growth.
Ans: The market size of pumped hydro storage is anticipated to attain a CAGR of ~10% over the forecast period, i.e., 2023 – 2035.
Ans: Lack of a site for installing the plant, and the high cost of setting up an infrastructure are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are GE Renewable Energy, Siemens Energy, Enel SpA, Duke Energy Corporation, and Voith GmbH & Co. KGaA, Genex Power Limited, Toshiba Energy System & Solutions Corporation, Greenko Energy, Eskom Holdings SOC Ltd., and Nevada Hydro Corporation
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by type, source, end user, and by region.
Ans: The electricity utilities segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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