Recent trends in the cost of pumped hydro storage (PHS) reflect a dynamic market characterized by strong growth in investment and technology development, although specific per-unit cost figures are less frequently detailed in available market analyses.
Market Growth Indicating Cost Dynamics
- The global market for pumped hydro storage is growing rapidly, with estimates placing the market size at approximately USD 398 billion in 2025, projected to reach around USD 635 billion by 2032 at a CAGR of 6.9%. Other reports suggest even higher growth rates, estimating the market size escalating from about USD 408 billion in 2024 to over USD 442 billion in 2025 at an 8.3% CAGR, and further to around USD 642 billion by 2029 at a CAGR of 9.8%.
- A longer-term outlook sees the market potentially reaching USD 1.43 trillion by 2037, growing at a CAGR exceeding 10.3% from 2025 to 2037, driven by large-scale initiatives such as China’s ambitious plans to increase pumped storage capacity to at least 62 GW by 2025 and beyond 120 GW by 2030.
Cost Trends and Influences
- While direct cost figures per megawatt or per project are not explicitly stated in these reports, the rapid market growth suggests a mix of factors impacting costs:
- Increased demand for grid stability and renewable integration is driving more deployments.
- Technological advances, including innovative geo-mechanical pumped-storage systems, could alter cost structures by reducing reliance on traditional site-dependent infrastructure.
- Government incentives, but also recent increased tariffs and the phase-out of some tax credits, may influence the cost base and project economics in the near term.
- The COVID-19 pandemic caused temporary disruptions but does not appear to have long-term negative impacts on cost trajectories or market expansion.
Summary
Overall, recent trends show a strong upward trajectory in investment and capacity for pumped hydro storage, with technological innovation and supportive policies as key drivers. These trends imply that while upfront capital costs for pumped hydro storage remain substantial due to the complexity and scale of projects, improvements in technology, policy frameworks, and market demand may stabilize or reduce levelized costs over time. The acceleration in market size and project development notably in countries like China points to growing cost efficiency and economies of scale in the pumped hydro storage sector.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/are-there-any-recent-trends-in-the-cost-of-pumped-hydro-storage/
