Efficiency Range and Energy Losses
Pumped hydro storage typically has a round-trip energy efficiency between 70% and 80%, meaning 70-80% of the electrical energy used to pump water uphill can be recovered when the water is released to generate power. Some sources note slightly higher efficiencies, exceeding 80%. Despite not being 100% efficient, PHES remains one of the most efficient large-scale energy storage technologies available.
The energy loss in the pumping process means PHES plants consume more energy than they produce overall. However, they buy electricity at low-cost, off-peak times to pump water uphill and generate electricity during peak demand when prices are higher, creating economic value despite the inherent losses.
Impact on Revenue and Grid Services
The partial inefficiency is offset by the ability to shift energy availability from low-demand, cheap periods to high-demand, expensive periods—maximizing revenue. This arbitrage capability allows pumped hydro plants to sell more electricity at peak prices, enhancing cost-effectiveness even though net energy output is less than input energy.
Moreover, PHES provides long-duration storage typically around 10 hours, which is longer than many battery technologies. This extended discharge duration supports grid reliability and complements intermittent renewables like wind and solar by supplying power during low generation periods.
Economic Benefits Compared to Other Storage
Pumped hydro’s relatively high efficiency and long discharge times translate into economic advantages over other storage technologies with lower efficiencies, such as hydrogen storage (40–60%) or compressed air energy storage (60–65%). It is also generally less expensive than lithium-ion battery systems for large-scale, long-duration storage.
A 2021 Imperial College London report highlighted that new pumped hydro projects could save the UK energy system between £44 million and £690 million annually by 2050, attributing savings to PHES’s cost-effectiveness and operational flexibility.
Summary
| Aspect | Impact on Cost-Effectiveness |
|---|---|
| Round-trip efficiency (70-80%+) | Limits energy losses, making pumped hydro more efficient than many alternatives, reducing wasted input energy. |
| Energy arbitrage | Buying cheap off-peak energy for pumping and selling at peak prices increases revenue and offsets energy losses. |
| Long-duration storage | Provides about 10 hours of power, enabling better grid balancing and reducing need for fossil fuel peaker plants. |
| Economic savings | High efficiency and reliability translate into significant system cost savings, making pumped hydro one of the most cost-effective storage options. |
In conclusion, the relatively high efficiency of pumped hydroelectric energy storage plays a crucial role in its cost-effectiveness by minimizing energy losses and enabling profitable energy shifting. This efficiency, combined with its ability to provide long-duration, reliable storage, makes pumped hydro a leading technology for economically balancing modern power grids.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-efficiency-of-pumped-hydroelectric-energy-storage-impact-its-overall-cost-effectiveness/
